VEENEER MILLS Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) IN respect of there assessment 1981-82, 1982-83 and 1983-84, the following question has been referred under section 256(1) of the INcome-tax Act, 1961 :

(2.) THE finding is that the assessee is a manufacture of plywood. To transport the timber which is the raw material in the manufacture of plywood, the assessee used its own lorries. THE dominant purpose of these lorries was the transportation of the material belonging to the assessee in connection with its manufacturing activity. However, on a few occasions, when the lorries were idle, they were given on hire. It is also the finding that the income earned by the assessee by hiring by hiring out the lorry is a negligible part of the assessee's income.

(3.) IN view of the specific finding that the lorries were regularly employed for the business of the assessee of manufacturing plywood and the lorries were hired out only on a few limited occasions, the Revenue is justified in rejecting the claim of the assessee under the above provision of item III-E (1A) of Part I of Appendix I.