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TMI Blog2020 (1) TMI 133X X X X Extracts X X X X X X X X Extracts X X X X ..... yed payment of outstanding balance, any delayed payment and interest thereon would be constituted as income from business and not income from other sources. Revenue has argued that actually in that case, an appeal could not be carried to the Supreme Court because of lower tax effect. However, he has not been able to cite any judgment to show or give any reason why the proposition laid down by the Bench in that case could not be followed. In the circumstances, we hold question No.1 against the Revenue and in favour of the Assessee. Deduction u/s 80IC - whether process undertaken by the assessee is a manufacturing activity? - metamorphosis of yarn into thread is manufacturing OR process - HELD THAT:- It is not disputed that the yarn w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A of the Income Tax Act, 1961 against the order dated 13.07.2017 passed by the Income Tax Appellate Tribunal, Division Bench, Chandigarh, in ITA No. 02/Chd/2014 for the A.Y.2009-10. 5. ITA No.321 of 2019 has been filed under Section 260A of the Income Tax Act, 1961 against the order dated 11.12.2018 passed by the Income Tax Appellate Tribunal, Division Bench, Chandigarh, in ITA No. 762/Chd/2009 for the A.Y.2006-07. 6. For the sake of convenience, facts are being extracted from ITA No.5 of 2018. 7. The brief facts relating to the issues are that the assessee had earned interest income from the security deposit made with the Electricity Board (HPSEB). The Assessing Officer treated the said interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arn would not constitute 'manufacturing' in every case. 9. Learned counsel for the Assessee has referred to the judgments of this Court in case titled as Phatela Cotgin Industries Pvt. Ltd. vs. Commissioner of Income Tax wherein it was held that in such a case where there is provision in the contract for interest on the delayed payment of outstanding balance, any delayed payment and interest thereon would be constituted as income from business and not income from other sources. 10. Learned counsel for the Revenue has argued that actually in that case, an appeal could not be carried to the Supreme Court because of lower tax effect. However, he has not been able to cite any judgment to show or giv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... At this stage, we may also reproduce, hereinbelow, para 10 of our judgment in the case of C.I.T. v. Oracle Software India Ltd., reported in MANU/SC/0040/2010: 2010 (1) SCALE 425. The term manufacture implies a change, but, every change is not a manufacture, despite the fact that every change in an article is the result of a treatment of labour and manipulation. However, this test of manufacture needs to be seen in the context of the above process. If an operation/process renders a commodity or article fit for use for which it is otherwise not fit, the operation/process fall's within the meaning of the word manufacture . 14. It is not disputed that the yarn which has been used by the Assessee cannot b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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