COMMISSIONER OF INCOME TAX Vs. GUJARAT GUARDIAN LIMITED

JUDGEMENT

(1.) THIS is an Appeal under Section 260A of the Income Tax Act, 1961 (hereinafter referred to in short as the 'Act') against the judgment dated 05.10.2007 passed by the Income Tax Appellate Tribunal (hereinafter referred to in short as the 'Tribunal') in ITA No. 3224/Del/2005 in respect of the assessment year 1996-97. Before the Tribunal the Revenue as well as the assessee, filed an appeal against the order of the Commissioner of Income Tax (Appeals) dated 26.04.2005 [hereinafter referred to in short as the 'CIT(A)'].

(2.) THE Revenue being aggrieved has preferred the present appeal and proposed the following questions of law for consideration of this Court:

(3.) ON 05.06.1990 a collaboration agreement was executed between Guardian International Corporation, USA, (in short 'GIC') Modi Rubber (I) Limited, and Gujarat Alkalies and Chemicals Ltd. Consequent thereto, the assessee was incorporated as a joint venture between GIC, Modi Rubber (I) Limited, M/s Gujarat Mineral Development Corpn. Ltd and Gujarat Alkalies and Chemicals Ltd. GIC with 50% stake in the equity of the assessee was the major shareholder. The State Government through Public Sector Undertakings jointly held a stake equivalent to 9.46% of the total equity of the assessee. It is not disputed that both the purpose and object of entering into the aforementioned collaboration agreement and thereafter incorporation of the assessee, was to manufacture float glass in India.