2004 (6) TMI 24

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....g granite from quarries and exporting them after cutting, polishing, etc., which tantamount to manufacture for the purpose of section 32A of the Income-tax Act, 1961?" The assessments of the assessee for the two years in question were completed by the Assessing Officer allowing the claim of the assessee with regard to investment allowance under section 32A of the Income-tax Act, 1961 (hereinafter referred to as "the Act"). The Commissioner of Income-tax, exercising the power of revision under section 263 of the Income-tax Act, passed a consolidated order dated March 14, 1990, holding that the assessee would not be entitled to investment allowance inasmuch as there was no manufacturing activity and the Deputy Commissioner of Income-tax wa....

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....T v. Vijay Granites P. Ltd. [2004] 267 ITR 606 wherein this court has held that cutting and polishing of granite would not amount to production or manufacture of article and the assessee is not entitled to investment allowance in respect of the machinery used. Learned counsel for the Revenue therefore submitted that in view of the decisions of this court rendered in CIT v. Bishal Enterprises [2001] 247 ITR 484 and CIT v. Vijay Granites P. Ltd. [2004] 267 ITR 606 the stated supra, the assessee is not entitled to claim investment allowance and the view of the Tribunal that the assessee is entitled to claim investment allowance is not sustainable in law. Learned counsel for the assessee on the other hand submitted that neither the Commissio....

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....vities of the assessee. The Income-tax Appellate Tribunal has, merely following the assessee's own case in respect of the earlier assessment year, allowed the claim of investment allowance. It has not considered the specific point raised by the assessee and has not gone into the nature of the activities of the assessee. In the absence of any factual finding on the question, viz., the activities of the assessee, we are of the view that the question referred to us cannot be answered. But we make it clear that if the assessee's activity was merely cutting and polishing of granite, it would not amount to manufacture or production of article and the assessee would not be entitled to claim investment allowance under section 32A of the Income-tax ....