TMI Blog2004 (11) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... Civil Appeal No. 7456 of 2004: Heard learned counsel for the parties. Delay condoned. Leave granted. The following question raised at the instance of the Revenue in an appeal before the Bombay High Court was answered in favour of the assessee: "Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in holding that the assessee is entitled to deduction of investment allowance under section 32A of the Income-tax Act, 1961, in respect of machinery used in mining activity ignoring the fact that the assessee is engaged in extraction and processing of iron ore, not amounting to manufacture or production of any article or thing?" The High Court, while dismissing the appeal pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 32A(2)(b)(iii) makes it clear that investment allowance is deductible in respect of, inter alia, a plant owned by the assessee which is wholly used for the purposes of the assessee's business under section 32A(1) if the plant is installed after March 31,1976, in an industrial undertaking for the purposes of the business of construction or manufacture or production of any article or thing, except those articles or things mentioned in the Eleventh Schedule to the Act. There is no dispute that the plant in respect of which the assessee claimed deduction was owned by it and was installed after March 31, 1976, in the assessee's industrial undertaking for excavating, mining and processing mineral ore. Mineral ore is not excluded by the Eleventh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roduction" since ore is "a thing", which is the result of human activity or effort. It has also been held by this court in CIT v. N.C. Budharaja and Co. [1993] 204 ITR 412 that the word "production" is much wider than the word "manufacture". It was said: "The word 'production' has a wider connotation than the word 'manufacture'. While every manufacture can be characterised as production, every production need not amount to manufacture .... The word 'production' or 'produce' when used in juxtaposition with the word 'manufacture' takes in bringing into existence new goods by a process which may or may not amount to manufacture. It also takes in all the by-products, intermediate products and residual products which emerge in the course of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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