1986 (7) TMI 47

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....used in scientific research are also entitled to depreciation under section 32 of the Income-tax Act, 1961, even though 100% of the capital expenditure was allowed as deduction under section 35 of the Income-tax Act, 1961 ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal in holding that the assessee was entitled to development rebate at the higher rate envisaged in section 33 read with item 18 of the Fifth Schedule to the Income-tax Act, 1961, had relied on irrelevant materials and/or otherwise misdirected itself in arriving at the above finding ? 3. Whether on a proper interpretation of section 80J of the Incometax Act, 1961, read with rule 19A of the Income-tax Rules, 1962, the Tribunal was correct in hol....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....based its claim reads as follows: " Petrochemicals including corresponding products manufactured from other basic raw materials like calcium carbide, ethyl alcohol or hydrocarbons from other sources." The Income-tax Officer after considering technical text books and treatises found and held that the raw material from which the assessee produced Polythene, namely, ethyl alcohol, was a petrochemical but the end product, namely, polythene, was not a chemical. He held that the term It petrochemical " implied that it must be a chemical as known in the market and polythene was not understood as such and, therefore, was not a petrochemical. He found that these were all end products and were not covered by item 18 of the Fifth Schedule to the....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....tted that item 18 of the Fifth Schedule to the Act was wide enough to cover polythene and other products manufactured by the assessee. In support of his contentions, the learned advocate for the assessee drew our attention to two decisions of the Supreme Court, namely, CIT v. Nilon Synthetic Fibres and Chemicals Ltd. [1981] 130 ITR 14 and J. K. Synthetics Ltd. v. CIT [1981] 130 ITR 23. The Supreme Court accepted, in the first case, the finding of the Tribunal that Nylon-6 yarn manufactured by the assessee in that case from imported raw material was a petrochemical and that the Tribunal in finding the product to be such had not misapplied any rule of law and had not ignored any material evidence. It was held that it could not be said that....