TaxTMI 
TaxTMI 
1999 (2) TMI 57
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....her, on the facts and in the circumstances of the case, the assessee is entitled to investment allowance under section 32A of the Income-tax Act, 1961 ?" The relevant facts are as follows : The assessee is a closely held company deriving income from its business as tea brokers. The assessee is also a partner in two firms, namely, (1) Forbes (Tea Brokers), Coimbatore, and (2) Forbes and Company (Tea Brokers), Coonoor, which are also engaged in the business of tea auction. The assessee has a rubber mixing mill at Ettumanoor which is used for grinding, masticating and mixing rubber for others on job work basis with raw materials supplied by tyre manufacturers. The assessee claimed investment allowance under section 32A of the Income-tax Act....
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....er is a product commercially different from natural rubber. Merely because masticated rubber is used as an intermediate product in the manufacture of tyres it cannot be said that the assessee was disentitled to investment allowance under section 32A. According to the Tribunal, as far as the assessee is concerned, the masticated rubber produced by it was a final product. It was in this background, the common question referred to above, was sought to be referred before this court at the instance of the Revenue. In CIT v. Kerala Rubber and Reclaims Ltd. [1997] 228 ITR 683, a Bench of this court had occasion to consider the question whether an assessee manufacturing rubber compound for utilisation in rubber industries, is entitled to investm....
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.... statement of case on July 14, 1998. Details of the process are given as follows : "The raw materials used in the mixing of rubber in the assessee's rubber mill are the following : (i) Sheet rubber from natural rubber ; (ii) Synthetic rubber ; (iii) Carbon black ; (iv) Process oil ; (v) Chemicals-zinc oxide, stearic acid, renacit, wax. etc. The process of mastication is done in two stages. Stage I : The rubber supplied by the customers is masticated in the open mill along with renacit-chemical provided by the customer and crushed into pulp form or roller form. After cooling, this is carried for processing at second stage. Stage II : The rubber rolls obtained after first stage operations are loaded into the intermix m....
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.... operated with electric power. Cooling of the machinery is done automatically with the help of a water-pump connected to the machinery." On going through the details of the process as explained in the supplementary statement, we find that the process is the same as the one which was carried on by the assessee whose case was considered by this court in CIT v. Kerala Rubber and Reclaims Ltd. [1997] 228 ITR 683. We may also note that the case of the assessee before the assessing authority was that it was manufacturing a rubber compound and not merely masticating rubber. We are in full agreement with the view taken by the Bench in CIT v. Kerala Rubber and Reclaims Ltd. [1997] 228 ITR 683 that the rubber compound manufactured by the assessee ....