Commissioner of Income Tax vs Asian Techs Ltd.

Arijit Pasayat, C.J.—All these applications involve an identical question relating to legality of the direction given for working out the entitlement of the assessee to get deduction u/s 80HH, 80-I and 80J of the Income Tax Act, 1961. The assessee was engaged in a business of engineering contracts. Vide order dated June 4, 1993, the Tribunal directed the Assessing Officer to work out the entitlements, if any, of the assessee by finding which part of the income is relatable to manufacturing activities. Learned counsel for the Revenue with reference to the decision of the apex court in Commissioner of Income Tax, Orissa and Others Vs. N.C. Budharaja and Company and Others, , submitted that the direction given is contrary to the law as settled by the apex court.

Learned counsel for the assessee submitted that the question as to benefit of Section 80HH on value of articles manufactured or produced by him which have gone into in the construction of the dam was left open. On a reading of the decision of the apex court, it is clear that the activities carried on by the assessee appear to be the same as that of the party in the case before the apex court. Where the articles manufactured go into the construction of the dam, it was observed that such situation makes little difference to the principles in the case. There is no scope for finding out whether the part of the activity generated an income for the purpose of Section 80HH, The business activities were conducted as a whole and it is almost impossible as accepted by learned counsel for the assessee to decipher one of the activities for the purpose of finding out whether any profit is relatable thereto.

In that view of the matter, we are of the opinion that the decision of the apex court in Commissioner of Income Tax, Orissa and Others Vs. N.C. Budharaja and Company and Others, , is clearly applicable to the facts of the case and direction as given by the Tribunal is contrary to the principles laid down by the apex court. We accordingly, answer the question in favour of the Revenue and against the assessee. Our answer shall govern the second limb of the question and it will be, therefore, of academic interest to consider the first limb of the question.

The I.T. Rs. are disposed of as above.