9911796707
TMI Blog1984 (11) TMI 350X X X X Extracts X X X X X X X X Extracts X X X X ..... of the same turn on the question whether the business carried on by the assessee can be said to be that of 'manufacture' as envisaged in section 32A(2)(b)( iii) of the Act. Under this clause any new machinery and plant installed after 31-3-1976 will be available for investment allowance if it is in an industrial undertaking for the purpose of business or construction, manufacture or production of any article or thing not being an article falling in the list of the Eleventh Schedule to the Act. There is no dispute that the assessee is an industrial undertaking and the articles dealt in by it do not fall within the list of the Eleventh Schedule. The sole dispute is as to whether the assessee could be said to be engaged in the business of manufacture. According to the department's contention, the assessee cannot be held to be engaged in the business of manufacture of articles of goods and the activity of bleaching, dyeing, calendering, printing, etc., carried out by the assessee is mere processing because by such processing the article or thing does not undergo any change and what was cloth before such processing continues to remain so even after such processing. Reference was made in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eligible to the deduction under the section unless the accounts of the industrial undertaking for the concerned previous years as stated therein have been audited by a qualified accountant and the assessee furnishes along with its return of income the report of such audit in the prescribed form. 4. The contention of the assessee in regard to investment allowances under section 32 and relief under section 80J is that the assessee's activities of business amount to manufacture. In this connection, the assessee's leaned counsel strongly relied on the decision of the Bombay High Court in New Shakti Dye Works (P.) Ltd. v. UOI 1983 ECR 1143D. He pointed out that the facts involved in that case are identical to the facts involved in assessee's case before us because the activities of the assessee considered in the Bombay High Court's decision are similar to the activities of the assessee in this appeal. He read out an extract of the judgment of the Court at page 1148 deciding the test of manufacture on general and first principles. He also referred to the decision of the Madras High Court in the case of Workers v. Management of the United Bleachers (P.) Ltd. AIR 1960 Mad. 131. It was the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the argument that a dyed and printed cotton fabric must be treated on the same footing or indeed as the same article as commonly known as grey cloth. The use to which the bleached, dyed and printed and finished product could be put to is entirely different or in any case, in addition to the use to which grey cloth could be put. The printed material in its finished form is wholly different from the grey cloth and, in fact, the grey cloth could be treated as the basic material which is subjected to different processes. Admittedly, the printed material is known in the market not by the same name, i.e., 'grey cloth'. Cotton fabric is merely a general description but, there may be various types of cotton fabrics and yet it can never be said that all cotton fabrics are identical or are the same as the base material which was originally given to the processors. On first principles, therefore, we are not inclined to accept the contention of the learned counsel for the petitioners that bleaching, dyeing, printing and finishing processes are not manufacturing processes." It is to be noted that the Supreme Court decision in Delhi Cloth & General Mills Ltd.'s case (supra ) has been consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r production' and 'manufacture' means making an article which is capable of being used and designed to be used in ordinary life. This decision also, in our view, reinforces the assessee's claim that the processes carried out by it in respect of goods purchased and sold as well as in respect of goods brought to it for carrying out such activities of bleaching, dyeing, printing, etc., amount to manufacture. We, therefore, reject the objections of the department and hold that the assessee is entitled to the investment allowance as well as relief under section 80J in the appropriate year for which deduction is claimed. 6. Coming to the third objection about the prescribed Form No. 10D being furnished before being held to be eligible for section 80J relief, it is pointed out that the Commissioner (Appeals) has not given any specific finding in favour of the assessee on this point on the ground that there is no question of any allowance of relief or deduction under section 80J for the year under appeal as the assessee had only incurred a loss to be carried forward and this requirement will become material only when the assessee is actually entitled to a deduction in a later year. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onary plant and wiring and fittings of electric lights and fan installations. Thus, it is argued that transformers are not entitled to extra shift allowance and, therefore, the Commissioner (Appeals) was not justified in directing the grant. The learned counsel for the assessee submitted that the transformers could not be regarded as an independent item of machinery, but is part and parcel ofthe textile processing machinery which is eligible for extra shift allowance. Only such transformers which do not come within the specified category, it is argued, that are ineligible for extra shift allowance. 8. On a consideration of the facts and rival contentions, we are inclined to agree with the assessee's stand accepted by the Commissioner (Appeals). It is undisputed that the concerned transformers form part of the textile processing machinery and would be otherwise eligible for extra shift allowance according to rules but for the exception stated in the Appendix referred to by the departmental representative. Now, it is to be seen that the appendix sets out the various types of machinery and in respect of each category there are items of plant and machinery which bear the inscription ' ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
