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TMI Blog2003 (4) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee itself?" For the assessment year 1985-86: "Whether, on the facts and in the circumstances of the case and in law, the Tribunal was justified in deleting addition made under section 43B?" The relevant assessment years are 1983-84 to 1985-86. The entire factory premises including machinery, etc., were leased out by the assessee-company to M/s. Pratap Rajasthan Special Steels Ltd. with effect from August, 1981. No manufacturing activities were carried on by the assessee-company itself as the entire plant had been leased out from the very first month of the previous year relevant to the assessment year 1983-84 for the whole of the previous year relevant to the assessment year 1985-86. The assessee though had not manufactured any a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uirement under the provisions of section 80-I that the assessee himself should manufacture article or things. Though he has given the factory on hire to a third party and manufacturing is also by the third party, in spite of that, the assessee is entitled for the benefit of section 80-I of the Act, 1961. Mr. Kasliwal placed reliance on the decision of the Madras High Court, which has been relied on by the Tribunal in the case of CIT v. Universal Radiators P. Ltd. [1981] 128 ITR 531; CIT v. Flender Macneill Gears Ltd. [1984] 150 ITR 83 (Cal); CIT v. Western Mechanical Industries P. Ltd. [1991] 187 ITR 265 (Bom); CIT v. U.P. State Agro Industrial Corporation (No.1) [1991] 188 ITR 370 (All) and the decision of their Lordships in the case of CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rporation (No.1) [1991] 188 ITR 370, the Allahabad High Court has taken the view that when the assessee imports components of tractors and various parts are assembled by it to form tractor, the company is justified in claiming on the ground that the company is indulging in manufacturing activity and entitled for deduction under section 80J. This case has no relevance as the admitted fact before us is that the assessee has not manufactured itself any article or things. In CIT v. Render Macneill Gears Ltd. [1984] 150 ITR 83, the issue before the Calcutta High Court was when the assessee manufactures gears which is a priority industry and sold it to distributors as per the agreement, the assessee is entitled to charge interest from distributo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h are to be fulfilled for deduction under section 80-I of the Act, which reads as under: "(i) it is not formed by the splitting up, or the reconstruction, of a business already in existence; (ii) it is not formed by the transfer to a new business of machinery or plant previously used for any purpose; (iii) it manufactures or produces any article or thing, not being any article or thing specified in the list in the Eleventh Schedule, or operates one or more cold storage plant or plants, in any part of India, and begins to manufacture or produce articles or things or to operate such plant or plants, at any time within the period of ten years next following the 31st day of March 1981, or such further period as the Central Government may, by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wing deduction to the assessee under section 80-I of the Act. The next additional issue in the assessment year 1985-86 relates to the deletion of addition made under section 43B of the Act. Mr. Mathur fairly admits that the issue is concluded by their Lordships in the case of Allied Motors P. Ltd. v. CIT [1997] 224 ITR 677 (SC), wherein their Lordships have taken the view that in case the payment is made though beyond the accounting year but within the period permissible under the Sales Tax Act, no addition should be made invoking the provisions of section 43B of the Act. Considering these submissions, we answer question No. 1, which is common for the three years, in the negative, i.e., in favour of the Revenue, and against the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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