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Section 84(2)(iii) [now section 80j(4)(iii)] of the Income-tax Act, 1961-Deductions-Profits and gains from newly established industrial undertakings-Assessment year 1965-66-Whether business of galvanising-Metal on behalf of customers was an industrial undertaking engaged in manufacture and production of articles entitling assessee to relief under section 84-Held, no Facts The assessee-company carried on the business of manufacture and sale of metal and also undertook galvanising work of outsiders. The ITO rejected its claim for exemption under section 84 on the ground that the business of galvanising metal for outsiders did not involve manufacture or production of any article as contemplated under section 84(2)(iii). On appeal, the AAC sustained the ITO's order. The Tribunal, on second appeal, accepted the assessee's claim and reversed the AAC's order. On reference :/ Held What section 84(2 )(iii) requires is that the article should be manufactured or produced. The words "manufacture" and "produce" apply to the bringing into existence of something which is different from its components. Applying this test, the questions in the instant case would be whether the process of galvanising brought into existence an article known commonly as differently before galvanisation. Galvanisation is the act or process of galvanising or coating iron or protect it from rust. This does not bring into existence a different article or an article commonly known differently before it was galvanised. Therefore, the process of galvanising did not result in the manufacture or production of new goods as such and the assessee was not entitled to deduction under section 84( 2)(iii) . Case review CIT v. Tata Locomotive & Engineering Co. Ltd. [1968] 68 ITR 325 (Bom.) and CIT v. Radha Nagar Cold Storage (P.) Ltd.[1980] 126 ITR 66 (Cal.) followed. Cases referred to CIT v. Tata Locomotive & Engineering Co. Ltd. [1968] 68 ITR 325 (Bom.), CIT v. Ajay Printery (P.) Ltd. [1965] 58 ITR 811 (Guj.) and CIT v. Radha Nagar Cold Storage (P.) Ltd. [1980] 126 ITR 66 (Cal.). JUDGMENT Sabyasachi Mukharji, J. - In this case under section 256(1) of the Income-tax Act, 1961, the following question has…

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