COMMISSIONER OF INCOME TAX Vs. MEWARA CONSTRUCTIONS

JUDGEMENT

(1.) The applicant (CIT, Bhopal) has filed this application under s. 256(2) of the IT Act, 1961 (for short the Act) seeking direction to the Tribunal to state the case and refer the proposed question, as extracted below, after rejection of the application on 30th Dec., 1991 registered as RA No. 388/Ind/1991 for asst. yr. 1987-88 arising out of the order dt. 22nd July, 1991 passed by the Tribunal in ITA No. 1128/Ind/1990, for our consideration and opinion :

(2.) Facts lie in a narrow compass. The assessee firm is a civil contractor. For the asst. yr. 1987-88, it claimed investment allowance of Rs. 1,62,163 under s. 32A of the Act on the machinery costing Rs. 6,48,651. This claim of allowance was rejected by the AO. The assessee then filed the appeal before CIT(A). The appeal was allowed and the claim was accepted. The applicant/Department then filed the appeal before the Tribunal. The assessee supported the order before the Tribunal on the contentions that the construction of road involved mechanical process beginning from extraction of boulders and ending with rolling process by road rollers. The Tribunal upheld the contentions and order. It was held that the activity of the assessee was not construction of road simpliciter but involved manufacturing process also. The order thus went against the applicant. The applicant then filed the application, as noted above. That application was rejected on 30th Dec., 1991. This application under s. 256(2) of the Act is filed thereafter.

(3.) We have heard Shri D. D. Vyas, learned counsel for the applicant/Department and Shri A. S. Garg, learned counsel for the non-applicant/assessee.