9911796707
TMI Blog1984 (2) TMI 126X X X X Extracts X X X X X X X X Extracts X X X X ..... fabricated in its own workshop as well as sub-contractors according to the required drawings and designs and then assembling and utilising them for and in the course of carrying out the repair assignments. 2. Stating that the execution of such jobs involves the following stages : (i) Employment of mechanics and electricians ; (ii) Purchase of substantial quantities of engineering materials such as iron and steel sheets, bars, angles, tubes, etc., as well as several other components ; (iii) Conversion of these into required forms and shapes by various machining and engineering processes ; (iv) Assembling and installing such processed components in the course of repairing jobs on board the ships, barges, etc. ; the assessee claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns and the Tribunal's orders in support of their rival contentions. We propose to deal with all their contentions in the course of our order. 4. It may be mentioned at the outset that by means of the first ground, the department has challenged the order of the Commissioner (Appeals), directing the ITO to consider the assessee-company as an industrial company. It, however, appears that the expression " industrial company " has been loosely used by the authorities below as well as the assessee and in fact for the purpose of entitlement to investment allowance under section 32A, the assessee has to be ' an industrial undertaking ' within the meaning of section 32A and not ' an industrial company '. 5. Therefore, in order to appreciate the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowing the 1st day of April, 1948, or such further period as the Central Government may, by notification in the Official Gazette, specify with reference to any particular industrial undertaking ;" 6. There is not even a suggestion that the assessee is a small-scale industrial undertaking within the meaning of sub-clause (ii) or set up for the purposes of business of generation or distribution of electricity or any other form of the power within the meaning of sub-clause (i) of clause (b) of sub-section (2) of section 32A. Therefore, in order to be entitled to investment allowance under section 32A, the assessee-company has to satisfy the condition laid down in sub-section (2)(ii) of section 32A. The assessee, as stated above, is admitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or a thing, it is implied that such articles or things are manufactured or produced for the purpose of sale and not for the purpose of some job work. 7. However, as stated by us earlier, a number of High Court decisions as well as the Tribunal's orders were cited by the parties before us. Therefore, it is only desirable to refer to them in somewhat detail before we decide the issue before us. The facts before the Orissa High Court in the case of N.C. Budharaja Co. were the followings : The High Court was concerned with the term ' industrial undertaking ' in section 80HH of the Act, for which there was no statutory definition. The assessee was engaged in the construction of dam which was an irrigation project of considerable magnit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nto two parts, for neither the frames nor the slabs or beams were manufactured or prepared independently of the buildings or sold as such in the market. The Madras High Court in the case of CWT v. K. Lakshmi [1983] 142 ITR 656 was concerned with the interpretation of, what is meant by ' engaged in manufacturing or processing of goods ' an defined in Explanation to section 5(1)(xxxii) of the Wealth-tax Act, 1957. The assessee in that case purchased art silk yarn, dyes, lace, etc., and gave them to the weavers to convert them into cloth for which weaving charges, dyeing charges, etc., were paid by the assessee. The cloth so manufactured was being sold by the assessee. It was held that it will not be correct to state that all the process resul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Durandel Foods (P.) Ltd. v. ITO [1983] 6 ITD 207 (Hyd.). The assessee in that case was engaged in packing malted food ' Horlicks.'. Under an agreement with HMM Ltd. the process carried on by the assessee involved rigid procedure, formulae, specifications, standards and other instructions as per the agreement. The assessee used its own machinery and labour for such packing. It was held that the assessee did manufacture or, at any rate, produce a commercially different article in respect of bottled Horlicks and it was entitled to claim investment allowance. The Special Bench of the Tribunal at Delhi was concerned with the interpretation of the expression ' industrial company ' under section 2(9)(c) of the Finance Act, 1976, as well as the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
