2014 (11) TMI 807

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....aking 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, by impugned judgment and order, ITAT has held th....

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....d "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 important to note that the word "new" is not used in th....