TMI Blog1994 (12) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... the Income-tax Act, 1961, which reads as 'carbon and graphite products' ? " The assessee is a limited company carrying on the business of manufacturing carbon dioxide, soda water machines and their spare parts. The assessee claimed investment allowance under section 32A(1) of the Income-tax Act, 1961 ("the Act"), on the ground that its main business was manufacture of carbon dioxide, which came under item No. 25 of the Ninth Schedule to the Act, which reads : "Carbon and graphite products". The Income-tax Officer rejected the claim of the assessee on the ground that carbon dioxide did not come under the above item of the Ninth Schedule. The assessee appealed to the Commissioner of Income-tax (Appeals) and reiterated its claim of investme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o give an artificial and restricted meaning to the word "carbon" to mean only "pure carbon". The Tribunal, therefore, upheld the order of the Commissioner of Income-tax (Appeals) and dismissed the appeal of the Revenue. Hence, this reference under section 256(1) of the Act at the instance of the Revenue. Mr. G. S. Jetley, learned counsel for the Revenue, submits that the Income-tax Officer was justified in denying the relief under section 32A of the Act to the assessee on the ground that the product manufactured by the assessee did not fall under item No. 25 of the Ninth Schedule. According to Mr. Jetley, the said item covers only "pure carbon and products thereof". The submission of learned counsel for the assessee, Mr. P. F. Kaka, on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is defined in the Oxford English Dictionary (Second edition, Volume II) as "one of the non-metallic elements". The description of "carbon-di-oxide" as given in the same dictionary reads as follows : " b. chem., as in carbon compounds, etc., and specific names, as carbon dioxide, CO 2 systematic name of carbonic acid gas ; carbon dioxide snow, carbon dioxide solidified by cooling (cf. carbonic a.1a) ; carbon disulphide, see Disulphide, carbon monoxide, CO, a highly poisonous gas, also known as carbonic oxide gas ; etc., carbon tetrachloride, . . . " It is clear from the above definition that carbon dioxide is a form of carbon compound and is a product of carbon. That being so, it clearly falls within item No. 25 of the Ninth Schedule t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ke. It was observed that the fact that calcined petroleum coke was a different commodity and was of little consequence. Reference may also be made in this connection to the decision of the Supreme Court in State of Tamil Nadu v. Mahi Traders [1989] 73 STC 228, where it was held that the entry "hides and skins" covers all hides and skins, whether raw or dressed. In the light of the above discussion and following the ratio of the decisions of the Supreme Court referred to above, we are of the clear opinion that carbon dioxide manufactured by the assessee is nothing but a product of carbon and hence falls within item No. 25 of the Ninth Schedule to the Act. The assessee would, therefore, be entitled to investment allowance under section 32 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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