TMI Blog1998 (2) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... g wrong, unreasonable and unsupported by materials ? 2. Whether, on the facts and in the circumstances of the case, (a) (i) did the Tribunal find that the assessee is manufacturing or producing an article or thing ? (ii) (if found) is not the finding of manufacture or production of article or thing wrong, unreasonable, unsupported by materials and based on a wrong interpretation of relevant provisions ? (b) should not the Tribunal have considered and found the asses see to have manufactured or produced an article or thing to be entitled to claim the benefit of section 32A(2)(b)(iii) of the Income-tax Act ? (c) in the absence of a necessary finding of 'construction' or 'manufacture' or 'production' of article or thing, the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Courts, held that the data processing machines owned by the assessee are not office appliances and the assessee is entitled to investment allowance under 32A and deduction under section 80J of the Act. Aggrieved, the Revenue appealed to the Income-tax Appellate Tribunal. Before the Appellate Tribunal, the representative of the assessee submitted that the assessee rendered services of development or manufacture of software or programmes and also processed the data for various customers like the Federal Bank Limited, the South Indian Bank Limited, the erstwhile Bank of Cochin Limited, etc., and that presently doing the same work for State Bank of India, Federal Bank Ltd., etc., and, therefore, the assessee is entitled to investment allow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [1985] 155 ITR 166 (Kar) ; Union of India v. Delhi Cloth and General Mills Co. Ltd., AIR 1963 SC 791 and Narne Tulaman Manufacturers Pvt. Ltd. v. Collector of Central Excise [1990] 183 ITR 577 (SC), held that the computations and statements that a computer brings out after processing technical and commercial data which are fed into the computer as inputs are entirely different in content from the inputs fed into the computer and, therefore, the assessee-company is an industrial undertaking. The nature of the activity carried on by the assessee-company being identical to that carried on by Shaw Wallace and Co. Ltd. we quite agree with the view taken by the Calcutta High Court in Shaw Wallace and Co. Ltd. [1993] 201 ITR 17, that after process ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee would have fallen under the exclusionary clause. The Assessing Officer held that the computer itself is an office appliance. The Bombay High Court in CIT v. International Computers Ltd. [1981] 131 ITR 1 and CIT v. IMB World Trade Corporation [1986] 161 ITR 673 (Bom), held that data processing machines are not office appliances and are entitled to development rebate under section 33 of the Act. To our mind, the question is not whether the computer owned by the assessee-company is an office appliance, but the question for consideration is whether the assessee-company is engaged in the manufacture of an item, excluded under sub-section (2)(b)(iii) of section 32A of the Act, read with the Explanation to item 22 in the list in the Elev ..... X X X X Extracts X X X X X X X X Extracts X X X X
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