COMMISSIONER OF INCOME TAX Vs. DEEJAY HATCHERIES

JUDGEMENT

(1.) THE following two questions of law have been referred by the Tribunal for opinion of this Court under s. 256(1) of the IT Act, 1961, at the instance of the Revenue : '1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the assessee is entitled to deduction under s. 80J as an industrial undertaking ?

(2.) WHETHER , on the facts and in the circumstances of the case, the Tribunal was right in holding that the certificate given by the auditors under r. 18C in the course of assessment proceedings could be considered for the purpose of allowing deduction under s. 80J ?' 2. The assessee is a registered firm. It runs a modern poultry farm. The assessee collects eggs which are initially subjected to various processes like fumigation, cooling and incubation. These eggs are hatched by a mechanical process keeping the humidity and temperature constant as required. The chicks which are hatched out are given special food so that they turn out to be layers. Considerable amount of mechanical process is applied by the assessee in conducting poultry farm.'Hatcheries' as this business is called, is a capital intensive business and considerable labour is involved. It also requires extensive use of plant and machinery like air -conditioning, etc. Scientific methods and research also play as important role in this business. The assessee is registered as a small scale industry.

(3.) THE learned counsel for the Revenue submits that the Tribunal was wrong in holding that the assessee being engaged in the business of running a poultry farm was an industrial undertaking engaged in the production of articles or things. Business of poultry farm, according to the learned counsel, cannot be held to be an industrial undertaking engaged in the manufacture or production of goods and articles. Reference is made in this connection to cl. (27) of s. 10 of the Act, as it stood till its deletion in the year 1980 (sic 1976) and s. 80JJ which was inserted in its place in the year 1980 (sic 1976) for giving incentive to persons engaged in the business of poultry farming.