Law:

Section:

Section 80-I of the Income-tax Act, 1961 - Deductions - Profits and gains from industrial undertakings, etc., after certain dates - Assessment year 1971-72 and 1972-73 - Heavy duty cranes manufactured by assessee-company for various clients who were manufacturers or users of sugar, chemical, textile or cement machinery or other machinery of industries under item No. 8A of First Schedule to Industries (Development and Regulation) Act, 1951 - Whether on facts, it may held that assessee-company's activity of manufacture of heavy duty cranes was priority industry within Sixth Schedule to Act, entitling it to deduction under section 80-I - Held, yes FACTS The assessee-company carried on the business, inter alia, of manufacture and sale of heavy duty cranes. It claimed relief under section 80-I in respect of profits arising, inter alia, from its manufacturing activity of making heavy duty cranes. For the assessment years in question the claim of the assessee for relief under section 80-I was disallowed by the ITO. On appeal, the AAC confirmed the order of ITO for the assessment year 1971-72 but for the assessment year 1972-73 he allowed the claim. The Tribunal upheld the order of the AAC. On reference, the assessee contended that its business of manufacturing heavy duty cranes was a priority industry because the cranes of the kind manufactured by it were specialised equipment used in industries specified in item No. 8A of First Schedule to the Industries (Development and Regulation) Act, 1951. It also contended that it manufactures cranes as per orders and specifications received from various clients who were manufacturers or users of sugar, chemical, textile or cement machinery or other machinery of industries in item No. 8A. and all these industries were covered by item No. 4 in the Sixth Schedule to the 1961 Act, read with item No. 8A of the First Schedule to the Industries (Development and Regulation) Act, 1951. HELD Section 80-I gave certain tax benefits to support a priority industry. Item No. 8A of the First Schedule to the Industries (Development and Regulation) Act, deals with "major items of specialised equipment used in specific industries." For any item…

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