TaxTMI 
TaxTMI 
2014 (10) TMI 626
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....following substantial question of law: Whether, the Appellate Tribunal was right in law and on facts in allowing the deduction u/s 80-IA to the assessee, holding that ship breaking activity gives rise to manufacturing and production of altogether a new article or thing? 2. The assessee firm is engaged in the business of ship breaking at Alang Port. During the year under consideration, the assessee claimed deduction u/s 80-IA on the ground that ship-breaking activity is manufacturing activity. The Assessing Officer rejected the claim on the ground that ship breaking activity cannot be considered to be an industrial undertaking engaged in manufacture or production of articles or things. On appeal the CIT (Appeals) deleted the disllowance of....
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.... of articles which emerged when the ship breaking activity stood undertaken. In our view, the important test which distinguishes the word "production" from "manufacture" is that the word "production" is wider than the word "manufacture" as held in N.C. Budharaja & Co."s case. Further, it is true that in N.C. Budharaja & Co."s case, the Division Bench has used the words "new article". However, what the Division Bench meant was that a distinct article emerges when the process of ship breaking is undertaken. Further, the Legislature has used the words "manufacture" or "production". Therefore, the word "production" cannot derive its colour from the word "manufacture". Further, even according to the dictionary meaning of word "production", the w....
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..... It is submitted that in the aforesaid decision the Honble Supreme Court has held that ship breaking activity gave rise to the production of a distinct and different article and therefore the assessee is entitled to deduction under sections 80HH and 80-I of the Act. 6. Mr. Manish Bhatt, learned Senior Counsel has appeared with Ms. Mauna Bhatt, learned advocate on behalf of the Department. He is not in a position to dispute the above and is not in a position to show and/or point out any contrary decision. 7. Having heard Shri Bhatt, learned Counsel appearing on behalf of the Department and Ms. Parikh, learned advocate appearing on behalf of the assessee and the question posed for consideration by us reproduced hereinabove and considering ....