1990 (1) TMI 100

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....to urge that the CIT(A) erred in his decision on the ground that the said judgment was not accepted by the department and the activity of the assessee only amounted to processing and not manufacturing. 2. The assessee is a registered firm. The original assessment for the assessment year 1980-81 was made on 16-2-1983 but it was set aside by the CIT in his revisional order with direction to consider and give clear finding as to whether the assessee was entitled to relief u/s. 80HH in accordance with the provisions of law. The ITO made consequential order. He noticed that the assessee had obtained contract from M/s. Hindustan Copper Ltd. for designing, fabricating, installation and supply of cyclone system. After referring to various authorit....

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....ed to the relief allowed by the CIT(A). 6. We have duly considered the rival submissions. At the outset, we have to point out that section 80HH requires that there should be profits and gains derived from an "industrial undertaking" or business of a hotel. Therefore, the criterion is whether the undertaking of the assessee amounted to industrial undertaking or not. The decisions cited by the learned departmental representative are not apt to the case before us, because the decision of the Bombay High Courtin the case of N.U.C.(P) Ltd. turned on the definition of "industrial company" as given in section 2(7)(d) of the Finance Act, 1966 and which definition was not applicable to the case of a company other than that engaged in construction o....

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....oulders into stones and so on, such processing activity was incidental or subsidiary to the main activity of construction. The requirement of section 80HH is manufacture or production of articles. The contention of the learned counsel for the assessee, at the time of hearing, was that the assessee did produce articles which were different from the components assembled and in view of the categorical decision of the Bombay High Court in the case of Tata Locomotive & Engg. Co. Ltd., it was not necessary that the materials with which a commodity is manufactured should lose their identity. In fact, the definition of the word "manufacture" laid down by the Bombay High Court would apply with all force to the case of the assessee. The order of the ....