2011 (2) TMI 1625 - HC - Income Tax

Summary

Issues involved: Interpretation of eligibility for deduction under Section 80 IA/80 IB of the Income Tax Act based on the manufacturing activity of NC Lacquer.

Summary:
The High Court of Bombay addressed the question of whether the assessee was entitled to deduction under Section 80 IA/80 IB of the Income Tax Act for being engaged in the manufacture of NC Lacquer. The Tribunal's finding of fact highlighted that the raw materials undergo multiple processes to become a distinct marketable commodity, NC Lacquer, with altered physical and chemical properties. The end-product is different from the original raw materials and is recognized as a separate entity in the market and under Central Excise Law. The Court upheld the Tribunal's decision, emphasizing that the manufacturing process transforms the raw materials into a new product, justifying the eligibility for the deduction. The appeal was dismissed with no costs incurred.