9911796707
TMI Blog1996 (5) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... see was engaged in manufacturing of items referred to in the Ninth Schedule to the Income-tax Act, 1961, and in allowing initial depreciation under section 32(1)(vi) ? Whether, on the facts and in circumstances of the case, the Tribunal was right in upholding the decision of the Commissioner of Income-tax (Appeals) that expenditure of Rs. 7,140 was not entertainment nature ? " The claim of the assessee under section 32(1)(vi) for initial depreciation of new machinery was disallowed. The assessee is carrying on the business of purchase of grey cloth and after applying certain mechanical and chemical process it converted the grey cloth into finished calendered cloth. It was claimed that the business of the assessee is to manufacture textile ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he claim was, therefore, allowed. In respect of the claim of Rs. 7,140 on account of factory tea and coffee expenses, the Tribunal found that it was not an expenditure in the nature of entertainment. Item No. 21 of the list of articles or things as specified in the Ninth Schedule [deals with] " textiles " including those dyed, printed or otherwise processed, made wholly or mainly of cotton, including cotton yarn, hosiery and rope. In Empire Industries v. Union of India [1986] 162 ITR 846 (SC), with reference to Central excise, bleaching, dyeing and printing of cloth whether amounts to manufacture or not was considered and the apex court observed that the process of bleaching, dyeing and printing is not a process of manufacture. The bene ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and other clothing material is not correct. The production of grey cloth in the present case has already made it marketable, and calendering has not changed the basic character. The textile was already manufactured and the benefit under the Ninth Schedule was given for the manufacturing of textiles to a textile unit. The further processing cannot be considered that by that the assessee has manufactured the textile. In these circumstances, we are of the view that the Income-tax Appellate Tribunal was not justified in holding that the assessee was engaged in the manufacturing of items referred to in Schedule IX of the Income-tax Act, 1961, and allowing initial depreciation under section 32(1)(vi). So far as expenditure of Rs. 7,140 is conce ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
