COMMISSIONER OF INCOME TAX Vs. SUDESH KUMARI SONI

JUDGEMENT

(1.) At the instance of the Revenue, the following three questions have been referred by the Tribunal under section 256(1) of the Income-tax Act, 1961 :

(2.) The admitted facts are that the assessee is engaged in the business of hatchery employing modern methods. For the previous year ended 31/03/1978, corresponding to the assessment year 1978-79, the assessee claimed deduction under section 80J as having established a new industrial undertaking in respect of the business of hatchery. The Income-tax Officer was of the view that this business cannot be considered to be an industrial undertaking and the assessee was not entitled to such a deduction. However, he considered that the assessee was entitled to the specific relief under section 80JJ which is a deduction in respect of the business of poultry farming. The assessee appealed and pointed out that in similar cases the Appellate Tribunal had granted deduction under section 80J. However, the Appellate Commissioner confirmed the order. On further appeal, the Appellate Tribunal followed the decision in the case of Sri Venkateswara Hatcheries decided by the Tribunal and granted deduction under section 80J. On these facts the questions mentioned above have been referred.

(3.) Learned counsel for the Revenue fairly pointed out that the decision of the Tribunal in the case of Sri Venkateswara Hatcheries came up to this court on reference and it was affirmed by the decision in CIT v. Sri Venkateswara Hatcheries P. Ltd. [1988] 174 ITR 231 (AP). He also stated that the said decision has become final as no appeal was taken to the Supreme Court. However, he pointed out that in a subsequent decision, the Bombay High Court held in CIT v. Deejay Hatcheries [1995] 211 ITR 652, that the expression "production of article" cannot encompass a poultry farm where chicks are grown and further that there being a special provision under section 80JJ for granting the relief in respect of poultry farming the deduction under section 80J was inadmissible. Learned counsel for the Revenue also referred to a decision of the Supreme Court in CIT v. N. C. Budharaja and Co. [1993] 204 ITR 412 and contended that the words "production of article" in section 80J would refer only to manufacture or creation of inanimate objects of matter but not to the growing of animate objects. He, therefore, pleaded for reconsideration of the decision.