TMI Blog1999 (6) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... Court under s. 256(1) of the IT Act, 1961 ('the Act') : " 1. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that crushing barytes into powder is a manufacturing activity/production of article for the purpose of deduction under s. 80HH and 80-I of the IT Act, 1961? 2. Whether, on the facts and in the circumstances of the case, the Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under s. 80HH or s. 80-I ?" 2. The facts in brief are as follows : The assessee was having three units and there was one P L A/c and one balance sheet. The ITO felt that for the purpose of claiming deduction under ss. 80HH and 80-I of the Act there should be separate P L A/c and balance sheets in respect of each unit. Therefore, he disallowed the deduction under ss. 80HH and 80-I claimed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so held that if the units set up in backward area qualify for deduction in respect of the other conditions prescribed in s. 80HH or s. 80-I, the difficulty of apportioning the profits and gains from such undertakings should not be viewed as a disqualification. In other words, the Tribunal held that irrespective of the fact that there is no division of accounts, still they are entitled for the bene ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1970, (ii) it is not formed by the splitting up, or the reconstruction, of a business already in existence in any backward area, (iii) it is not formed by the transfer to a new business of machinery and (iv) it employs ten or more workers in the manufacturing process. 5. The proviso to sub-s. 6 of s. 80HH itself provides that if in the opinion of the AO, the computation of the profits and gains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to powder by using power and the powder is a distinct separate article from barytes and the use of barytes powder is in the manufacturing of paints while the barytes are used in a different form for different purposes. Further, the barytes powder is marketed as such. Therefore, barytes are distinct not only in form and name but also in use from barytes powder and barytes powder is distinct and sep ..... X X X X Extracts X X X X X X X X Extracts X X X X
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