TMI Blog1993 (7) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... as claimed that the work undertaken by the assessee-firm was a process which was normally carried on by a coal miner engaged in open cast mining and further claimed to be treated as an industrial undertaking eligible for investment allowance under section 32A of the Act. The assessee also filed a letter of intent dated December 27, 1980, and a certificate dated February 22, 1984, from the agent of Rajpura Colliery. The Income-tax Officer found that the letter of intent indicated that the assessee would be paid at certain rate as hiring charges of heavy earth moving machinery. It was pointed out that from the tax deduction certificate issued by the collieries it was noticed that the payments were made against the contract for hiring the afor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture was neither accurate nor decisive. He pointed out that the rate of payment was fixed with reference to the work done, i.e., the cutting, removing of earth, stones, coal, etc. He further noted that the assessee did not lease or let out the machines on hire and if it was engaged therein it was doubtful that the claim for investment allowance could be denied to the assessee as the machinery continued to be with the assessee. The Commissioner of Income-tax (Appeals) referred to the decisions reported in Ajodhya Prasad Tara Chand Khekra v. CIT [1967] 66 ITR 576 (All) and CIT v. Castlerock Fisheries [1980] 126 ITR 382 (Ker) and further noted that the assessee was engaged in the job of removing the overburden, cutting and transportation of ea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntent indicated that the assessee was engaged for the purpose of mining coal or extracting coal on behalf of the colliery concerned. Having regard to the entirety of the facts and circumstances of the case and the materials available on record and also having regard to the finding recorded by the authorities below; the Tribunal held that the assessee's activities cannot be considered as involving industrial activity so that the allowance available under section 32A could arise. Thus, the order of the Commissioner of Income-tax (Appeals) on the point was reversed and that of the Income-tax Officer restored. From this set of facts, the Tribunal has referred the following two questions for our opinion, one under section 256(1) and the other un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lly blasting the coal belt and store the coal lifting the same to a place as per direction. As would be evident from the narration of facts, the assessee was engaged for the purpose of mining of coal and/or extraction of coal on behalf of the collieries concerned. The fact remains that the assessee, in this case, was engaged in producing coal. For the foregoing reasons and in view of the reasons contained in the judgment of the day delivered in Income-tax Reference No. 34 of 1987 (CIT v. Mercantile Construction Co.), we answer the first question in the negative and the second question in the affirmative and both in favour of the assessee and against the Revenue. There will be no order as to costs. BHAGABATI PRASAD BANERJEE J.-- I ag ..... X X X X Extracts X X X X X X X X Extracts X X X X
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