COCHIN COMPANY Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) IN these two references made under Section 256(1) of the INcome-tax Act, 1961 (hereinafter referred to as "the Act"), the INcome-tax Appellate Tribunal, Cochin Bench, has referred to this court for decision the following three questions of law arising out of the consolidated order passed by the Tribunal in two connected appeals relating to the assessment made against a company for the year 1966-67, one of the appeals having been filed by the assessee and the other by the department :

(2.) THE assessee is a private company carrying on the business of processing and export of fish. In December, 1963, the assessee purchased a fishing trawler from its previous owner who was not a resident of India. For the assessment year 1966-67, the assessee claimed a development rebate of Rs. 48,692 in respect of the said trawler. THE Income-tax Officer allowed the assessee's claim for rebate only to the extent of Rs. 15,387 and disallowed the balance claim of Rs. 33,305 on the ground that the assessee had failed to create the requisite reserve during the previous year.

(3.) THE assessee took up the matter in appeal before the Appellate Assistant Commissioner of Income-tax, Ernakulam. THE Appellate Assistant Commissioner upheld the contentions of the assessee in so far as it related to the claim for development rebate in respect of the trawler. Hence, in reversal of the finding of the Income-tax Officer disallowing the assessee's claim for development rebate to the extent of Rs. 33,305, the Appellate Assistant Commissioner allowed the assessee's claim in full. On the other two points relating to the claims put forward by the assessee for rebate of tax under Section 2(5)(a)(i) of the Finance Act, 1966, and for computation of the tax at the rate of 55 per cent. under item I(A)(2) of Paragraph F of Schedule I of the Finance Act, 1966, treating the assessee as an "industrial company", the Appellate Assistant Commissioner upheld the correctness of the conclusion reached by the Income-tax Officer that the assessee was not entitled to either of the aforesaid benefits. Both the assessee as well as the department filed appeals before the Income-tax Appellate Tribunal against the aforesaid decision of the Appellate Assistant Commissioner. In I.T.A. No. 556/Coch/70-71, which was the appeal filed by the assessee-company, the findings of the Appellate Assistant Commissioner disallowing the assessee's claim for rebate of tax under Section 2(5)(a)(i) of the Finance Act, 1966, and for the application of the concessional rate of tax under item I(A)(2) of Paragraph F of Schedule I of the Finance Act, 1966, were questioned by the assessee. THE appeal filed by the department--I.T.A. No. 611/Coch/70-71--related to that part of the order of the Appellate Assistant Commissioner whereby the assessee's claim for development rebate in respect of the trawler was allowed in full.