1987 (7) TMI 166

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....ufacture of cloth from yarn purchased by it. Apart from this activity the assessee purchased huge quantity of grey cloth which it got dyed, bleached and then sold them in the market. The view taken by the ITO was that to the extent of the activity which related to the purchase of cloth followed by its dyeing etc. cannot be termed as a manufacturing activity. He placed reliance on CIT vs. S.S.M. Finishing Centre (1984) 40 CTR (Mad) 200 : (1985) 155 ITR 791 (Mad) for this proposition and placed that the order of the ITO should be restored. On that the other hand, the plea of the assessee's counsel was that the assessee had 200 handlooms which were use by it for conversion of yarns into cloth after which they were bleached, dyed and printed. S....

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.... material commercially different from the basic components by physical labour or mechanical process. And a manufacturer is a person by whom or under whose direction and control the articles or materials are made." The Board's Circular No. 347 dt. 7th July 1982 has accepted the fact that it is not necessary that the entire manufacturing operations should be carried out by an assessee himself and that he could carry out such operations by getting them done through outside agencies. The case law relied on by the ld. Departmental Representative is on the issue of allowing of development rebate under s. 33 of the IT Act where the rebate is allowed if the plant is installed for the purpose of business of manufacture or production of any one of m....