Commissioner of Income Tax, Trivandrum Vs. Kala Cartoons Pvt. Ltd.
EmailAppeal: Civil Appeal Nos. 3967-3971 of 1999
With C.A. Nos. 3972-73/99 & C.A. Nos. 4500-4501/2001 @ S.L.P. (C) Nos. 18397-98/99
With C.A. Nos. 3972-73/99 & C.A. Nos. 4500-4501/2001 @ S.L.P. (C) Nos. 18397-98/99
Petitioner: Commissioner of Income Tax, Trivandrum
Respondent: Kala Cartoons Pvt. Ltd.
Apeal: Civil Appeal Nos. 3967-3971 of 1999
With C.A. Nos. 3972-73/99 & C.A. Nos. 4500-4501/2001 @ S.L.P. (C) Nos. 18397-98/99
With C.A. Nos. 3972-73/99 & C.A. Nos. 4500-4501/2001 @ S.L.P. (C) Nos. 18397-98/99
Judges: Y.K. SABJARWAL & BRIJESH KUMAR, JJ.
Date of Judgment: Jul 24, 2001
Head Note:
INCOME TAX
Income Tax Act, 1961
Section 80HH – Allowances – Assessee purchasing, peeling, freezing and exporting shrimps – No other material placed – If the assessee is an industrial undertaking, involved in production/manufacture and entitled to allowances. Held that assessee is not entitled to such allowance. Relish Food’s case (237 ITR 59) distinguished. (Paras 4, 5)
Cases Reffered:
1. Commissioner of Income Tax v. Relish Foods (JT 1999 (2) SC 130) (Para 5)
2. C.I.T. v. Relish Foods (180 ITR 454) (Para 3)
3. C.I.T. v. Marwell Sea Foods (166 ITR 624) (Para 3)
2. C.I.T. v. Relish Foods (180 ITR 454) (Para 3)
3. C.I.T. v. Marwell Sea Foods (166 ITR 624) (Para 3)
JUDGEMENT:
ORDER
In C.A. Nos. 3967-71/99:
1. At the instance of the revenue, the following questions relating to the assessment years 1980-81 to 1984-85 were referred for the opinion of the High Court under section 256(2) of the Income Tax Act:
“1) Whether, on the facts and in the circumstances of the case, the tribunal is right in law and fact in holding that the assessee is an industrial company eligible to be taxed only at the rate of 55%?
1(a) Whether processing of marine products for export would make the assessee as industrial company?
2) Whether, on the facts and in the circumstances of the case, the tribunal is right in law and fact in holding that it cannot be said that the issue involved herein is a debatable issue and on that basis there was no mistake on the face of the record and are the findings not wrong, unreasonable and illogical?”
2. The High Court by the judgment and order under appeal answered questions no. 1 and 1(a) in the affirmative, that is, in favour of the assessee and against the revenue. The second question was returned unanswered.
3. In these appeals, we are not concerned with the second question and in relation thereto learned counsel for the revenue did not make any submission. The tribunal, while answering the aforesaid questions in favour of the assessee, has relied upon the decisions of the Kerala High Court in C.I.T. v. Marwell Sea Foods (166 ITR 624), and C.I.T. v. Relish Foods (180 ITR 454).
4. The case of the assessee for claiming allowance under section 80-HH is that it is an industrial undertaking that manufactures/produces articles. The tribunal has held that the activities of the assessee involve purchasing, peeling, freezing and export of shrimps. The said activities were held to be amounting to production. Apart from the above activities, there is no description of what the assessee does to the shrimps after buying except peeling and freezing and thereafter exporting.
5. The decision of the High Court in the case of Relish Foods (supra) has been set aside by this Court in the case of Commissioner of Income Tax v. Relish Foods (JT 1999 (2) SC 130). In respect of Marwell Sea Foods (supra), it was noticed by this Court that the assessee therein had placed before the taxing authorities, a detailed description of the process by which prawns were prepared for export and the appellate authorities had understood the various stages through which the prawns passed as processes involving production or manufacture. Here nothing of the kind was placed by the assessee before the taxing authorities. The present case is squarely covered by the decision in the case of Relish Foods.
6. For the aforesaid reasons, we answer the aforesaid questions in the negative, that is, in favour of the revenue and against the assessee.
7. The appeals are allowed accordingly, leaving the parties to bear their own costs.
C.A. No. 3972-73/99 & S.L.P. (C) Nos. 18397-98/99:
8. Leave granted in S.L.P. (C) Nos. 18397-98/99.
9. In view of the order just made in C.A. nos. 3967-71/99, these appeals are allowed, leaving the parties to bear their own costs.
In C.A. Nos. 3967-71/99:
1. At the instance of the revenue, the following questions relating to the assessment years 1980-81 to 1984-85 were referred for the opinion of the High Court under section 256(2) of the Income Tax Act:
“1) Whether, on the facts and in the circumstances of the case, the tribunal is right in law and fact in holding that the assessee is an industrial company eligible to be taxed only at the rate of 55%?
1(a) Whether processing of marine products for export would make the assessee as industrial company?
2) Whether, on the facts and in the circumstances of the case, the tribunal is right in law and fact in holding that it cannot be said that the issue involved herein is a debatable issue and on that basis there was no mistake on the face of the record and are the findings not wrong, unreasonable and illogical?”
2. The High Court by the judgment and order under appeal answered questions no. 1 and 1(a) in the affirmative, that is, in favour of the assessee and against the revenue. The second question was returned unanswered.
3. In these appeals, we are not concerned with the second question and in relation thereto learned counsel for the revenue did not make any submission. The tribunal, while answering the aforesaid questions in favour of the assessee, has relied upon the decisions of the Kerala High Court in C.I.T. v. Marwell Sea Foods (166 ITR 624), and C.I.T. v. Relish Foods (180 ITR 454).
4. The case of the assessee for claiming allowance under section 80-HH is that it is an industrial undertaking that manufactures/produces articles. The tribunal has held that the activities of the assessee involve purchasing, peeling, freezing and export of shrimps. The said activities were held to be amounting to production. Apart from the above activities, there is no description of what the assessee does to the shrimps after buying except peeling and freezing and thereafter exporting.
5. The decision of the High Court in the case of Relish Foods (supra) has been set aside by this Court in the case of Commissioner of Income Tax v. Relish Foods (JT 1999 (2) SC 130). In respect of Marwell Sea Foods (supra), it was noticed by this Court that the assessee therein had placed before the taxing authorities, a detailed description of the process by which prawns were prepared for export and the appellate authorities had understood the various stages through which the prawns passed as processes involving production or manufacture. Here nothing of the kind was placed by the assessee before the taxing authorities. The present case is squarely covered by the decision in the case of Relish Foods.
6. For the aforesaid reasons, we answer the aforesaid questions in the negative, that is, in favour of the revenue and against the assessee.
7. The appeals are allowed accordingly, leaving the parties to bear their own costs.
C.A. No. 3972-73/99 & S.L.P. (C) Nos. 18397-98/99:
8. Leave granted in S.L.P. (C) Nos. 18397-98/99.
9. In view of the order just made in C.A. nos. 3967-71/99, these appeals are allowed, leaving the parties to bear their own costs.
