CIT Vs Surjit & Surindera Investments Pvt. Ltd (Punjab and Haryana High Court)
The Punjab and Haryana High Court addressed common issues in a bunch of appeals, which were disposed of by a common order. The appellant, the Commissioner of Income Tax (CIT), sought to set aside a common order dated April 24, 2002, passed by the Income Tax Appellate Tribunal (ITAT) concerning Assessment Years (AY) 1984-1985 and 1985-1986. Facts for brevity were borrowed from ITA-198-2002.
Issues Raised by the Appellant
The appellant raised the following questions of law:
- Whether the Tribunal was correct in allowing the investment allowance under Section 32A of the Income Tax Act, 1961, to the assessee company on plant and machinery that was not actually utilized by the assessee itself for its business of construction, manufacture, or production of any article or thing. The plant and machinery were hired out to its sister concern, M/s G.S. Attwal & Co., which also allegedly did not use it for construction, manufacture, or production (referred to as mining in the case), according to a report from M/s Eastern Coal Fields Ltd.
- Whether the Tribunal was correct in ignoring the report of M/s Eastern Coal Fields Ltd. regarding the true nature of the contract and activities of M/s G.S. Attwal & Co., noting that M/s Eastern Coal Fields Ltd. is an authority on the subject of mining.
- Whether the Tribunal was correct in allowing the investment allowance under Section 32A on dumpers, even though the dumpers were only road transport vehicles and not actually used by the lessee company in the so-called mining operations.
Tribunal’s Holding and Appeals’ Status
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