TaxTMI 
TaxTMI 
2015 (6) TMI 555
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....re, for the facility of reference, we take the facts from assessment year 2002-03. The assessee has filed its return of income on 28-10-2002 declaring total income of Rs. 92,10,770/-. On scrutiny of the accounts, it revealed to the AO that the assessee company was incorporated on 29-05-1972. It had claimed deduction of Rs. 5,93,684/-u/s. 35D of the I.T Act 1961 being 1/10th of share issue expenses. Similar expenses have been claimed in the assessment years 2003-04 and 2004- 05. The ld. AO has disallowed the claim of the assessee on the ground that the conditions stipulated in section 35D of the I.T Act 1961 mandates that the assessee should be an industrial undertaking. Since the assessee engaged in the business of construction of road and ....
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....gh Court in the case of Ansal Housing & Construction Ltd Vs. CIT in Appeal Nos.1261, 1278, 1287 and 1402 of 2008 are not applicable on the facts of the present case. On the other hand, the ld.DR has relied upon the orders of the revenue authorities. 6. We have duly considered the rival contentions. The section 35D has a direct bearing of the controversy. Therefore, it is pertinent to take note of the relevant provisions of the said section, which reads as under:- "Where an assessee, being an Indian company or a person (other than a company) who is resident in India, Incurs, after 31st day of March, 1970, any expenditure specified in sub section (2). (i) before the commencement of the business, or (ii) after the commencement of his busin....
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....'ble Supreme Court in the case of N.C Budharaja & Co. (supra). Therefore, reference to page nos. 183-185 of the paper book is of no use. Similarly, the assessee had made a reference to page no.42 which is a browser in respect of some conference/workshop held by Construction Industry Development Council [ CIDC]. On reading of this, no where suggests that assessee engaged in construction activity would be construed as industrial undertaking. These references are all together for different purpose. Ld. 1st appellate authority has made a lucid analysis in the impugned order. It is pertinent to make reference to the finding of the ld.CIT(A), which reads as under:- "I have carefully perused the assessment order as well as the submissions of ....
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....ion can, by no stretch of imagination, be treated as manufacturing activity as it does not amount to manufacture or production of an article or a thing. The relevant extract of the Hon'ble Court's order is reproduced hereunder: "16. From the discussion up to now, it follows that: (a) industrial undertaking is to be given the meaning which is understood in common parlance, and (b) which should be interpreted widely. At the same time, we have to bear in mind that the expression is to be construed in the context of Section 35-D of the Act and it is to be further discerned as to whether the business of construction activity would be treated as an industrial undertaking or not. 17. In P. Alikunju M.A Nazer Cashew Industries (supra), ....
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....ommissioner of Income Tax, 1999(77) DLT 765, opined that the business of construction of building will not fall within the ambit of industrial company. This appears to be a case of sister concern of the present assessee itself, but, unfortunately, our attention was not even drawn to this judgment by the counsel on either side. In these circumstances, we answer Question No.1 formulated above against the assessee and in favour of the Revenue." In the light of the clear findings given by the Hon'ble Delhi High Court in Ansal Housing and Construction Ltd vs. CIT (Supra) it is held in the instant case that the assessee is not an industrial undertaking within the meaning of section- 35D, therefore, its claim of deduction u/s. 35D was rightly....