1985 (10) TMI 123

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....ile the Commissioner (Appeals) held in favour of the assessee. 3. We have heard the learned departmental representative and also the learned counsel for the assessee. The learned departmental representative placed reliance on the order of the Full Bench in the case of ITO v. Hydle Constructions (P.) Ltd. [1983] 6 ITD 575 (Delhi) for the proposition that the assessee was not entitled to deduction under section 80HH, because the end product of the assessee being a dam cannot be considered to be an article within the meaning of section 80HH(2)(i). The learned counsel for the assessee did not dispute that the Full Bench order did cover the point at issue but his contention was that we should follow the decision of the Bombay High Court in CI....

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....e project, it could not be said to have begun to produce or manufacture articles within the meaning of section 84 of the Act. On the face of it, there is really no conflict between the rulings of the Bombay and Gujarat High Courts, though on p. 554 the Bombay High Court appears to have held that when the assessee starts manufacturing articles which are capable of being used by it for manufacture or production of the finished goods, which are ultimately sold by the company, it can be said to have started the manufacture or production of goods. 6. In our opinion, the difference between the two rulings has really no bearing on the point at issue that arises in this appeal before us. The Bombay High Court ruling in Shah Construction Co. Ltd.....

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.... been declared as an industrial company entitled to rebate because if its main business fell within the definition of 'industrial company' then it would amount to its being wholly or mainly engaged in the manufacture or processing of goods, but the High Court did not hold it to be so. Therefore, the contention of the learned counsel for the assessee is of no avail. The ruling of the Full Bench in the case of Hydle Constructions (P.) Ltd. is clearly applicable. It is true that the ruling of the Orissa High Court in the case of CIT v. N.C. Budharaja & Co. [1980] 121 ITR 212 is directly on the point at issue, i.e., under section 80HH, but in view of the later decision of the Bombay High Court in Shah Construction Co. Ltd.'s case and also the d....