TMI Blog1997 (9) TMI 79X X X X Extracts X X X X X X X X Extracts X X X X ..... gaged in the activity of manufacturing of any intermediary products ? 4. Whether the finding of the Tribunal that the assessee is not engaged in the manufacturing of any intermediary products is based on evidence ? 5. Whether the Tribunal was right in holding that the equipment purchased and installed during the asst. yr. 1985-86 has not been utilised for any activity of manufacturing any article or thing ? 6. Whether the finding of the Tribunal that the equipment purchased and installed during the assessment year has not been utilised for any activity of manufacturing any article or thing is based on evidence ? 7. Whether the finding of the Tribunal that the assessee is not engaged in the manufacture or processing of any intermediary products is arrived at by ignoring the relevant material on record and by relying upon extraneous of s. 32A of the Act ? 8. Whether the Tribunal is right in holding that the assessee's case is covered by the decision of the Supreme Court in CIT vs. N.C. Budharaja and Co. (1993) 114 CTR (SC) 420 : (1993) 204 ITR 412 (SC) : TC 28R.233 and as such the assessee is not entitled to investment allowance ?" The questions as framed by the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essary to maintain the voltage of the current. The stability of power supply and voltage was required to be maintained to run the various equipment in the operations including extraction, crushing and mixing of concrete of suitable grades. Having formed an opinion that the assessee was not engaged in the manufacture of any intermediary products and the equipment was not utilised for any activity of manufacturing any article or thing, the Tribunal held that the assessee was not entitled to deduction under s. 32A of the Act. The Tribunal allowed the appeal preferred by the Revenue and disallowed the above said deduction. The assessee moved an application under s. 256(1) of the Act seeking reference to the High Court on the abovesaid questions which has been rejected by the Tribunal forming an opinion that no question of law warranting a reference to the High Court arose from the findings of fact recorded by the Tribunal. 4. Learned counsel for the petitioner -assessee has submitted that determination of the nature of activity carried on by the assessee-whether it was a manufacturing activity or not, required interpretation of the contract entered into by it with the DDA and int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed on the strength of concrete so produced. The concrete has to be processed and produced in accordance with certain grades/marks which provide the contents by weight so as to attain the proper strength. If the strength of concrete on testing falls below the mark, no payment is to be made to the assessee or remedial measures are to be carried out at the cost of the assessee." Learned counsel for the Revenue has also invited attention of the Court to extracts from the contract entered into between the assessee and the DDA (at page 46 of the paper book). It is titled as a contract for "civil engineering works in cold rolling mills of Bokaro Steel Plant". The scope of work is stated as under: The scope of contract under this work shall cover all civil engineering works (ss. I to VII as per the enclosed schedule of quantities) in respect of following units : (a) Tandem mill complex (b) Pickling line (c) H.R. Coil conveyer. It was further submitted by learned counsel for the Revenue that whatever was extracted by the assessee even by mining operations, was utilised by him in finishing the civil engineering works which the assessee was carrying on and the completed wor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of goods but they were really part of the construction work. The doors, windows and bricks were all consumed by the assessee in making the building. Their Lordships held that the assessee could not be described as a manufacturer or processor in respect of those activities. Their Lordships have during the course of judgment referred to a decision of the Bombay High Court in CIT vs. NUC Pvt. Ltd. (1980) 126 ITR 377 (Bom) : TC 24R.202 where "industrial company" was interpreted to mean that it covers only construction of ships and not construction of anything else. It was also held that the making of doors and window frames, concrete beams and slabs was a step in the construction of a building. The business could not be divided into two parts (a) making of windows and doors and (b) construction. It was accordingly held that the assessee fell outside the definition of "industrial company". It may be noted that in the course of arguments in that case, it had been argued that the percentage of profit from making windows, doors and slabs was greater than the income from the other business of construction. This contention was negatived. The Court held : "Apart from the fact that ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... producing not any goods or article but only constructing a building. The following statement of law in the case of Minocha Brothers (supra) is binding on us and we respectfully follow that the same : "........ inasmuch as the assessee is a manufacturer of buildings or constructor of buildings, an intermediary stage should not be taken to convert the assessee into a manufacturer of goods. A transitory or evanescent product like an R.C.C. block or a door is only a step towards making the whole building. It would not be reasonable to say that the assessee is a manufacturer or processor of goods as understood in common parlance, in the context of the definition of 'industrial company' given in the Finance Acts, 1969 and 1970." 10. We are, therefore, of the opinion that no referable question of law arises on the findings arrived at by the Tribunal. The answers to the questions raised are obvious and covered by the decisions of the Supreme Court and the High Court of Delhi referred to hereinabove. The Tribunal did not err in rejecting the petitioner's application under s. 256(1) of the Act. The present petition is, therefore, rejected though without any order as to the costs. - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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