TMI Blog1982 (3) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... rendered liable to income-tax under another head. Three questions arose in the assessee's assessment. Ultimately, the Tribunal resolved all the questions in favour of the assessee. At the instance of the Commissioner, however, the Tribunal has referred the following questions of law : " 1. Whether, on the facts and in the circumstances of the case, the assessee was entitled to the deduction of the entire urban land tax paid during the relevant previous accounting year in computing the income from the property bearing No. 215, T.H. Road, irrespective of the year or years to which the payment relates ? 2. Whether, on the facts and in the circumstances of the case, the assessee-company was entitled to the deduction under section 80-I of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d tax paid during the relevant accounting year, no matter to which year it appertains, will have to come in as a proper deduction in the computation of income from house property. Following that decision, we answer the first question in favour of the assessee and against the Revenue. As regards the second question of law, we have earlier observed that the assessee is engaged in the business of manufacturing waterproof paper. The entire process of manufacture from pulp to paper is done by the assessee. The process undertaken by the assessee is not limited to, first, obtaining ordinary paper from the market and then waterproofing that paper into a finished product. The assessee relied on the nature of its manufacture and its end product, an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to be understood from the point of view of trade usage, if not common sense. In the present case, it is not in dispute that the article manufactured by the assessee is waterproof paper which goes through all the manufacturing processes in the assessee's plant right from the basic raw materials used for purposes of manufacture of any paper. As we earlier observed, the assessee is not purchasing or otherwise acquiring paper and by some process of lamination or otherwise converts it into waterproof paper. Hence, the manufacture of this variety of paper must be regarded as coming within the relevant entries in the Fifth and Sixth Schedules. We, accordingly, uphold the decision of the Tribunal and our answer to this question must, therefore, b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion without any reference to the size of the reserve which the assessee had created in its books in the relevant accounting year. The Tribunal concentrated upon the question whether the assessee was entitled to development rebate at a higher percentage, without at the same time directing its attention to the other aspect of the question, namely, the creation of the requisite reserve. It is this aspect which has been highlighted in the question of law before us in T.C. No. 758 of 1979. The point of view urged by the Department in the question is that without creating a proper reserve, which must be at least 75 per cent. of the development rebate to be granted, the assessee cannot claim any relief whatsoever. The question would possibly lead ..... X X X X Extracts X X X X X X X X Extracts X X X X
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