9911796707
TMI Blog2011 (11) TMI 130X X X X Extracts X X X X X X X X Extracts X X X X ..... allowed. See Aspinwal and Co. Ltd. v. CIT-(2001 (9) TMI 3 - SUPREME Court) - Decided against the assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing Officer whereas the finding recorded by the Commissioner of Income Tax are upheld by the Tribunal. The only issue raised by learned counsel for the assessee in the present appeals is that process of dry cleaning is a part of the manufacturing process and thus, the income derived from dry cleaning, job work of the third parties, is also income derived from industrial undertaking having direct and proximate nexus with its manufacturing activities and, therefore, the assessee is entitled to deductions under Section 80-I of the Act. Since the said activity is in the process of export activity as well, therefore, the assessee is entitled to deduction under Section 80-HCC as well. Though the learned Tribunal has referred to the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of repairs to ocean-going vessels or other powered craft, to which this section applies, there shall, in accordance with an subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction from such profits and gains of an amount equal to twenty per cent thereof:" Firstly, we will examine the claim of the assessee for deduction under section 80-HCC. Learned counsel for the assessee has vehemently argued that by clause (baa) to the explanation to Section 80-HCC "profits of business" has been introduced by the Finance Act No.2 of 1991, its income received from dry cleaning process is also an income in the export business of the assessee, therefore, liable to be taken into con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustrial undertaking and, thus entitled to deduction under Section 80-I of the Act. Reliance is placed upon an order passed by this Court in CIT v. Impel Forge and Allied Industries Ltd. (2009) 183 Taxman 38 and also judgments of the Delhi High Court reported as NU-Look (P) Ltd. v. CIT (1957) 157 ITR 25 and CIT V. Northern Aromatics Ltd. (2005) 196 CTR 479. Reliance was also placed upon the Full Bench judgment of this Court reported as CIT v. Sovrin Knit Works, (1993) 199 ITR 679 wherein the question which arose was whether the process of dyeing, furnishing, singeing would fall within the ambit of manufacturing or production of textiles as envisaged by Entry 23 of Schedule I of the Industries (Development and Regulations) Act, 1951. It was f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a part of manufacturing process. Reference is also made to (2009) 317 ITR 218 (SC), Liberty India v. CIT, wherein it has been held that Sections 80-IA and 80-IB have a common scheme. The words "derived from" are narrower in connotation as compared to the words "attributable to". By using the expression "derived from", the Parliament intended to cover sources not beyond the first degree. That was a case where benefit/entitlement pass scheme was declined as an income derived from an industrial undertaking. It is, thus, argued that process of dry cleaning is not a process falling in the first degree which may be considered for claiming deduction under Section 80-I of the Act. Keeping in view the aforesaid pronou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pel Forge and Allied Industries Ltd., have found so in view of the facts of the case. But we find that the facts on record do not suggest a finding that the process of dry cleaning undertaken by the assessee is such which relates to a step in the manufacturing process. Though, in the case of Emptee Poly-Yarn (P) Ltd. it has been held that texturising and twisting of yarn constitute manufacturing, i.e., even without giving such materials a new formation, qualities or combinations as observed in the case of Aspinwal and Co. Ltd., but the fact remains that there are details available as to what was being dry cleaned and whether the process of dry cleaning is a part of the manufacturing process. Therefore, in the facts of the case, we are una ..... X X X X Extracts X X X X X X X X Extracts X X X X
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