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TMI Blog2001 (2) TMI 121X X X X Extracts X X X X X X X X Extracts X X X X ..... 85-86 at Rs. 62,723.23 which claim was accepted by the Assessing Officer under section 143(1) and the same was reopened under section 143(2)(b). The Income-tax Officer withdrew the investment allowance earlier granted vide order dated March 29, 1988, and against which an appeal was taken before the Deputy Commissioner (Appeals). During this period regular assessment for the assessment year 1986-87 was completed under section 143(3) by order dated March 31, 1987, in which the assessee's claim was accepted for the grant of investment allowance in respect of the aforesaid plant and machinery amounting to Rs. 1,21,549. However, the Commissioner of Income-tax being of the view that such grant of investment allowance was erroneous and was preju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... escribed in section 32A." This order was subjected to appeal before the Tribunal, which held that the process in the unit was that it accepts the negatives of the photo-films and after applying chemicals and other things it delivers colour photo graphs in different sizes. It very much amounted to production of an article or thing if not manufacture. In coming to this conclusion it relied on a large number of decisions rendered by various Benches of the Income-tax Appellate Tribunal. The Tribunal was of the view that the Commissioner has merely reviewed the order of the Income-tax Officer because the order was not in favour of the Revenue but in view of various decisions, the Tribunal held that the assessee had duly complied with the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing pictures of the human body through the process of mechanical ultra sound processors and radiations. The contention raised by the Revenue in two cases was very much in line with the reason adopted by the Commissioner of Income-tax in his order under section 263, viz., the process in bringing out the x-ray photos carrying the photographs of the inner body does not result in manufacture of any article or thing. The substance of the contention was that it is only a part of rendering service to a particular Consumer that the inner part of the human body of a particular person was projected on x-ray photos and those photographs are used for the purpose of diagnosis. It does not result in manufacture or production of any article or thing to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral merchandise. Whether the transaction of processing of negatives or for bringing out positive photo prints for the purpose of specified customers. result into manufacture or production of any article or thing is for transferring it to a specified customer who owns negative or could be sold on counter to anyone who wants to buy may be relevant in the context of considering sale of goods for the purposes of levy under the Sales Tax Act, but is hardly relevant consideration for deciding the controversy in the con text of the Income-tax Act. Under the Sale of Goods Act the basic requirement is existence of goods of which there can be a sale within the meaning of the Sale of Goods Act, the sale being the taxable event. It is in that back grou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e expression used in section 32A is in the singular and of much narrower import. The principle which has been enunciated by the Rajasthan High Court and the Gujarat High Court referred to above in connection with securing x-ray plates containing photographs of the inner part of the human body is nearer home. The process of securing the end-product in both has similarity namely photographs of various objects, viz., human body obtained by mechanical process through human skill and labour can be firstly impressed on the negative films and then after processing the same is processed in various sizes on the photo papers for the purpose of delivering to the customers, may for the purpose of sales tax amount to a contract of service, but cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X
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