TMI Blog1984 (1) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... carried on the cloth purchased by the assessee, the ITO was of the view that these operations did not amount to " manufacture or production of textiles ". The assessee's claim for development rebate at the special rate of 35% was thus negatived. Aggrieved by this, the assessee preferred an appeal and the AAC found that though no " textiles " as such were either " manufactured or produced ", the operations carried on by the assessee had the only effect of making the material more presentable and neater and, in that view, the assessee was held not entitled to claim higher development rebate at 35%. On further appeal by the assessee to the Tribunal, the Tribunal relied upon the dictionary meaning of the word "textiles" as comprehending and inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... factured by others by bleaching, dyeing, centering and printing the cloth. The basic quality of the commodity as cloth had remained the same both at the time of its purchase by the assessee and even after the carrying on by the assessee of the operations referred to above. The assessee started with cloth purchased from outside and ended up with cloth even after performance of the operations. In other words, the end product in this case is not any different from the feed-in-material. It is the manufacture or production or bringing into existence of textile material or cloth or fabric that is contemplated under s. 33(1)(b)(B)(i) of the I.T. Act, 1961, read with item 32 of Schedule V and this would include dyed clothing materials, printed clot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en s. 109(i)(a) and the provision extracted above would also appear to indicate that a mere processing of articles was not in the contemplation of s. 33(1)(b)(B)(i), but the bringing into being or existence of one or more of the articles or things specified in the Fifth Schedule. We are, therefore, of the view that having regard to the nature of the operations carried on by the, assessee in this case on the cloth manufactured by others but purchased by it and the resulting product even after carrying on of the operations not being new or distinct or different commodity from the feed-in-material but remaining the same as before, the assessee cannot claim that it is engaged in the business of " manufacture or production " of textiles within t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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