TMI Blog1994 (1) TMI 126X X X X Extracts X X X X X X X X Extracts X X X X ..... d machinery worth Rs. 1,22,44,037 for its work in India. It claimed investment allowance to the extent of Rs. 1,09,99,748. The conditions regarding the creation of reserves stood complied with for both the years. 4. The Assessing Officer negatived the claim of the assessee on the strength of the decision of the Calcutta High Court in Addl. CIT vs. Mukherjee Co. (1978) 113 ITR 718 (Cal) and the decision of the Bombay High Court in CIT vs. Shah Construction Co. (1982) 30 CTR (Bom) 245 : (1983) 142 ITR 696 (Bom) and also the decision of the Pune Bench of the Tribunal in the case of WTO vs. Lalchand Manekchand Mehta Bhosawal (WTA Nos. 82 83/PN/77-78) which held that the construction company cannot be treated as an industrial company. 5. On appeal, the assessee relied on the decision of the Orissa High Court in the case of CIT vs. N.C. Budharaja Co. (1980) 121 ITR 212 (Ori). It also relied on the decision of the Cochin bench of the Tribunal dt. 30th Jan., 1987, in its own case, which was in its favour. As a result, the CIT(A) held that the assessee-company is an industrial undertaking and is entitled to investment allowance subject to the fulfilment of the statutory conditio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowance on plant and machinery used by it for the manufacture or fabrication of articles or things utilised in the course of construction of roads, bridges, etc. and held ultimately that dam or road or a bridge cannot be construed as articles or things which always refer to movable properties and therefore, a construction company would not be eligible for investment allowance on the plant and machinery used by it in the course of its construction activities [CIT vs. Shankar Construction Co. (1993) 114 CTR (SC) 420 : (1993) 204 ITR 412 (SC)]. On the question whether a construction company can be considered as an industrial company as was held by the High Court, no arguments were advanced by the Revenue before the Supreme Court and the issue was left open by the Supreme Court. 6. It is against this background in the assessee's own case vis-a-vis the latter decisions in allied cases that we are called upon to decide the issue whether there is a mistake apparent on record in the order of the Tribunal cited supra when it decided the issue in favour of the assessee, following the High Court judgment in its own case. 7. Shri Sarangan, the learned counsel for the assessee, submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Ker). 9. We have thus heard rival submissions and perused the records. We have narrated the facts of the case in paras 1 to 4 above. From the grounds of appeal extracted in para 5 above, it will be evident that the main thrust of the Revenue's grievance was that the assessee is only a contractor and cannot be treated as an industrial undertaking. This issue, whether a construction company is an industrial undertaking or not has been left open even in the decision of the Supreme Court in Shankar Construction Co.'s case. In CIT vs. N.C. Budharaja Co. (1993) 114 CTR (SC) 420 : (1994) 204 ITR 412 (SC) at page 431, the Supreme Court noticed that— "Even here, learned counsel for the Revenue, Shri Murthy, concentrated only upon the second requirement. He did not address any arguments with respect to the first, for which reason we do not propose to express any opinion thereon." In this context we may point out that the first requirement is whether the assessee is an industrial undertaking. Thus, on this aspect of the matter, there is no pronouncement by the Supreme Court. The assessee in the case before us continues to do similar or identical work, as in the earlier years, as e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'subject to other conditions being fulfilled' had the effect of drawing the attention of the Tribunal to the question whether the assessee was engaged in the manufacture or production of articles or things not listed in the 11th Schedule and on this aspect of the matter, the Tribunal has not rendered its decision. We do not accept such a contention though very persuasively put forward before us. The CIT(A) had followed the decision of the Cochin Bench of the Tribunal in the assessee's own case for the earlier assessment years holding that the assessee was an industrial company engaged in the manufacture of articles or things not listed in the 11th Schedule. After following the order of the Tribunal, the CIT(A) held as follows: For asst. yr. 1982-83 "The ITO is directed to grant investment allowance subject to the appellant having fulfilled the various statutory conditions like creation of necessary reserve and also the ITO can satisfy himself that the plant and machinery is the one which is not prohibited for the grant of investment allowance." For asst. yr. 1983-84 "As the facts of the case are similar, I would direct the ITO to allow investment allowance subject to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elied on by the Tribunal by a Division Bench. When the Bench of the High Court overruled the decision of the single judge, the earlier decision was never the law. The law on the point at all times was as stated by the Bench in the decision reported by the Division Bench. Therefore, the High Court directed the Tribunal to rectify the mistake in the light of s. 254(2) r/w s. 154 of the IT Act, 1961. 13. From the facts narrated above, it will be abundantly clear that the Tribunal in the case of Kil Kotagiri Tea Coffee Estates Co. Ltd. has followed the decision of single judge in A. Sethumadhavan vs. CIT (1980) 16 CTR (Ker) 376 : (1980) 122 ITR 587 (Ker). That decision of the single judge was overruled by the Division Bench in the appeal proceedings, in another case A. Sethumadhavan vs. Union of India (1982) 29 CTR (Ker) 127 : (1982) 135 ITR 39 (Ker) in this context that the Kerala High Court held that the Tribunal having followed the single judge decision in Sethumadhavan's case which was subsequently reversed by the Division Bench, a mistake had crept in the order of the Tribunal when it followed the decision of the single judge and therefore the Tribunal was duty-bound to recti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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