2016 (8) TMI 1290 - HC - Income Tax

Deduction u/s 80HH, 80I and 80IA - manufacturing activity - Held that - As decided in assessee s own case 2016 (7) TMI 1375 - 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 bottling of LPG gas into cylinders constitutes production or manufacturing activity for the purpose of Sections 80HH/80I/80IA of the Income Tax Act, 1961?
2. Whether the activity of bottling LPG amounts to production or manufacturing activity for the purposes of Sections 80HH/80I/80IA, even if no new product comes into existence?

Analysis:
1. The appeal challenges the order of the Income Tax Appellate Tribunal regarding the Assessment Year 1997-98. The primary issue raised is 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 crux of the matter revolves around the interpretation of these provisions in the context of the specific activity undertaken by the assessee.

2. The Revenue contends that the process of bottling LPG does not amount to production or manufacturing activity as it does not result in the creation of a new product. The Tribunal, however, held that the activity of bottling LPG into cylinders does constitute production or manufacturing activity for the purposes of the aforementioned sections. The key argument centers on whether the process of bottling makes the product marketable and if that alone satisfies the criteria for claiming benefits under the relevant sections.

3. The court noted that a previous appeal by the Revenue concerning the Assessment Year 1999-2000 was dismissed by the court as it did not raise any substantial question of law. It was further acknowledged by both parties that the current appeal also does not give rise to any substantial question of law. Consequently, the court declined to entertain the question raised in the appeal and proceeded to dismiss it based on the lack of substantial legal issues for consideration.

4. In conclusion, the court dismissed the appeal, emphasizing that since it did not present any substantial question of law for deliberation, the matter was not entertained further. The decision was in line with the court's previous ruling on a similar appeal and the mutual agreement between the parties regarding the absence of significant legal issues in the current appeal.