Commissioner of Income Tax vs Mahalaxmi Ice and Cold Storage

V.N. Khare, J.—At the instance of the department, following questions have been referred to this Court for opinion u/s 256(1) of income tax Act, 1961:

Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in upholding assessee''s claim u/s 80J in respect of its cold storage business ?

Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the addition by the assessee of two new chambers to the already existing cold storage constituted establishment of a new industrial undertaking within the meaning of section 80J of income tax Act, 1961 ?

The assessee is a firm and owns a cold storage in the district of Mainpuri. The assessee constructed two new chambers to the already existing cold storage and claimed deduction u/s 80J of the Act in respect of the profit and gains for the assessment year 1973-74. This claim of the assessee was declined by the ITO. However, on appeal, the AAC held that the assessee was entitled to the claim of deduction u/s 80J and thus allowed the assessee''s appeal. The appellate order was affirmed by the Tribunal. The Tribunal while dismissing the appeal filed by the department relied upon the decision of this Court in the case of CIT v. Farrukhabad Cold Storage (P.) Ltd. 1976 UP Tax Cases 646 for the purposes of holding that the cold storage is an industrial undertaking. Section 80J permits an assessee deduction in respect of profits and gains from the newly established undertaking.

The learned counsel appearing for the department argued that the cold storage does not come within the expression ''industrial undertaking'' and as such the assessee was not entitled to the benefit of section 80J the learned counsel in support of his arguments relied upon a decision of the Supreme Court in the case of Delhi Cold Storage (P.) Ltd. v. CIT 1991 U.P. Tax Cas 1104. In this case, the Supreme Court while interpreting section 2(7) clause (e) of Finance Act, 1973 held that the Cold Storage cannot be held to be engaged in the processing of goods and as such is not an industrial undertaking. It is relevant to notice in this case that the Supreme Court impliedly over rules the decision of this Court in the case of Farrukhabad Cold Storage (P.) Ltd. (supra) which was relied upon by the Tribunal while dismissing the appeal of the department. In view of this decision that the cold storage is not an industrial undertaking we answer the question referred to us in the negative and against the assessee. Let this opinion be transmitted to the Tribunal forthwith. Since none has appeared for the assessee there shall be no order as to costs.