COMMISSIONER OF INCOME TAX Vs. SHIVALIK POULTRIES

JUDGEMENT

(1.) THIS is a reference under s. 256(1) of the IT Act, 1961 (for short "the Act"), at the instance of the Revenue, relating to the asst. yr. 1988 -89 wherein the Income -tax Appellate Tribunal, Chandigarh Bench, Chandigarh (for short "the Tribunal"), has referred the following questions of law for the opinion of this Court :

(2.) THE assessee, a registered firm, has installed a poultry -farm in village Mauli, District Ambala. The assessee filed a return of income for the asst. yr. 1988 -89 declaring nil income. The assessee claimed deductions under ss. 80HH, 80 -I and 32AB of the Act which were disallowed by the AO by holding that poultry -farming was not an industrial undertaking. The assessee carried an appeal before the CIT(A), which was allowed. The Revenue brought the matter before the Tribunal. While the Revenue placed reliance on CIT vs. Deejay Hatcheries (1996) 130 CTR (Bom) 44 : (1995) 211 ITR 652 (Bom), the assessee relied on CIT vs. Sri Venkateswara Hatcheries (P) Ltd. (1988) 71 CTR (AP) 80 : (1988) 174 ITR 231 (AP). The Tribunal applied the ratio of Sri Venkateswara Hatcheries' case (supra) and decided the issue in favour of the assessee. In CIT vs. Venkateswara Hatcheries (P) Ltd. (1999) 153 CTR (SC) 105 : (1999) 237 ITR 174 (SC), the Supreme Court has overruled the judgment of the Andhra Pradesh High Court in Sri Venkateswara Hatcheries' case (supra) and approved the view taken in Deejay Hatcheries' case (supra) and held as under :

(3.) IN view of the above, we hold that the Tribunal erred in law in admitting the claim of the assessee for deductions under ss. 80HH, 80 -I and 32AB of the Act in respect of the benefits of poultry -farming. Accordingly, this question is answered in favour of the Revenue and against the assessee.