9911796707
TMI Blog1993 (2) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... nces of the case, the assessee is entitled to the deduction under section 80HH of the Income-tax Act, 1961 ?" The respondent which is a private limited company is an assessee to income-tax. We are concerned with the assessment year 1980-81. The business of the company is centrifuging rubber latex. The assessee claimed that the business involves manufacture or production of articles and things and so, the company is entitled to deduction under section 80J as well as under section 80HH in respect of a unit working at Nagercoil in Kanyakumari district, which has been declared as a backward area. The Income-tax Officer rejected the said plea. He held that the assessee does not carry on manufacturing operations nor does it produce any article. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iance on a notification of the Central Government No. 189 of 1983 dated July 8, 1983 the assessee pleaded that the Government of India had considered the preserved latex, latex concentrated, etc., as manufactured goods. The Tribunal, after adverting to the above notification of the Central Government, held that the Government had proclaimed that the assessee was a manufacturer and that the said notification has to be applied with equal force to the Income-tax Act also. It was held that the assessee is entitled to deduction under sections 80J and 80HH. The plea of the assessee was accepted. It is thereafter, at the instance of the Revenue, that the two questions of law formulated hereinabove have been referred for the decision of this court. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rendered for the years 1977-78 and 1978-79 in Income-tax Applications Nos. 187 and 188/ (Coch) of 1982 dated December 23, 1983. The Appellate Tribunal held that the notification dated July 8, 1983 (No. 189 of 1983), considered the latex concentrate, preserved latex, etc., as manufactured goods and this notification was not brought to the notice of the Tribunal when it decided the appeal for the years 1977-78 and 1978-79. According to the Appellate Tribunal, the notification makes all the difference and, after discussing certain decisions, the Tribunal took the view that, by means of centrifuging process, normal latex is converted into preserved latex which is entirely a different commercial product. On a perusal of the order of the Appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en done by the Appellate Tribunal in the instant case, nor has any definite finding been entered that by manufacture or production, a new and different article has come into being. These defects are fatal. Moreover, the test to ascertain or find out whether there is manufacture or production has not been adverted to or applied in the instant case. Constitution Benches of the Supreme Court had occasion to consider the matter in very many decisions. One of the earliest decisions is Union of India v. Delhi Cloth and General Mills Co. Ltd., AIR 1963 SC 791. One of the latest decisions is Ujagar Prints v. Union of India [1989] 179 ITR 317. Venkatachaliah I. , as he then was, after reviewing the earlier decision on the subject, held at pag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earlier decision in Income-tax Applications Nos. 187 and 188/(Coch) of 1982 dated December 23, 1983. The approach to the question is totally faulty. The resultant conclusion is tainted. We hold that the decision of the Appellate Tribunal is not in accordance with law. In the above circumstances, we decline to answer the questions referred to this court by the Appellate Tribunal at the instance of the Revenue. We direct the Income-tax Appellate Tribunal, Cochin Bench, to restore the appeal to file and decide the matter afresh in accordance with law. The reference is disposed of as above. A copy of this judgment, under the seal of this court and the signature of the Registrar, shall be forwarded to the Income-tax Appellate Tribunal, Cochin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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