9911796707
TMI Blog2002 (3) TMI 235X X X X Extracts X X X X X X X X Extracts X X X X ..... lant and machinery purchased/acquired during the year under consideration. The AO did not examine the allowability of the claim in accordance with the relevant provisions of the law and his order is silent on this aspect, which implies that the claim of investment allowance had been allowed. Since the enquiry which ought to have been conducted, had not been done, the order was considered as erroneous and prejudicial to the interest of the Revenue. Further, being a job worker, it was not the assessee s business to manufacture or produce any article or thing nor it is so in the case of open cast mining activity, and under these circumstances the order passed by the AO was considered erroneous and prejudicial to the interest of the Revenue by CIT. Therefore, the order was revised under the provision of s. 263 of the IT Act and while doing so he had also referred to the case of CIT vs. Mysore Minerals Ltd. (1994) 205 ITR 461 (Kar), which was not accepted by the Department and SLP was filed before the Hon ble Supreme Court. Therefore, the CIT has directed the AO to withdraw the claim of investment allowance under s. 32A. 3. As regards first ground of appeal the learned authorised repr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use: (i) The AO had framed assessment order after due and diligent enquiry and allowed the claim under s. 32A to be carried forward as per the view on the fact-situation. Accordingly, his action was neither erroneous nor prejudicial to the interest of the Revenue. (ii) The appellant was though engaged in performing job work of mining of gypsum, yet it was engaged in the manufacturing of goods which were commercially different from the earlier one which was part and parcel of the earth and mines and resulted in a different saleable item only after the appellant s activities of excavating, raising, loading and transporting the same. (iii) The learned authorised representative placed reliance on the case of CIT vs. Trinity Hospital (1996) 131 CTR (Raj) 328 : (1997) 225 ITR 178 (Raj) wherein it was held that the photographs of various parts of the body obtained by these machines are the resultant product of work or activity. Photographs or the graphs are obtained from these machines, which are the results of efforts or activity, can be said to be thing under s. 32A of the Act. (iv) The decision of the Hon ble Karnataka High Court even if not accepted by the Department and even ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. The learned Departmental Representative relied upon the order of CIT and he contended that as far as the words used in s. 32A of the IT Act are similar to the provisions contained in s. 80HH. The learned authorised representative relied upon the case of CIT vs. Lucky Minerals (P) Ltd. (1996) 134 CTR (Raj) 541 : (1997) 226 ITR 245 (Raj), which had been affirmed by Hon ble Supreme Court in Lucky Minmat (P) Ltd. vs. CIT (2000) 162 CTR (SC) 404. It was only a case of excavation and there is no production or manufacture of any item. Therefore, the assessee was not entitled to investment allowance under s. 32A of the Act. 9. We have considered the rival submissions. In this case the appellant is engaged in mining, raising, loading and transporting gypsum from mines owned by RSMMC. For this business the appellant had acquired plant and machinery which is being used for aforesaid business activity. The assessee had claimed investment allowance of Rs. 4,88,238 on the machinery purchased/acquired for the above business. 10. The CIT revised the order passed under s. 263 of the IT Act with the direction to withdraw the investment allowance allowed under s. 32A of the IT Act on the grou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment allowance. We find that the CIT has not resorted to the provisions of s. 32A(5). He was legally competent to review the order under s. 263 without referring to the provision of s. 32A(5) of the Act. 15. In ground No. 4, the learned authorised representative inter alia submitted that the appellant was though engaged in performing job work of mining of gypsum yet it was engaged in the manufacturing of goods which were commercially different from the earlier one which was part and parcel of the earth and the mines. He had relied heavily on the case of CIT vs. Trinity Hospital. Secondly, he has contended that the Tribunal has no option but to accept the appeal and set aside the order of the CIT in the cases where the ground for decision taken by CIT is found to be wrong and not tenable in law. 16. Before coming to the Conclusion we shall refer to various judgments where the word manufacture or production has been defined. The learned authorised representative has relied upon the case of CIT vs. Trinity Hospital. The facts of this case are that the assessee was running a hospital and it had installed various machines in its hospital, like x-ray machine, ultra sound scanner/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, it was held that the assessee was not entitled to the deduction under s. 80HH of the Act. We find that the facts of the case of Lucky Mineral (P) Ltd. are similar to the facts of the case of the appellant. 17. In the case of Dy. CST vs. Pio Food Packers (1980) 46 STC 63, 65 : (1980) Suppl. SCC 174, the Hon ble Supreme Court considered the meaning of the word "manufacture" with reference to several decisions and stated the test in the following words: "There are several criteria for determining whether a commodity is consumed in the manufacture of another. The generally prevalent test is whether the article produced is regarded in the trade, by those who deal in it, as distinct in identity from the commodity involved in its manufacture. Commonly, manufacture is the end result of one or more processes though which the original commodity is made to pass. The nature and extent of processing may vary from one case to another, and indeed there may be several stages of processing and perhaps a different kind of processing at each stage. With each process suffered, the original commodity experiences a change. But it is only when the change, or a series of changes, take the commo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9-90. The said return was processed under s. 143(1) and the claim of investment allowances was allowed to be carried forward. 22. In the asst. yr. 1990-91 the appellant had also made a claim of unabsorbed investment allowances. For that year i.e., current year s investment allowances which was of Rs. 4,88,238 that the assessee had claimed current year s investment allowances of Rs. 4,88,238 and also along with that separately claimed unabsorbed investment allowances brought forward from preceding asst. yr. 1989-90 (Rs. 4,82,265). The AO had also allowed this claim while framing the order under s. 143(3) vide his order dt. 27th Sept., 1991. This order was revised by CIT under s. 263 of the Act on 18th March, 1994, directing the AO to withdraw the claim of investment allowance under s. 32A. The CIT directed to withdraw the investment allowance of Rs. 4,88,238 relating to the current assessment year i.e., 1990-91 and he has not given any direction to withdraw the investment allowance claimed by the appellant and allowed to be carried forward to the appellant from asst. yr. 1989-90 under s. 143(1). 23. The AO while giving effect to the direction of the CIT contained in the order un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Department wants to deny those statutory benefits, it is for the Department to cancel the order and till then, it is impermissible for the Department to deny the benefits in the assessment proceedings for subsequent assessment years. Though we uphold the order of the Tribunal we uphold the same not for the reasons stated by the Tribunal but for other reasons stated above." In this case the CIT has revised the order under s. 263 for asst. yr. 1990-91 for withdrawal of investment allowance under s. 32A of the IT Act. But the investment allowance of Rs. 4,82,265 was allowed in asst. yr. 1989-90 and was brought forward in the asst. yr. 1990-91 from asst. yr. 1989-90. The investment allowance allowed in asst. yr. 1989-90 which has been brought forward to asst. yr. 1990-91 cannot be withdrawn under s. 154 of the IT Act as the CIT has not revised the order for asst. yr. 1989-90. Therefore, the AO is directed to allow the benefit of carry forward of unabsorbed investment allowance under s 32A of the IT Act for the asst. yr. 1990-91 as the CIT has not issued any direction to revise the order for asst. yr. 1989-90. 26. In the result, ITA No. 1158(Jp)/94 is dismissed and ITA No. 130 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
