2016 (8) TMI 1288 - HC - Income Tax

Deduction u/s 80HH, 80I and 80IA - manufacturing activity - Held that - As decided in assessee s own case 2013 (5) TMI 956 - BOMBAY HIGH COURT LPG bottling plant would entitle the assessee to the benefit under Section 80HH, 80I and 80IA of the Act.

Summary

Issues:
1. Whether the activity of bottling LPG gas into cylinders amounts to production or manufacturing activity for the purpose of Sections 80HH/80I/80IA of the Income Tax Act, 1961?
2. Whether the Tribunal was correct in holding that the activity of bottling LPG amounts to production or manufacturing activity for the purposes of Sections 80HH/80I/80IA of the Income Tax Act, 1961?

Analysis:
1. The High Court considered the issue of whether the activity of bottling LPG gas into cylinders qualifies as production or manufacturing activity under Sections 80HH/80I/80IA of the Income Tax Act, 1961. The Counsel for the Revenue raised this question before the Court, emphasizing the significance of this classification for tax purposes.

2. The Court referred to a previous decision where the Tribunal allowed the respondent assessee's appeal based on the Court's decision in the respondent assessee's own case. The Court had previously ruled in favor of the respondent assessee, establishing that the activity carried out at their LPG bottling plant entitled them to benefits under the relevant sections of the Income Tax Act.

3. The Counsel for the Revenue acknowledged that the issue had already been settled by the Court's previous decision in favor of the respondent assessee. The Court concurred with this assessment, stating that the questions raised did not present any substantial legal issues as they were already addressed and decided in favor of the respondent assessee in the previous judgment.

4. Consequently, the Court dismissed both appeals, noting that the questions raised were not novel and had been previously resolved in favor of the respondent assessee. The Court upheld the decision based on the precedent set in the earlier case, thereby affirming the Tribunal's ruling regarding the classification of the activity of bottling LPG gas into cylinders as production or manufacturing activity for tax purposes under the Income Tax Act.

5. In conclusion, the Court's judgment emphasized the importance of consistency in legal decisions and upheld the principle of stare decisis by following its previous ruling in a similar case. The dismissal of the appeals was based on the precedent established by the Court's earlier decision, which determined the eligibility of the respondent assessee for tax benefits based on the nature of their activities at the LPG bottling plant.