TaxTMI 
TaxTMI 
1997 (9) TMI 79
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.... 3. Whether the Tribunal was right in holding that the assessee is not engaged in the activity of manufacturing of any intermediary products ? 4. Whether the finding of the Tribunal that the assessee is not engaged in the manufacturing of any intermediary products is based on evidence ? 5. Whether the Tribunal was right in holding that the equipment purchased and installed during the asst. yr. 1985-86 has not been utilised for any activity of manufacturing any article or thing ? 6. Whether the finding of the Tribunal that the equipment purchased and installed during the assessment year has not been utilised for any activity of manufacturing any article or thing is based on evidence ? 7. Whether the finding of the Tribunal that the assessee is not engaged in the manufacture or processing of any intermediary products is arrived at by ignoring the relevant material on record and by relying upon extraneous of s. 32A of the Act ? 8. Whether the Tribunal is right in holding that the assessee's case is covered by the decision of the Supreme Court in CIT vs. N.C. Budharaja and Co. (1993) 114 CTR (SC) 420 : (1993) 204 ITR 412 (SC) : TC 28R.233 and as such the assessee is n....
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....sp; 21,830 --------- 3. The Tribunal went into the facts of the case and found that the assessee had not manufactured and supplied any intermediary products in the execution of civil engineering works and other works-the several activities carried on by the assessee referred to in paragraph 3 above. The assessee had executed earthwork, etc., to the tune of Rs. 3,48,30,055. The Tribunal concluded that the assessee was engaged in the execution of the civil engineering works and not manufacture of any intermediate products supplied to the principals. The assessee had also done wood work of a negligible amount of Rs. 55,625. All these works did not involve the activity of manufacturing of any article and thing. The assessee had explained to the Tribunal that the quarry equipment magazine was used for storage of explosives req....
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....rein the assessee has described its activity. It is stated by the assessee : "The assessee is an industrial company engaged in ground engineering, mining and other contract works in the field of civil engineering, including precision work of providing and fixing in position jigs, fixtures, inserts, conduit pipes, etc. in the foundation of installing structure and also providing steel railings for the structure. The assessee undertakes the aforesaid jobs and other related jobs mainly on specific items. The major items of the contract of the assessee with the Bokaro Steel Plant authorities envisage processing, manufacturing and supplying of cement concrete, reinforced cement concrete and precast reinforced cement concrete of different grades and laying the same in the foundations on which steel structures and machinery are to come up. For doing the aforesaid jobs, the assessee had to drill holes with pressure-driven pneumatic drills for charging explosives to blast in quarries and mines for obtaining stone aggregates, for crushing and grading by crushers and mix them along with other materials like quarried sand, cement and water. All the materials are weighed in accordance with t....
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....e never employed to denote the construction activity of the nature involved in the construction of a dam or for that matter a bridge, a road or a building. If the construction of a dam, a bridge or a building as a whole does not amount to manufacture or production of an article, their Lordships have observed, it is difficult to see how the laying of a foundation or foundations for such dam, bridge or building can be categorised as manufacturing or production of articles. Whatever is utilised in such activity, ultimately becomes an integral part of the dam, bridge or building. The work is done on the spot and it is a works contract. It is no different from any other works contract which is done on the spot and becomes part and parcel of a larger construction. In such matters, one has to look to the precise activity and decide whether it can be said to be meant for manufacturing or producing an article. 7. In the case of Minocha Brothers (P) Ltd. (supra), the Division Bench of the Delhi High Court has laid down the test of end product for determining the nature of the activity of the assessee. The assessee-company was engaged in building work as a contractor and in the process of ....
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....that the assessee was an industrial undertaking for the purpose of producing the article or thing for which the machinery or plant was wholly used. Reliance on the Delhi High Court's decision in the case of Univmine (P) Ltd. (supra) by the petitioner-assessee is misconceived, as in that case the assessee was carrying on the business of extracting and selling marbles and was held to be an industrial undertaking carrying on the business of production of an article. The case is distinguishable and does not apply to the case at hand. 9. In our opinion the main business of the assessee shall have to be determined. Whether it was a construction business and any step involved in that construction business was only ancillary to the construction activity of the assessee or production of any goods was itself the main business activity of the assessee ? An assessee may be engaged in the activity of building work as a contractor and in the process of completing that work some manufacture may be done at interim stages. The product of such manufacturing activity would not result in the production of goods but the product of such activity would be consumed by the assessee in its building wo....