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TMI Blog2005 (12) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... ontext in which section 80J has been incorporated. The intention is clear, namely, the expression "begins to manufacture" is used as a noun and that is when the undertaking achieves the end product out of the process of manufacture. We are thus unable to accept the contention of the Department. Question No. 1 is answered in the negative, i.e., in favour of the assessee and against the Department. Questions Nos. 2 and 3 are consequential questions and they are covered by the answer given under question No. 1. - - - - - Dated:- 15-12-2005 - Judge(s) : A. K. YOG., PRAKASH KRISHNA. JUDGMENT The Income-tax Appellate Tribunal, Allahabad, has referred the following questions of law for the opinion of this court under section 256(1) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment year 1971-72. According to the assessee, the flour mill did not manufacture or produce "article" or "goods" in the relevant assessment year although the wheat was put in the flour mill as part of manufacturing process-for production purposes. A controversy centres round the interpretation of section 80J of the Act, which is reproduced below: "80J. Deduction in respect of profits and gains from newly established industrial undertakings or ships or hotel business in certain cases.-(1) Where the gross total income of an assessee includes any profits and gains derived from an industrial undertaking or a ship or the business of a hotel, to which this section applies, there shall, in accordance with and subject to the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate its cold storage plant or plants or the ship is first brought into use or the business of the hotel starts functioning (such assessment year being hereafter, in this section, referred to as the initial assessment year) and each of the four assessment years immediately succeeding the initial assessment year: Provided that in the case of an assessee, being a co-operative society, the provisions of this sub-section shall have effect as if for the words 'four assessment years', the words 'six assessment years' had been substituted." The relevant expressions used in the section if read separately are-"to manufacture article" and "to produce article". Shri S.K. Garg, learned counsel for the assessee, submitted that the phrase "begins to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al power; to do, produce or make (section 73 ill.(q), Indian Contract Act.) Manufacturing operation: (section 80P(2)(f), Income-tax Act.) Manufacturing process: (section 2(2), Sugarcane Act and section 2(k), Factories Act)." "Produce: 1. something that is brought forth or yield either naturally or as a result of effort and work (section 145 (2, Cr. P.Q); 2. to bring forward; to bring forth or out; to bring into being; to yield." Black's Law Dictionary 6th Edition- Page 155 "Begin-To originate; to come into existence; to start; to institute; to initiate; to commence." Page 964: "Manufacture, v. From Latin words manus and factura, literally, put together by hand. Now it means the process of making products by hand, machinery, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sses. 2. Anything made by industrial art or processes; manufactured articles collectively." Page-1006 "Produce: n. That which is produced; a product; specifically, form products collectively." There "n" and "v" stand for "noun" and "verb". Webester's Third New International Dictionary and seven language dictionary Page 1378: "Manufacture: n 1: something made from raw materials by hand or by machinery Production creation Page 1810 "vi: to bring forth a product or production: bear, make, or yield that which is according to nature or intention: grow, make, or furnish economically valuable products (laboured literally day and night to-Vera M. Dean). produce pra, d(y)us, 'Pro.,-1. n-s 1 a(l): something that is brought forth or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the aid of power ..." If the Legislature intended to include process of manufacture it could have, as it has done elsewhere, specifically expressed so. We have no doubt, in the context in which section 80J has been incorporated. The intention is clear, namely, the expression "begins to manufacture" is used as a noun and that is when the undertaking achieves the end product out of the process of manufacture. We are thus unable to accept the contention of the Department. Question No. 1 is answered in the negative, i.e., in favour of the assessee and against the Department. Questions Nos. 2 and 3 are consequential questions and they are covered by the answer given under question No. 1. Questions referred - answered accordingly. No ..... X X X X Extracts X X X X X X X X Extracts X X X X
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