COMMISSIONER OF INCOME TAX Vs. MADGUL UDYOG

JUDGEMENT

(1.) In this reference made at the instance of the Revenue, the following common question of law has been referred by the Tribunal under Section 256(1) of the Income-tax Act, 1961, to this court for its opinion for the assessment years 1975-76 and 1978-79 to 1980-81:

(2.) Shortly stated, the facts are that the assessee is a partnership firm. At all material times during the relevant previous years corresponding to the assessment years under reference, the assessee-firm was engaged in the business of constructing multi-storeyed buildings for sale of apartments contained therein. The assessee-firm claimed deduction in respect of profits and gains derived from its aforesaid activity under Section 80J of the Income-tax Act, 1961. The assessee's claim for deduction under Section 80J was negatived by the Assessing Officer on the ground that the construction of multi-storeyed buildings could not amount to manufacture or production of any "article".

(3.) But the Commissioner of Income-tax (Appeals) for the assessment years 1978-79 to 1980-81 and the Appellate Assistant Commissioner of Income-tax for the assessment year 1975-76 allowed the said deduction treating the assessee as an industrial undertaking manufacturing or producing an "article" being the multi-storeyed building to qualify for the deduction.