TMI Blog1986 (8) TMI 96X X X X Extracts X X X X X X X X Extracts X X X X ..... salary, property and other sources. 3. The assessee filed the return of income and made claims, inter alia, for the investment allowance, which was disallowed by the ITO on the ground that the assessee is not manufacturing unit. 4. In appeal, the AAC allowed the claim of the assessee for the reasons mentioned in para No. 3 of his order. 5. The revenue being further aggrieved has preferred this appeal. Shri Suman, the learned departmental representative contends that on the facts and in the circumstances of the case, the learned AAC has erred in directing the ITO to allow investment allowance on the cost of the new machinery purchased by the assessee, disallowed by the ITO on the ground that unit of the assessee is not a manufacturing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this case, there is no finding of the ITO that the assessee is an industrial undertaking or small scale industrial undertaking, but he has held that the assessee is not a manufacturing unit. The assessee's counsel contends that when the ITO has not held that the assessee is neither industrial undertaking nor small scale industrial undertaking, then this question cannot be raised at the level of the Tribunal and, therefore, the Tribunal is to take that the assessee is an industrial undertaking or small scale industrial undertaking. This contention of the assessee is without substance in view of the fact that it is for the assessee to satisfy the conditions laid down in section 32A(2)(b)(ii) and (iii) read with Explanation 2 says as under : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t investment allowance can be claimed by the assessee, which is an industrial undertaking or small scale industrial undertaking, which manufactures or produces article or thing. Therefore, onus is upon the assessee to prove itself as an industrial undertaking or small scale industrial undertaking and, thereafter to prove that it manufactures or produces article or thing. In this case, the assessee has not shown and proved itself either an industrial undertaking or small scale industrial undertaking. 9. Assuming that it is not in dispute and the dispute is that the assessee is not a manufacturing unit, therefore, we have to decide that whether printing of cloth is manufacturing or producing an article or thing. 10. In the case of Niemla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the case mentioned above is not applicable to the facts of this case. 11. In the case of Kanakadhara Industries, the Tribunal held as under : "Since the assessee-firm was ginning cotton for its customers, there is no question of its manufacturing or producing the articles as required by section 80J(4)(iv). For the purpose of this section, the assessee should be the owner of the machinery and plant, the owner of raw material used in the manufacture or production of articles, and should also deal in such articles. If any of these requirements is missing there is no manufacture or production as required by this provision. The words 'manufacture' and 'production' are not synonymous to each other. 'To manufacture' is to bring into being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gar Mills Ltd. v. Union of India AIR 1968 SC 922, their Lordships of the Hon'ble Supreme Court held that 'manufacture' implies a change, but every change in the raw material is not manufacture. There must be such transformation that a new and different article must emerge, having a distinctive name, character or use. 13. In the case of CST v. Dr. Sukh Deo AIR 1969 SC 499, their Lordships held that the word 'manufacture' in ordinary acceptation has a wide connotation, it means making of articles or material commercially different from the basic components by physical labour or mechanical process. Even in the case of State of Punjab v. Chandu Lal Kishori Lal AIR 1969 SC 1073, which is under the Sales Tax Act, 1958, on the issue of ginning c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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