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TMI Blog1996 (1) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... RA BABU J.--Two questions have been referred for our opinion in this reference arising under section 256(1) of the Income-tax Act, 1961, and the said questions are as follows : " (1) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in holding that the guarantee commission paid by the assessee is an admissible revenue expenditure ? (2) Whether, on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k the view that the assessee is engaged in mining operations and when iron ore is excavated, there is no manufacture involving production of any article or thing. However, on appeal to the first appellate authority, he took the view that production of iron ore is to be considered as manufacturing activity and upheld the claim of the assessee under section 32A of the Act. On further appeal by the D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of section 2(7)(c) of the Finance (No, 2) Act, 1977. In an earlier case in Hind Nippon Rural Industries Pvt. Ltd. (No. 1) v. CIT [1993] 201 ITR 581, this court took the view that if the assessee purchases granite blocks made to specifications stated by the assessee and granite blocks are brought into existence by employing a contractor and no quarrying was done by the assessee, it was held that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same article. In that context, it was observed that there was no manufacturing activity. In the present case, what we are concerned with is a mining operation carried on for excavating iron ore and sequestering the same from other material which involves a very big process and there is complete transformation of the material from one form to another altogether and does not continue to be in the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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