APPEEJAY PVT LTD Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) On an application under Section 256(1) of the Income-tax Act, 1961 (hereinafter referred to "said Act"), the Tribunal has referred to this court the following question of law :

(2.) The facts, inter alia, are that the assessee is a limited company deriving income from business and other sources. The assessment year involved is 1980-81. The nature of the business carried on by the assessee which is relevant for the purpose of this reference was to buy different types of tea from the market, blend them in different proportions and sell the tea so blended in the market. The case of the assessee before the Income-tax Officer was that it was engaged in the manufacture or production of articles within the meaning of Section 80](4)(iii) and so it was entitled to the relief envisaged in Section 80] of the Act. The Income-tax Officer declined to grant this relief on the ground that the assessee was not an industrial undertaking manufacturing or producing any article as it was engaged only in the blending of different types of tea and selling the tea so blended. He also mentioned that it was not possible to determine the computation period as envisaged under Explanation 2 to Section 80J(1A)(II). Hence, he did not give any relief under Section 80J of the Act to the assessee and made the assessment accordingly after getting the approval of the Inspecting Assistant Commissioner under Section 144B of the Act on a total income of Rs. 5,46,240 on March 31, 1984.

(3.) The assessee appealed to the Commissioner of Income-tax (Appeals) and contended that the assessee's claim for relief under Section 80J of the Act should have been allowed. The Commissioner of Income-tax (Appeals) agreed with the contention of the assessee and held that the assessee-company was an industrial undertaking engaged in the manufacture or production of articles so that it is entitled to relief under Section 80J of the Act. He directed the Income-tax Officer to look into the assessce's computation and allow the admissible relief in respect of the tea blending and packing unit in accordance with the provisions of Section 80J of the Act.