COMMISSIONER OF INCOME-TAX V. GORDHANBHAI JETHABHAI TOBACCO INDUSTRIES PVT LTD

ITR/185/1988

AI Insights

The case involves the Commissioner of Income-Tax contesting against Gordhanbhai Jethabhai Tobacco Industries Pvt Ltd regarding the classification of the company as an industrial entity and the eligibility for relief under Section 80J of the Income Tax Act for the assessment year 1981-82. The primary legal questions were whether the company's activities constituted manufacturing and processing, and whether it met the criteria for relief under Section 80J. The Tribunal had previously ruled in favor of the assessee, which the High Court upheld, referencing a similar case involving Ashwinkumar Gordhanbhai & Bros. Pvt. Ltd.

• Counselvise Citation: [2002] 140 COUNSELVISE.COM (IT) 742054 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 26-06-2002
• Assessment Year: misc
• Other Referred Cases: Commissioner of Income-tax vs. Ashwinkumar Gordhanbhai & Bros. Pvt. Ltd., (1995) 212 ITR 614
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Assessee Lawyers: B B NAIK
• Keywords: Industrial company; Manufacturing and Processing; Relief under Section 80J
• Section: 80J

Judgement Text

" IN THE HIGH COURT OF GUJARAT AT AHMEDABAD INCOME TAX REFERENCE No 185 of 1988 For Approval and Signature: Hon'ble MR.JUSTICE M.S.SHAH and Hon'ble MR.JUSTICE K.A.PUJ ============================================================ 1. Whether Reporters of Local Papers may be allowed : NO to see the judgements? 2. To be referred to the Reporter or not? : NO 3. Whether Their Lordships wish to see the fair copy : NO of the judgement? 4. Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder? 5. Whether it is to be circulated to the Civil Judge? : NO -------------------------------------------------------------- COMMISSIONER OF INCOME-TAX Versus GORDHANBHAI JETHABHAI TOBACCO INDUSTRIES PVT LTD -------------------------------------------------------------- Appearance: 1. INCOME TAX REFERENCE No. 185 of 1988 MR BB NAIK, for Petitioner No. 1 NOTICE SERVED for Respondent No. 1 -------------------------------------------------------------- CORAM : MR.JUSTICE M.S.SHAH and MR.JUSTICE K.A.PUJ Date of decision: 26/06/2002 ORAL JUDGEMENT (Per : MR.JUSTICE M.S.SHAH) In this reference at the instance of the revenue, the following questions are referred for our opinion for the relevant assessment years as mentioned at the outset:- A.Ys. 1981-82, 1982-83 & 1983-84 (1) Whether, on the facts and in the circumstances of the case and in law, the Tribunal was right in coming to the conclusion that the assessee company was engaged in manufacturing and processing activities and was, therefore, an Industrial Company ? A.Y. 1981-82 (2) Whether, on the facts and in the circumstances of the case and in law, the Tribunal was right in coming to the conclusion that the assessee company was entitled to relief u/s. 80J ? 2. We have heard Mr BB Naik, learned counsel for the revenue. Though served, none appears for the respondent-assessee. 3. As far as the first question is concerned, there is no dispute about the fact that the assessee's business consists of crushing large tobacco leaves and cutting into smaller pieces, sieving them i.e. after removing the dust and unwanted stems from the tobacco leaves, selling them to the bidi manufacturers. In connection with another assessee carrying on the same business (Ashwinkumar Gordhanbhai & Bros. Pvt. Ltd.), this Court decided in Commissioner of Income-tax vs. Ashwinkumar Gordhanbhai & Bros. Pvt. Ltd., (1995) 212 ITR 614) that the aforesaid business involves manufacturing or processing of goods and the assessee is, therefore, an Industrial Company. Following the aforesaid decision, our answer to the first question is in the affirmative i.e. in favour of the assessee and against the revenue. 4. Coming to the second question, the Tribunal confirmed the order of the Commissioner (Appeals) who had based his decision in favour of the assessee for granting the relief under Section 80J for the assessment year 1981-82 on the basis of his decision i.e. appellate order for the assessment year 1980-81. The Tribunal found that there was no distinguishing feature and, therefore, the view of the Commissioner for the assessment year 1981-82 was also required to be confirmed. Apart from the aforesaid aspect, it appears to us that the question sought to be raised before us in respect of the relief under Section 80J merely involves an amount of Rs.16,054/- and the question whether the assessee is or is not employing more than 20 workers in his processing unit as envisaged under Section 80J(4)(iv) involves a disputed question of fact on which the Commissioner (Appeals) and the Tribunal have given concurrent finding in favour of the assessee. In view of the above discussion, our answer to the second question is also in the affirmative i.e. in favour of the assessee and against the revenue. 5. The reference accordingly stands disposed of with no order as to costs. (M.S. Shah, J.) (K.A. Puj, J.) sundar/- "