VIKAS PRINTERY Vs. ASSISTANT COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS petition under Article 226 of the Constitution challenges the notices dt. 28th Jan., 1991 (Exh. 'C' Colly.) issued under Section 148 r/w Section 147 of the IT Act, 1961 (hereinafter referred to as 'the Act'), for asst. yrs. 1982 -83 to 1986 -87 by the Asstt. CIT (Inv.) Circle 5(1), Ahmedabad, i.e., respondent No. 1.

(2.) THE facts, as averred in the petition, are as under : The assessment years involved are 1982 -83 to 1986 -87 and the corresponding accounting years are Samvat years 2037 to 2041. The petitioner purchased certain printing machines valued at Rs. 10,43,928 during Samvat year 2037 and claimed investment allowance at the rate of 25 per cent under Section 32A of the Act. The said investment allowance of Rs. 2,60,982 was carried forward as unabsorbed investment allowance in light of the total income being computed at a loss of Rs. 13,870. Similarly, for the previous year, corresponding to asst. yr. 1983 -84, on the printing machinery costing Rs. 11,461, investment allowance to the tune of Rs. 2,865 was claimed. For asst. yr. 1984 -85, the cost of the new machinery was Rs. 4,92,652 and the investment allowance claimed was Rs. 1,23,163. For asst. yr. 1985 -86 the claim in relation to unabsorbed investment allowance was Rs. 1,23,163 which was brought forward from the preceding assessment year, i.e., asst. yr. 1984 -85. Again for asst. yr. 1986 -87, the petitioner purchased machineries worth Rs. 14,59,288 and claimed investment allowance at Rs. 3,64,822. It is an admitted position that the business of the petitioner is carrying out printing work on job work basis. The petitioner receives supply of paper, composes scripts and photographic films of the matter to be printed, and such printing work is carried out on printing machines which are rotary offset machines using consumable stores purchased by the petitioner like printing ink, aluminium graphic plates, rubber blankets, etc. The income received from the publishers for the job work is admittedly assessed as income from business in the hands of the petitioner. For asst. yrs. 1982 -83, 1983 -84, 1984 -85 and 1985 -86, the petitioner has been assessed under Section 143(3) of the Act, while for asst. yr. 1986 -87 the assessment has been framed under Section 143(1) of the Act.

(3.) MR . M.R. Bhatt, the learned senior standing counsel appearing on behalf of the respondents, submitted that the petitioner was merely carrying on job work and hence, could not be said to have fulfilled the requirements of the provisions of Section 32A of the Act which require that an assessee should be engaged in manufacturing or production of an article as stipulated in Section 32A(2)(iii) of the Act. It was, therefore, urged that the petitioner was merely processing pre -composed printing material and in return the petitioner received labour charges only which did not entitle the petitioner to claim investment allowance under Section 32A of the Act. According to Mr. Bhatt, in the circumstances the assessments having been reopened after obtaining approval from the CIT, the petitioner did not deserve to be granted any relief at this stage and the AO may be permitted to proceed in accordance with law. That the petitioner could have availed of alternative remedy in case of any adverse order.