9911796707
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Issues:
1. Rejection of claim under section 80J and initial depreciation by the ITO. 2. Conflicting decisions in previous years' assessments. 3. Determining whether the operations constitute manufacturing activities for claiming relief under section 80J and allowance under section 32(1)(vi). Detailed Analysis: 1. The ITO rejected the claim of relief under section 80J and initial depreciation for specific sums. The matter was then taken to the AAC, who dismissed the appeal based on previous decisions against the assessee by the Madras Bench B of the Tribunal. The Full Bench was referred to due to conflicting decisions in previous years (1974-75 and 1975-76) and a decision in favor of the assessee in a different case. The issue revolved around the interpretation and application of these sections. 2. The appellant's representative enumerated the various operations carried out on rough castings to manufacture bearing shells, arguing that these operations constituted production or manufacture. The representative presented a detailed list of operations and cited various legal precedents to support the claim. The Departmental Representative contended that the activities were akin to a machine job and did not amount to manufacturing. The crux of the issue was whether the operations qualified as manufacturing under the relevant provisions. 3. The Tribunal analyzed the nature of the operations performed by the assessee to transform rough castings into finished products. After examining the details and exhibits, the Tribunal concluded that the activities indeed constituted manufacturing. The Tribunal rejected the Department's argument that the service charges received by the assessee negated its status as a manufacturing undertaking. Citing a recent decision by the Madras High Court, the Tribunal affirmed that the assessee was entitled to relief under section 80J and the allowance under section 32(1)(vi) based on the manufacturing activities conducted. In conclusion, the Tribunal allowed the appeal, ruling in favor of the assessee based on the manufacturing nature of the operations performed on the rough castings. The judgment clarified the interpretation of relevant sections and emphasized that the transformation of raw materials into finished products qualified as manufacturing for the purpose of claiming statutory reliefs and allowances.
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