TMI Blog1999 (1) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... reasonable ? (ii) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the assessee was entitled to the claim of investment allowance and deduction under section 80-I ?" 'The Assessing Officer found that the assessee is mainly engaged in masticatioin of rubber. The assessee claimed deduction under section 80-1 of the Income-tax Act, 1961, (the "Act"), in respect of mastication charges collected from others. The Assessing Officer took the view that the assessee is not engaged in any manufacturing activity and, therefore, is not entitled to any deduction under section 80-I. In appeal the Commissioner of Income-tax (Appeals) accepted the contention of the assessee and allowed deduction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the assessee, the Tribunal relied on the decision of the Madras High Court in Madras Rubber Factory Ltd.'s case [1984] 149 ITR 405. We have carefully gone through the said decision. In that case, the question whether masticating process amounted to manufacture was not canvassed. The Madras High Court in Madras Rubber Factory Ltd. [1984] 149 ITR 405 found as follows : "Coming to the second question, it is seen that the assessee was previously procuring masticated rubber, which is a raw material for the manufacture of automobile tyres and tubes, from others without itself undertaking the process of masticating rubber in its factory at Thiruvottiyur. Subsequently, in the year 1969, the assessee started a new and separate venture for ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g entitling the assessee to investment allowance under section 80-I of the Act. The submission of counsel for the assessee before us is that the assessee is not engaged only in the manufacture of masticated rubber simpliciter, but by resorting to the masticating process, several compounds are added and by virtue of that entirely a new end-product, that is, entirely a different item in commercial parlance, is produced. No clear finding has been recorded by the Appellate Tribunal as to what compounds are added by the assessee in the masticating process and what is precisely the end-product of the assessee. The Tribunal should have recorded a clear finding on both the counts. We, therefore, without answering the questions, remit the matter t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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