The Commissioner of Income Tax – 20 v. Sudhir S. Bhatia

Mr. D.K. Kamwal for the Appellant. Mr. Trakshawala with Mr. Vishnu S. Hadade for Respondent. CORAM DATE : J.P. DEVADHAR, K.K. TATED, JJ. : 17TH AUGUST, 2011. P.C. 1 Whether the ITAT was justified in holding that the dried chalks produced by the Assessee constituted manufacture and hence eligible for deduction under section 80 IB of the Income Tax Act, 1961, is the question raised in this Appeal? 2 The ITAT in para 9 of its order has set out the process undertaken by the Assessee wherein it is stated that Premixed Plaster of Paris and Talc are 2 904 itxal 5986.10 gr .doc subjected to a process for obtaining dried chalks which is a distinct and separate marketable commodity having of its own character, use and name. In fact, the definition of the expression ‘manufacture’ inserted by clause 29BA in section 2 of the Finance (No.2) Bill Act, 2009 with retrospective effect from 01.04.2009 supports the contention of the Assessee. 3 In the present case, admittedly the product produced by the Assessee is a different marketable commodity having distinct character and use and therefore, the decision of ITAT in holding that the Assessee is engaged in the manufacture of an Article and hence eligible for section 80IB deduction cannot be faulted. 4 In the result, we see no merit in the Appeal. The Appeal is dismissed with no order as to costs. (J.P. DEVADHAR, J.)

(K.K. TATED, J.)