TMI Blog2011 (4) TMI 968X X X X Extracts X X X X X X X X Extracts X X X X ..... see, appeals are dismissed - 302 to 304 and 316 and 361 of 2008 - - - Dated:- 20-4-2011 - ADARSH KUMAR GOEL, AJAY KUMAR MITTAL, JJ. JUDGMENT Ajay Kumar Mittal J.- 1. This order shall dispose of I. T. A. Nos. 302, 303, 304, 316 and 361 of 2008 as according to learned counsel for the parties, common questions of law and facts are involved therein. For brevity, the facts are being taken from I. T. A. No. 302 of 2008. 2. This appeal has been filed by the Revenue under section 260A of the Income-tax Act, 1961 (in short "the Act"), against the order dated August 10, 2007, passed by the Income-tax Appellate Tribunal, Chandigarh Bench "A", Chandigarh (hereinafter referred to as "the Tribunal"), in I. T. A. No. 368/Chandi/03, relating to the assessment year 2000-01. 3. The appeal was admitted by this court, vide order dated September 18, 2008, for determination of the following substantial question of law : "Whether, in the facts and circumstances of the case, the Income-tax Appellate Tribunal was right in holding that the activity of the assessee of manufacturing of identity cards amounts to 'manufacture' and the undertaking of the assessee is an 'industr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of an industrial undertaking. The assessee is required to fulfil all the conditions enumerated in sub-section (2) to be eligible for deduction under section 80-IA of the Act. However, sub-clause (iii) thereof provides that the article or thing manufactured or produced by the assessee should not fall in the Eleventh Schedule to the Act. The relevant portion thereof reads thus : "it manufactures or produces any article or thing, not being any article or thing specified in the list in the Eleventh Schedule, or operates one or more cold storage plant or plants, in any part of India : Provided that the condition in this clause shall, in relation to a small scale industrial undertaking or an industrial undertaking referred to in sub-clause (b) of clause (iv) which begins to manufacture or produce an article or thing during the period beginning on the 1st day of April, 1993, and ending on the 31st day of March, 2000, apply as if the words 'not being any article or thing specified in the list in the Eleventh Schedule' had been omitted." 8. In order to adjudicate the issue relating to the assessee being an "industrial undertaking" or not and whether it carries on any manufactu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s." 11. Applying the aforesaid tests, it was concluded by the apex court as under (page 87) : "we are of the view that blocks converted into polished slabs and tiles after undergoing the process indicated above certainly result in emergence of a new and distinct commodity. The original block does not remain the marble block, it becomes a slab or tile. In the circumstances, not only is there manufacture but also an activity which is something beyond manufacture and which brings a new product into existence and, therefore, on the facts of these cases, we are of the view that the High Court was right in coming to the conclusion that the activity undertaken by the respondents-assessees did constitute manufacture or production in terms of section 80-IA of the Income-tax Act, 1961." 12. It would be appropriate to examine the facts of the present case in the light of the settled legal enunciation noticed hereinabove. The assessee for preparation of photo identity cards has to process the data, print the same on the cards, put hologram containing the State emblem, take photograph of the voter, match the photo with the voter's data, affix the same on the cards and laminate t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facture' or 'production' of any article or thing. It was argued that the assessee was engaged in banking business and could not be construed as an 'industrial undertaking'. In this context, the hon'ble High Court noted that the computers were used to process the customer's data and the out-put which resulted from the computers consisted of management reports. That even a bank would constitute an 'industrial undertaking' in the sense that although it was rendering services, still in the course of its business, it produces articles and things. It was, therefore, concluded that the conditions of section 32A(2)(b)(iii) are satisfied. The hon'ble High Court specifically noted that the nature of service rendered by the bank to its customers involved the work of data processing and on the basis of such processing, information was provided to the customers.13. In our view, the parity of reasoning weighing with the hon'ble Bombay High Court in the case of Emirates Commercial Bank Ltd. [2003] 262 ITR 55 (Bom) clearly applies in the instant case for the purposes of construing the eligibility of the assessee's industrial under-taking for the purposes of benefits under section 80-IA of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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