JUDGMENT
1. The Income-tax Appellate Tribunal, Allahabad, has referred the following question of law under Section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), for opinion of this Court:
Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that the assessee was entitled to the deduction under Section 80J on the capital employed in the two chambers added to the existing cold storage?
2. The reference relates to the assessment years 1976-77 to 1978-79. Briefly stated the facts giving rise to the present reference are as follows:
3. The assessee-firm was running a cold storage. Amongst other things, it claimed relief under Section 80J, as a new industrial undertaking. The Income-tax Officer disallowed the claim on the similar reasons as given in the assessment years 1974-75 and 1975-76, namely, that the assessee did not employ 10 or more workers and that there was no separate independent viable unit which came into existence and that the new unit was formed by transfer of machinery, etc., previously used for business purposes. In short, the Income-tax Officer found that the conditions have not been fulfilled, for the assessment year 1976-77. Similar disallowance was made by the Income-tax Officer in respect of other assessment years under reference.
4. The assessee took up the matter before the Commissioner of Income-tax (Appeals) and contended that the Appellate Tribunal in the case of the assessee itself vide order for the assessment year 1975-76 dated May 16, 1981, and also for the assessment year 1974-75 dated September 7, 1981, held that the conditions laid down under Section 80J was not applicable in the case of cold storage and it was confined to an undertaking doing manufacture or production. The Commissioner of Income-tax (Appeals) also noted that his predecessor for the assessment year 1975-76 found that there was a separate independent viable unit. He noted that after the remand order, the Income-tax Officer conceded that there were separate connections. The present Commissioner of Income-tax (Appeals) agreed with the decisions for the earlier years and held that there was a separate independent viable unit for which a claim under Section 80J has been made. The Commissioner of Income-tax (Appeals) following his earlier order as indicated above, allowed the claim of the assessee for the next two years also.
5. The Revenue took up the matter before the Appellate Tribunal contending that the Commissioner of Income-tax (Appeals) erred in directing the Income-tax Officer to allow deduction under Section 80J when the earlier orders of the Appellate Tribunal had not been accepted by the Department. The Appellate Tribunal took up all the points for disposal by its common order as the facts of the case and the background were similar. The Appellate Tribunal heard both the sides and considered the decision of the Appellate Tribunal dated May 16, 1981, and was of the view that the dispute was covered by its earlier decision for the assessment year 1974-75 being I.T.A. Nos. 1222 and 1342/(Alld.) of 1980. Following that decision, the Appellate Tribunal dismissed the appeals by the Revenue on the point.
6. We have heard Sri A.K. Mahajan, learned Counsel for the Revenue. No one appears on behalf of the respondent.
7. We find that under Section 80J(2) of the Act deduction in respect of profits and gains is also available to the existing cold storage. In the present case the Tribunal held that the assessee was entitled to the deduction under Section 80J on the two chambers added to the existing cold storage. In this view of the matter the Tribunal was right in giving the deduction under Section 80J.
8. We, therefore, answer the question referred to us in the affirmative, i.e., in favour of the assessee and against the Revenue. However, on the question giving rise to the present reference the parties are left to bear their own costs.