TMI Blog1990 (7) TMI 177X X X X Extracts X X X X X X X X Extracts X X X X ..... al undertaking ' for the purpose of sections 32A and 80J of the Income-tax Act, 1961. 2. The assessee is a registered firm. The business of the assessee was to purchase unbleached grey cloth and after bleaching it, subject it to the process of calendering, dyeing and printing so as to produce the finished product which was printed cloth. For the assessment year 1981-82, corresponding to the previous year ended 31-3-1981, the assessee filed a return on 30-11-1981 showing a loss of Rs. 10,95,090 and later a revised return on 8-2-1982 showing loss of Rs. 11,83,000. The Income-tax Officer made a draft assessment proposing a variation exceeding Rs. 1,00,000 and forwarded it to the Inspecting Assistant Commissioner of Income-tax under section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evenue that a Bench of this tribunal by order dated 23-3-1987 in the case of United Bleachers Ltd. [IT Appeal Nos. 2948 (Mad.) of 1984 and 1799 (Mad.) of 1985] for the assessment years 1981-82 and 1980-81 had distinguished the decision of the Supreme Court in the case of Empire Industries Ltd. v. Union of India [1986] 162 ITR 846 and had followed the decision of the Madras High Court in the cases of CIT v. S.S.M. Sizing Centre [1985] 155 ITR 782/20 Taxman 248 (Mad.), CIT v. S.S.M. Finishing Centre [1985] 155 ITR 791 and CIT v. Veena Textiles (P.) Ltd. [1985] 155 ITR 794 to hold that operations carried on like warping, sizing, bleaching, dyeing etc., did not result in manufacture or production of any article. Reliance was also placed on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st, it was pointed out that the present provision with which we are concerned is section 23A(2)(b)(iii), which refers to an industrial undertaking for the purposes of business of construction, manufacture or production of any article or thing, not being an article or thing specified in the list in the Eleventh Schedule, which is of very wide import and not limited to production of textiles. 7. According to the assessee, the second assumption in the order of the Tribunal was that the decision of the Supreme-Court in the case of Empire Industries Ltd. was concerned with a special definition in the Central Excise Act which could not be applied to the provisions of the Income-tax Act. It was pointed out that the question actually arose in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so as to deny the deductions granted for the earlier year. That being the position, we are normally bound to follow the order of the Tribunal for the earlier year in the assessee's own case. [See CIT v. L. G. Ramamurthi [1977] 1 10 ITR 453 (Mad.)]. 9. Secondly, we are of the view that the question whether the assessee's business of bleaching, dyeing and printing of unbleached grey cloth resulted in the manufacture or production of an article is concluded by the decision of the Supreme Court in the case of Empire Industries Ltd. The Supreme Court observed even with reference to the amendment in the Central Excise Act that " processes of the type which have been incorporated by the impugned Act were not so alien or foreign to the concept o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Union of India [1987] 167 ITR 904 at 908 to a larger Bench of five Judges. 11. We also note that section 80J also refers only to industrial undertaking which manufactures or produces articles and, therefore, attracts the same acceptation. Thus the Gujarat High Court in the case of CIT v. J.B. Kharwar Sons [1987] 163 ITR 394 following the decision of the Supreme Court in the case of Empire Industries Ltd. held that relief u/s 80J is available to an industrial undertaking engaged in bleaching, dyeing and printing of cloth. 12. The Revenue had placed considerable reliance on the three decisions of the Madras High Court in 155 ITR, which had been pressed into service on behalf of the Revenue in the case of Unitted Bleachers Ltd. The ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion, we consider that the decision in this very case taken in ITA Nos. 260 261/Mds/84 for the assessment years 1979-80 and 1980-81 which is in conformity with the law laid down by the Supreme Court in Ujagar Prints, has necessarily to be followed, even after de novo consideration on merits, in preference to the decision of the Tribunal in the case of United Bleachers Ltd. 15. There is another ground of appeal relating to the addition of Rs. 46,643 made towards unexplained investment. The Assistant Commissioner in his directions u/s 144B noted that the assessee had constructed an embroidery unit at a cost of Rs. 6,51,357 but the Departmental Valuation Officer had estimated the cost of construction at Rs. 6,98,000 so that the difference ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
