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TMI Blog1987 (8) TMI 147X X X X Extracts X X X X X X X X Extracts X X X X ..... stment allowance. The Commissioner of Income-tax was of the view that the assessee did not manufacture or produce any article or thing and so it is not entitled to investment allowance under section 32A. As he was of the view that the assessment order is prejudicial to the interests of the revenue he invoked the provisions of section 263 of the Act. After considering the explanation of the assessee he passed the order dated 20-11-1985. He held that the assessee excavates rocks containing the natural ore, crush the rocks and by sieving obtain the managanses ore, which is later washed to remove impurities. He held that this does not amount to manufacture or production of an article. Thus, he enchanced the assessment by Rs. 28,912 and directed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e note that the manganese ore which is finally graded into various sizes is a different commodity from the rock which was under the surface. The end product is the managanese ore which is different from rock. Thus, by mining operations, the manganese ore is producted which is an article or thing. Thus, the assessee is entitled to investment allowance under section 32A on the machinery which is used in the mining operations for producing managanese ore. In Chrestien Mica Industries Ltd. v. State of Bihar [1961] 12 STC 150 (SC); the assessee-company was carrying on mica mining operations by which crude mica is taken out of the mine and processed into split mica which is a commercial product. On those facts, the question arose whether there wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wgule & Co. (P.) Ltd. v. Union of India 1981 Tax LR 2929 referred to by the Commissioner of Income-tax in his order is clearly distinguishable as that is a case where after mining operations the blending of ore was done in the course of loading through mechanical ore handling plant. The question arose whether it amounted to manufacture or process of ore. It is on those facts it was held that it amounted to processing of ore. The facts of that case are entirely different from the facts of the instant case and that decision has no application. We hold that assessee in the instant case is entitled to investment allowance under section 32A of the Act. We cancel the order of the Commissioner of Income-tax. 5. In the result, the appeal is allowe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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