Law:

Section:

Section 80-I of the Income-tax Act, 1961 - Deductions - Profits and gains from industrial undertakings etc., after certain dates/infrastructure undertakings - Assessment years 1970-71 to 1972-73 - Assessee manufactured iron bars and rods out of ingots manufactured from scrap in its own electric furnace and billets purchased from outside - Whether assessee was entitled to relief under section 80-I on its total manufacture and relief could not be denied in respect of turnover of iron rods and bars manufactured from billets purchased from outside - Held, yes FACTS The assessee manufactured iron bars and rods out of ingots manufactured from scrap in its own electric furnace and billets purchased from outside. In its assessments, the assessee claimed relief under section 80-I, on its total manufacture. The Income-tax Officer, on the other hand, allowed relief on the proportionate turnover of iron bars and rods out of ingots manufactured by the assessee itself and not on the turnover of iron bars and rods out of billets purchased by the assessee. On revision application, the Commissioner, upheld the view taken by the Income-tax Officer. On writ : HELD (PER R.R. RASTOGI, J) It was not disputed that the assessee was a priority industry and was engaged in the manufacture or production of iron and steel. It manufactured or produced iron rods and bars from ingots, steel castings and billets. The manufacturing process involved was that the raw material consisting of ingots, steel castings or billets was cut into pieces of specified lengths on a cutting machine. The cut pieces were processed through a reheating furnace under controlled temperature for a controlled period. Thereafter, the cut pieces were processed through a rough milling plant. The final processing was made in the rods milling plant. It was correct that the ingots and steel castings were manufactured by the assessee in its own electric furnace by milling scrap iron while billets were purchased from outside. The question was whether in respect of the iron rods and bars produced or manufactured from billets purchased from outside, the relief under section 80-I could be denied. The answer to the question was in…

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