1998 (10) TMI 15

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..... as been referred to us for consideration : " Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in granting the benefit of section 32A on the ground that the assessee is an industrial company engaged in the production of article or things, in spite of specific prohibition under section 32A(1)(a) against the deduction in respect of the plant and machinery in .....

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..... ves complicated steps which can only be performed with speed in a computer and the end-product is the analysis and presentation of data in the desired format such as balance-sheet, it can be said in broad terms that there is production. It was pointed out by the Supreme Court in the case of CIT v. N. C. Budharaja and Co. [1993] 204 ITR 412 that the word "production" has a wider connotation than th .....

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..... ion 32A(2) therefore comprehends processing activity and the word "article" in that provision includes movables. The data processing computers involve processing and therefore capable of being regarded as part of the process or production. The balance-sheets, sales analysis, statements, etc., obtained as a result of processing are movables and are different from the data that was initially fed int .....

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..... stood. The term "industry" is a term of wide amplitude. "Industry" as used in section 32A refers to the industries which are engaged in the manufacture or production of goods or articles or things. The balance-sheets and other documents obtained as a result of the operation of the data processing system being articles which are obtained by processing, amounts to production. The data processing com .....

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..... per the requirements of the customers, processing was involved and, therefore, the data processing company is an industrial company entitled to the concessional rate of taxation under section 2(7)(c) of the Finance (No. 2) Act, 1977. The court further observed that the activities involved in a data processing company would clearly fall within the concept of goods, though not manufacture of goods. .....

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