2010 (12) TMI 339 - HC - Income Tax

Relief u/s.32A and 801A - Industrial undertaking - Amount to manufacture - The details culled out by the Commissioner of Income Tax (Appeals) while passing the order the assessment years 1986- 87, 1994- 95 and 1995- 96 would disclose the various products and equipments manufactured and supplied by the respondent assessee to its customers / end users - The respondent / assessee has explained the nature of its operations for its different principals - In one such statement the respondent / assessee has submitted that it used to purchase raw materials, manufacture and supply and errect for various public undertakings - The above details furnished by the respondent assessee supported by material documents sufficiently demonstrated before both the lower authorities - Having regard to such detailed consideration of relevant materials by the lower appellate authorities and the Tribunal which had reached a finding of fact as regards the manufacturing activity of the respondent assessee, there is no scope for interference on such finding of fact arrived at by the Tribunal - Decided against of revenue.

Summary

Issues:
1. Entitlement for benefits under Section 32A and 80IA of the Income Tax Act, 1961.

Analysis:
The judgment revolves around the question of whether the respondent assessee is eligible for benefits under Section 32A and 80IA of the Income Tax Act, 1961, based on its involvement in the manufacturing of articles and things. Section 32A requires the assessee to own a plant or industrial undertaking for the purpose of construction, manufacture, or production of any article or thing. Similarly, Section 80IA defines an "Industrial Undertaking" as an entity mainly engaged in manufacturing or processing. The assessing authority initially deemed the respondent as a contracting firm not involved in manufacturing. However, the C.I.T. Appeals and the Tribunal concluded that the respondent was engaged in manufacturing activities as part of its contractual operations, making it eligible for benefits under the mentioned sections. The judgment stemmed from a remittal order by the Court and directions from the Tribunal to reevaluate the claim of Investment Allowance and deduction under the Act. The lower authorities extensively reviewed the manufacturing activities of the respondent, including the supply of industrial equipment, and found substantial evidence supporting its classification as an "Industrial Undertaking." The Tribunal's decision aligned with the Division Bench's ruling in a previous case, affirming the eligibility of the respondent for the tax benefits. The Court upheld the Tribunal's decision, dismissing the tax case appeals and confirming the entitlement of the respondent to the benefits under Section 32A and 80IA of the Income Tax Act, 1961.