9911796707
|
Home
Issues involved: Interpretation of sections 32A and 80-I of the Income-tax Act, 1961 regarding relief eligibility for an industrial undertaking engaged in granite extraction and processing.
Summary: The High Court of Karnataka addressed the questions raised by the Income-tax Appellate Tribunal regarding the eligibility of an assessee, a public limited company involved in granite extraction and processing, for investment allowance under section 32A and deduction under section 80-I of the Income-tax Act, 1961. The Commissioner of Income-tax had withdrawn the reliefs initially granted by the Assessing Officer, contending that the activities did not qualify as manufacturing for the purposes of the said sections. The Tribunal considered the nature of the assessee's activities, involving extracting granite from quarry, converting it to slabs, cutting, and polishing before sale. The Tribunal opined that these operations constituted manufacturing or production, making the assessee eligible for the reliefs under sections 32A and 80-I. The Revenue argued against this view, citing a previous sales tax case where similar activities were not considered manufacturing. In analyzing the legal provisions, the Court emphasized that manufacturing involves a process resulting in a new or different article, with a change in the nature of the goods. Previous judgments, such as CIT v. Mysore Minerals Ltd., supported the classification of such activities as industrial undertakings eligible for investment allowance under section 32A. The Court also considered the applicability of section 80-I concerning profits and gains from industrial undertakings. Ultimately, the Court upheld the Tribunal's decision, ruling in favor of the assessee and against the Revenue. It concluded that the original assessment granting reliefs under sections 32A and 80-I was valid, and the Commissioner's intervention under section 263 was deemed improper. The Court affirmed that the assessee's business activities qualified as manufacturing or production for the purpose of availing the specified reliefs under the Income-tax Act.
|
