1979 (5) TMI 100

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.... for this assessment year also. 2. The matter has been referred to the Full Bench because there is already decision against the assessee in the assessee's own case for the asst. yrs. 1974-75 and 1975-76 and as against this there is also a decision on identical facts in favour of the assessee in the case of ITO, Company Circle II(3), Madras vs. M/s. Southern Ancillaries Pvt. Ltd. Madras in ITA Nos. 1912 and 1913 (Mds)/74-75 operations done by that assessee constituted production or manufacture. In view of the conflict of opinions, the matter has been referred to the Full Bench. 3. Shri. G. Seetharaman, C.A. appearing for the assessee enumerated the various operations done and rough castings entrusted for manufacturing bearing shells by Sou....

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....he assessee's case squarely fit in the group of manufacture or production. He also cited various decisions as under: (i) Chrestian Mica Industries Ltd. vs. State of Bihar & another (SC) 12 STC 150 Pages 153 (ii) G.R. Kulkarni vs. State 8 STC 295 Pages 296 & 297 (iii) Hiralal Jotmal vs. CST 8 STC 325 Pages 327, 328 & 329 (iv) Raghbirchand Somchand vs. Excise and Taxation Officer 11 STC 149 Pages 154 and 155 (v) Commissioner of Sales tax vs. Dr. Sukh Dev. 23 STC 385 Pages 387 (vi) Balbu Prasad Amarnath vs. CST 15 STC 47 Page 48 (vii) CIT vs. Ajay Printery (P) Ltd. (1965) 58 ITR 811 (Guj) 4. The Deptl. Representative on the other hand, contended that primarily what the assessee did, was nothing more than what is done in a machin....

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....2 and 1913 (Mds) 74-75 dt. 5th June, 1976. Firstly, we may refer to the order of the Bench in ITA Nos. 49 and 50(Mds)/76-77 in the assessee's own case which was followed by the AAC and we find that one of the points made out that the assessee must also own the raw materials, the Bench has not accepted the reasoning because that was not necessary. According to it giving shape to the rough casting does not amount to manufacture. We also agree with the observations of the Bench that it is not necessary that the undertaking must itself own the material on which the manufacturing operation is done. Dealing with the allowance under s. 32(1)(vi) in this regard it requires in the case of new machinery it should be installed in a small scale industr....

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....es itself or by obtaining the raw materials from those others who required the raw-materials to be converted into a finished products. 6. On the question whether the operations carried on by the assessee could be considered as manufacturing operations for the purpose of manufacture of articles, we find it difficult to accept the department's contention that the nature of operations done by the assessee does not involve any manufacturing activity. On going through the details of operations that are essential to make a rough casting into a finished casting and also after examining what has been exhibited before us of the rough casting with a rough and solid material and finished material with a smooth surface and grooves which are done accor....