COMMISSIONER OF INCOME TAX vs KURIAN ABRAHAM

OM PRAKASH, C.J.

At the instance of the Revenue, the Tribunal referred the following questions for the opinion of this Court relevant to the asst. yr. 1980-81:

" 1. Whether, on the facts and in the circumstances of the case, the assessee is entitled to deduction of investment allowance, if the other conditions specified in s. 32A of the Act are fulfilled?

Whether, on the facts and in the circumstances of the case the activity of the type engaged by the assessee partook the nature of manufacture or production?"

The only question for consideration is whether the assessee a firm is engaged in the business of manufacture or production.

The Tribunal relying on the case of Commissioner of Income Tax Vs. Kanam Latex Industries P. Ltd., , held that the assessee-firm was engaged in the business of manufacture and production of rubber and, therefore, was entitled to investment allowance.

The standing counsel submits before us that in the statement of the case, the Tribunal wrongly stated that the assessee was selling the latex after centrifuging the same. In fact, the Tribunal did not go into the merits of the case, but it simply relied on the case of Kanam Latex Industries (P) Ltd. (supra), which was engaged in the identical activity. In Kanam Latex Industries (P) Ltd., it was clearly found by the Tribunal that the centrifuged latex was produced by subjecting normal field latex collected from rubber plantations to centrifugal forces. Since the Tribunal relied upon the decision in which the Tribunal clearly found that the assessee in that case produced centrifuged latex by subjecting normal field latex it must be held that the Tribunal adopted the same finding given by the Tribunal in Kanam Latex Industries (P) Ltd. (supra).

Relying on the aforesaid authority with which we agree, we hold that the view taken by the Tribunal is correct.

We, therefore, answer both the questions in the affirmative, that is, against the Revenue and in favour of the assessee.

OPEN