2005 (5) TMI 18

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.... to deduction under sections 80HH and 80-I in respect of that activity as well?" The brief facts of the case are that the assessee-respondent (hereinafter referred to as "the assessee") firm derived income from the business of extraction of oil from oil seeds and partly of refining oil from oil purchased from the local market. The assessee filed its return of income for the assessment year 1987-88 declaring income of Rs. 4,67,870 and has claimed deduction under sections 80HH and 80-I of the. Act. The assessing authority made an assessment under section 143(3) of the Act on an income of Rs. 5,32,710. The assessing authority has limited the deduction under sections 80HH and 80-I of the Act to the activities of extraction of oil from oil seed....

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....e Act read as follows: "80HH.(1) Where the gross total income of an assessee includes any profits and gains derived from an industrial undertaking, or the business of a hotel, to which this section applies, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction from such profits and gains of an amount equal to twenty per cent. thereof. (2) This section applies to any industrial undertaking which fulfils all the following conditions, namely: (i) it has begun or begins to manufacture or produce articles after the 31st day of December, 1970, but before the 1st day of April, 1990, in any backward area...." "80-I.(1) Where the gross total income of....

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....one case the processing may be slight and in another it may be extensive; but in each process suffered, the commodity would experience a change. This court further observed that whatever be the means employed for carrying out the processing operation, it is the effect of the operation on the commodity that is material for the purpose of determining whether the operation constitutes processing. Viewed in the context of the above meaning given to the word 'processing' by this court there cannot be any manner of doubt that the nature and extent of the process to which the crude oil is subjected to make it refined oil brings the latter within the meaning of the expression 'goods manufactured' in section 3(3)(b)(iii) of the Act so as to make the....