Law:

Section:

Section 80J of the Income-tax Act, 1961 - Deductions - Profits and gains from new industrial undertakings - Assessment years 1981-82 to 1983-84 - Whether assessee's business of crushing large tobacco leaves and cutting into smaller pieces and sieving them, involved manufacturing or processing of goods and assessee was, therefore, an industrial company - Held, yes - Assessee was granted relief under section 80J for assessment year 1980-81 - Tribunal found no distinguishing feature for assessment year 1981-82 - Commissioner (Appeals) and Tribunal had given concurrent finding in favour of assessee regarding question whether assessee was or was not employing more than 20 workers in processing unit as envisaged under section 80J(4)(iv) - Whether assessee-company would, therefore, be entitled to relief under section 80J - Held, yes FACTS The revenue disputed the conclusions of the Tribunal that the assessee-company was engaged in manufacturing and processing activities and was, therefore, an industrial company, and the assessee-company was entitled to relief under section 80J. The question was as to whether the assessee was or was not employing more than 20 workers in the processing unit as envisaged under section 80J(4)(iv). HELD There was no dispute about the fact that the assessee's business consisted of crushing large tobacco leaves and cutting into smaller pieces, sieving them, i.e., after removing the dust and unwanted stems from the tobacco leaves, selling them to the bidi manufacturers. In connection with another assessee carrying on the same business in CIT v. Ashwinkumar Gordhanbhai & Bros. (P.) Ltd. [1995] 212 ITR 614/ 78 Taxman 395 , the High Court had held that the aforesaid business involved manufacturing or processing of goods and the assessee was, therefore, an industrial company. Following the aforesaid decision, it was to be held that the Tribunal was right in coming to the conclusion that the assessee-company was engaged in manufacturing and processing activities and was, therefore, an industrial company. As regards relief under section 80J, the Tribunal confirmed the order of the Commissioner (Appeals) who had based his decision in favour of…

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