Restaurant food preparation is trading activity, not manufacture or production, so Section 80J relief was denied.

Preparing eatables in a restaurant by processing raw materials for sale to customers was treated as a trading activity, not as manufacture or production of an article or thing. Relying on consistent judicial authority, the article states that restaurant or hotel operations of this kind do not amount to manufacturing or processing for the purposes of the income-tax incentive provision. On that basis, the assessee could not claim relief under Section 80J, and the disallowance was upheld.

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Issues: Whether the preparation of eatables in a restaurant amounted to manufacture or production of an article or thing so as to entitle the assessee to relief under Section 80J of the Income-tax Act, 1961.

Analysis: The activity carried on in the restaurant section consisted of preparing food from raw materials for sale to customers. Consistent judicial authority had held that such hotel or restaurant activity is a trading activity and does not amount to manufacture or processing within the meaning of the relevant tax provisions. On that basis, the assessee's activity could not be treated as manufacture or production of articles or things for the purpose of Section 80J.

Conclusion: The assessee was not entitled to relief under Section 80J, and the disallowance was upheld.

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