Dredging and manufacture: mere recovery of sand from the sea bed does not qualify as an industrial undertaking for section 80J relief.

Dredging activity that merely removes sand from the sea bed and separates it from rocks and boulders does not amount to manufacture. Because the sand is not produced from raw material and the process does not bring into existence a new product, the operation is not treated as an industrial undertaking for relief under section 80J of the Income-tax Act, 1961. The dredgers only recover sand in the same form in which it existed at the sea bottom after separation from surrounding matter, so the claimed deduction is not available.

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Issues: Whether the appellant's dredging activity amounted to manufacture so as to qualify as an industrial undertaking for relief under section 80J of the Income-tax Act, 1961.

Analysis: The activity consisted only of removing sand from the sea bed and separating it from surrounding materials such as rocks and boulders. The sand was not produced out of any other raw material, and the process did not result in the manufacture of a new product. The dredgers merely brought up sand in the form in which it existed at the sea bottom after separation from the surrounding matter.

Conclusion: The activity was not manufacture, and the appellant was not entitled to the benefit of section 80J.

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