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JUDGMENT R.N. Misra, J.-The Income-tax Appellate Tribunal, Cuttack Bench, has stated these cases as directed by this court on the applications of the revenue under s. 256(2) of the Income-tax Act, 1961 (hereafter referred to as "the Act") and has referred the following common question for opinion of the court: "Whether, on the facts found by the Appellate Tribunal, the assessee is entitled to the benefit provided under section 80HH of the Income-tax Act, 1961?" The relevant assessment years are 1974-75 and 1975-76. S.J.C. Nos. 97 and 98 of 1975 relate to one registered firm which had undertaken construction of a minor irrigation project in the district of Dhankanal. The first reference is with respect to the assessment year 1974-75 and the other for the subsequent assessment year. S.J.C. No. 99 of 1978 relates to assessment year 1975-76 and the assessee therein, another registered firm, undertook erection of the Sundar Irrigation Project. According to the assertion of the revenue, the firms had come into existence for execution of the particular works and were to stand dissolved when the works were over. The ITO while assessing the firms conceded relief under s. 80HH of the Act to both the assessees. The CIT in exercise of powers under s. 263 of the Act came to hold: "The concession provided u/s. 80HH is available to an industrial undertaking which manufactures or produces articles,, It would thus appear that to constitute manufacture or produce articles it is necessary that the material subjected to manufacture should be changed or modified and something tangible should come out as a result of manufacturing process to make it capable of being sold,,. In short the firm cannot be held as an industrial undertaking merely because it has to undertake certain manufacturing process in the course of construction of the irrigation project." and directed the ITO to withdraw the relief and modify the assessments of the firms as also the partners. The assessees appealed to the Appellate Tribunal. The Tribunal found : "The assessee before us is engaged in the construction of a dam which is an irrigation project of considerable magnitude. It employed considerable labour,…

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