Ginning as manufacturing process supports income-tax relief under sections 80J, 80HH and 32A for the assessee.

Ginning was treated as a manufacturing operation because the Tribunal followed a binding High Court ruling on the point. On that basis, the earlier finding that the assessee was not engaged in manufacture or production could not stand. The assessee's entitlement to relief under sections 80J, 80HH and 32A was therefore required to be worked out in accordance with law, treating ginning as a manufacturing process and considering the relevant attendant circumstances. The issue was decided in favour of the assessee and against the Revenue.

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Issues: Whether ginning amounts to manufacture or production so as to entitle the assessee to relief under sections 80J, 80HH and 32A of the Income-tax Act, 1961.

Analysis: Ginning was treated as a manufacturing operation in view of the binding High Court decision relied upon by the Tribunal. On that basis, the finding that the assessee was not engaged in manufacture or production could not stand. The reliefs were therefore required to be worked out in accordance with law, taking ginning as a manufacturing process and considering the relevant attendant circumstances.

Conclusion: The issue was decided in favour of the assessee and against the Revenue.

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