TMI Blog1987 (4) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... ejected both by the Income-tax Officer and the Appellate Assistant Commissioner. However, the Income-tax Appellate Tribunal accepted the claim. At the instance of the Revenue, the Tribunal has referred to this court the following questions of law: Assessment years 1967-68 and 1968-69 : " (1) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee carried on the business of manufacture or production of 'motor trucks and buses' as specified in the list in the Fifth Schedule to the Income-tax Act, 1961, and should be considered as a 'priority industry' ? (2) Whether, on the facts and in the circumstances of the case, the assessee is entitled to relief under sections 80E/80-I o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies in the case of certain companies.-(1) In the case of a company to which this section applies, where the total income (as computed in accordance with the other provisions of this Act) includes any profits and gains attributable to the business of generation or distribution of electricity or any other form of power or of construction, manufacture or production of any one or more of the articles or things specified in the list in the Fifth Schedule, there shall be allowed a deduction from such profits and gains of an amount equal to eight per cent. thereof, in computing the total income of the company...... " " 80-I. (relevant for the assessment year 1968-69 only): Deduction in respect of profits and gains from priority, industries in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , according to him, was certainly not an article or a thing which could be sold. For this purpose, he tried to derive support from the Supreme Court decisions in State of Gujarat v. Variety Body Builders [1976] 38 STC 176; Ram Singh and Sons Engineering Works v. Commissioner of Sales Tax [1979] 43 STC 195 ; and the Punjab and Haryana High Court decision in Ambala Coach Builders v. State of Haryana [1977] 39 STC 44. The crucial expression calling for interpretation in this reference is " the business of construction, manufacture or production of any one or more of the articles or things specified in the Fifth/Sixth Schedule ". This is exactly the expression used in section 33(1)(b)(B) and section 80E as also in section 80B(7) except with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d not be entitled to these benefits, cannot be lost sight of. Needless to mention, such a construction requires to be avoided. Having regard to all those aspects, we agree with the Tribunal that bus body builders are as much carrying on the business of manufacturing motor buses as chassis manufacturers are and that the assessee was, therefore, rightly held to be entitled to higher development rebate under section 33(1)(b)(B) and deduction under sections 80-E and 80I read with section 80B. In this view, we are fortified by the Madras High Court's decision in CIT, v. Simpson and Co. Ltd. [1983] 141 ITR 35 (Mad), where the assessee in identical circumstances was held entitled to higher development rebate falling both under item No. 10 and item ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tor buses as manufacturers of chassis. The facts in the above two Supreme Court decisions relied upon were different. In Variety Body Builders' case [1976] 38 STC 176 (SC), the assessee was constructing/manufacturing railway coaches for the Railways. The question involved was whether the assessee in that case was transferring railway coaches as chattel. On the facts of that case, the court held that it was not so. More or less similar facts obtained in Ram Singh Sons Engineering Works' case [1979] 43 STC 195 (SC). It is, however, of particular significance that in State of Gujarat v. Variety Body Builders [1976] 38 STC 176 (SC), the Supreme Court referred to its earlier decision in the case of McKenzies Limited v. State of Maharashtra [ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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