TMI Blog1985 (4) TMI 100X X X X Extracts X X X X X X X X Extracts X X X X ..... sment year 1980-81 and, therefore, the order passed by the ITO to that effect was erroneous insofar as it was prejudicial to the interest of the revenue. He took action under section 263 of the Act and issued a show-cause notice to the assessee. The assessee pleaded before the Commissioner that the investment allowance under section 32A was rightly allowed to the assessee. A written submission was made by the assessee. It was indicated before the Commissioner that the assessee had been treated as a small-scale industries unit for which it registered with the Directorate of Cottage and Small-scale Industries, the Government of West Bengal. It was indicated that if the provisions of section 32A are considered along with the operation of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acture involved with raw materials coming in for processing or manufacturing, and finished goods coming out. What has to be borne in mind is the concept of 'manufacture', which is a process resulting in any alteration or change of the goods subjected to such manufacture. In this case, there is no such processing involved, which alone would entitle the assessee to the granting of investment allowance under section 32A of the Income-tax Act, 1961 and, in the circumstances, I hold that the assessee-firm's claim for investment allowance on the assets in question should not be considered at the time of making the income-tax assessment. This is, therefore, a case where the original assessment, wherein investment allowance under section 32A of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the operation and working of the machine, the assessee is not manufacturing any article within the meaning of section 32A and, therefore, the order passed by the ITO on this issue is erroneous and prejudicial to the interest of the revenue. 4. The assessee during the year under appeal has purchased a machine which is known as 'Durst Machine' manufactured by Durst (UK) Ltd. The machine is used like mini laboratory. The machine accepts negatives, cuts paper into different sizes and after applying chemical and other things, delivers 960 pieces of a particular size in an hour. It prints in colourful design from the negative. The assessee has filed a sample of printing on the machine along with the negative and the paper. However, the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sts wholly of 'manufacture of goods' within the meaning of clause (ii) of Explanation 2 to section 23A of the Indian Income-tax Act, 1922. The word 'manufacture' appearing in section 32A has not been defined in a different mariner. Therefore, the meaning of the words 'manufacture of any article or thing' will be given the natural meaning. If the printing of the balance sheet, profit and loss account, dividend warrants, etc., could be taken as the business of manufacture of an article or thing, the printing done by the assessee with the machine is definitely an act of manufacture of an article. Therefore, the ITO was right in allowing the investment allowance to the assessee. The order passed by the ITO on this issue could not be taken as er ..... X X X X Extracts X X X X X X X X Extracts X X X X
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