INCOME TAX OFFICER v. PRABHAKAR GINNING FACTORY
[Citation -1985-LL-0406]

Citation 1985-LL-0406
Appellant Name INCOME TAX OFFICER
Respondent Name PRABHAKAR GINNING FACTORY
Court ITAT
Relevant Act Income-tax
Date of Order 06/04/1985
Assessment Year 1979-80
Judgment View Judgment
Keyword Tags application for rectification • manufacture or production • investment allowance
Bot Summary: The Revenue had sought for an adjournment on the ground that an application for rectification was pending before the CIT(A). The substance of the application before the CIT(A) is that there was a mistake in specifying the exact quantum of reliefs to which the assessee is entitled to in para 10 of his order. According to the Revenue, the working of s. 80J relief required to be correctly done in accordance with law as obtained. The quantum of reliefs to be allowed would be in conformity with our directions on the various points. The first contention of the Revenue is that the assessee could not be said t o be engaged in manufacture or production of articles which was a primary condition for the allowance of reliefs under ss. The point for consideration is whether the assessee is engaged in the manufacture or production of articles and is entitled to the reliefs under the various statutory provisions referred to. The ITO will now work out the reliefs due in accordance with law under the various provisions having regard to the fact that ginning is a manufacturing process and all other relevant attendant circumstances.


This appeal is by Revenue and relates to asst. yr. 1979-80. Revenue had sought for adjournment on ground that application for rectification was pending before CIT(A). adjournment was granted on earlier occasion and since application still remained to be disposed of, we consider that it is not necessary to postpone hearing any longer. substance of application before CIT(A) is that there was mistake in specifying exact quantum of reliefs to which assessee is entitled to in para 10 of his order. This is because, according to Revenue, apart from ginning operations there were actual purchase and sale of cotton which were trading activities and in worrying out investment allowance due regard would have to be had for this also. So also, according to Revenue, working of s. 80J relief required to be correctly done in accordance with law as obtained. We consider that hearing of appeal need not be held over any longer. We direct that quantum s of relief as specified in paragraph 10 of other of CIT(A) will not be treated as conclusive. quantum of reliefs to be allowed would be in conformity with our directions on various points. first contention of Revenue is that assessee could not be said t o be engaged in manufacture or production of articles which was primary condition for allowance of reliefs under ss. 80J, 80HH and 32A. assessee derived income from ginning factory. point for consideration is whether assessee is engaged in manufacture or production of articles and is entitled to reliefs under various statutory provisions referred to. As far as this Bench of Tribunal is concerned, it is no longer dispute that ginning constitutes manufacturing operation following decision of Madras High Court in CIT vs. R. Narayanaswami Naicker and Sons (1984) 149 ITR 283 (Mad). This is conclusion to which CIT(A) has arrived at and we agree with ld. counsel for assessee that finding of CIT(A) in this regard has to be upheld and Revenue fails on this connection. CIT(A) has stated in para 7 of his order that ITO is directed to allow various claims under ss. 80HH, 80J, and investment allowance which were disallowed consequent on ITO s finding that ginning was not manufacturing process. ITO will now work out reliefs due in accordance with law under various provisions having regard to fact that ginning is manufacturing process and all other relevant attendant circumstances. result is that appeal is treated as dismissed subject to our aforesaid observations. *** INCOME TAX OFFICER v. PRABHAKAR GINNING FACTORY
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