9911796707
TMI Blog1997 (8) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... her, on the facts and in the circumstances of the case, the assessee is entitled to exemption under section 80HH of the Income-tax Act, 1961 ? 2. Whether, on the facts and in the circumstances of the case, the assessee is entitled to exemption under section 80J of the Income-tax Act? 3. Whether, on the facts and in the circumstances of the case, the assessee derived any profit and gain from an 'industrial undertaking' to claim the benefit of sections 80HH and 80J ?" The facts relevant are as follows : The assessee is a firm carrying on the business in export of cashew kernels and shell oils. Claiming that it owns an industrial undertaking engaged in the manufacture or production of an article or thing, it put forward a claim for deductio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the conditions contained under clause (iv) of section 80HH(2) of the Income-tax Act, it was found not entitled to claim deduction under section 80HH. As far as its claim under section 80J is concerned, the first appellate authority, finding that the assessee was carrying on manufacturing activity, allowed the claim. In coming to the above conclusion, the first appellate authority found that the mere fact that the assessee did not directly process the cashew kernels, will not be a reason to find that it was not carrying on manufacturing activity. The reason given by the Income-tax Officer for rejecting the claim under section 80J was not thus acceptable to the first appellate authority. The Tribunal has entered a factual finding that part o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned standing counsel for the Revenue submits that the Tribunal has not considered the specific question whether the assessee was an industrial undertaking. There is no definition of the term "industrial undertaking" under the Income-tax Act, 1961. But, according to learned standing counsel for the Revenue, it must be something more than a unit engaged in manufacture or processing of goods. On the other hand, learned counsel for the assessee would point out that the assessing authority itself had proceeded on the basis that the assessee was not entitled to claim deduction under sections 80HH and 80J only for the reason that it was not engaged in manufacture or production of goods. Once the above finding is upset by the Tribunal, the Reven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Finance Act, 1972. The term "industrial company" was defined under clause (c) as follows : "(c) 'industrial company' means a company which is mainly engaged in the business of generation or distribution of electricity or any other form of power or in the construction of ships or in the manufacture or processing of goods or in mining." This court took the view that the assessee therein would be treated as engaged in the business of manufacture or processing of goods, even though a major portion of the processing was being got done through other agencies under its supervision. Learned counsel for the assessee pointed out that the above view taken by this court as also the Calcutta High Court relied on by the Tribunal, was affirmed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Revenue (?) that in the light of the decision of the Supreme Court in Chillies Exports House Ltd. v. CIT [1997] 225 ITR 814, even an assessee which gets the entire manufacturing or production done through an outside agency can get the benefit of an industrial undertaking, if it is held that in order to be an industrial undertaking, what is necessary is that the assessee is carrying on manufacture or production of an article. We do not think that it is necessary for us to consider such a contention in this case since the finding of the Tribunal is that part of the manufacturing process is directly done by the assessee. In all the three cases, namely, CIT (Addl.) v. A. Muhherjee and Co. (P.) Ltd. [1978] 113 ITR 718 (Cal) ; CIT v. Rajmoha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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