COMMISSIONER OF INCOME TAX Vs. MERCANTILE CONSTRUCTION CO

JUDGEMENT

(1.) IN this reference under s. 256(1) of the IT Act, 1961 ('the Act'), the following questions of law have been referred to this Court for the asst. yr. 1981-82 :

(2.) THE facts leading to this reference are that the assessee is a partnership firm assessed in the status or registered firm under the provision of the Act. The business of the assessee, inter alia, was raising of coal in Bardjna Colliery and Marulidih Colliery belonging to Eastern Coal-fields Ltd. At the said collieries open cast mining of coal was undertaken. The assessee, employed new machinery like Bulldozers, Compressors, Drills, Dumpers, Scrappers, Shovels and other heavy earthmoving machinery for the said mining job. The agent of the said collieries also gave a certificate to the effect that the assessee was engaged in the mining job. The work of the assessee consisted, inter alia, of cutting earth, drilling and blasting stones, removing the overheads, removing the coal and transporting such coal and dumping it at the coal yard. The entire work was undertaken by the assessee itself with its own machinery and workmen. The assessee was paid for the various jobs at the rates stipulated in the contract. All the machinery for the job was operated by the assessee. None of the said machinery was made over by the assessee to the collieries. The assessee employed own staff and labourers for working the said machinery and raising the coal.

(3.) THE ITO was directed to allow investment allowance.