2014 (11) TMI 807

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....t the assessee which is engaged in ship breaking business is entitled for grant of deduction under section 80HHA and 80I considering the same as manufacturing activitiy?" 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 the Assessing Officer and allowed the reference. 3. On appeal before the ITAT by the revenue, b....

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.... 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 word "produce" is defined as something which is brought forth or yielded either naturally or as a result of effort and work. It is im....

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.... the aforesaid decision the Hon'ble 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. Mr. Manish Bhatt, learned Senior Counsel has appeared with 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. 6. Having heard Shri Bhatt, learned Counsel appearing on behalf of the revenue and the question posed for consideration by us reproduced hereinabove and considering the decision of the Honble the Supreme Court in the case of Vijay Ship Breaking Corporation and Others (Supra), the....