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May 2013

Industrial Undertaking – Deduction u/s. 80IA – Texturing and twisting of polyester yarn amounts to manufacture.

By Kishor Karia, Chartered Accountant
Atul Jasani, Advocate
Reading Time 1 mins
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CIT vs. Yashasvi Yarn Ltd. (2013) 350 ITR 208 (SC).

A short question that arose for determination before the Supreme Court was whether texturing and twisting of polyester yarn amounts to “manufacture” for the purpose of computation of deduction u/s. 80IA.

The High Court had dismissed the appeals of the Revenue following its decision in CIT vs. Emptee Poly-Yarn Pvt. Ltd. (2008) 305 ITR 309 (Bom).

The Supreme Court dismissed the civil appeals of the Revenue holding that the question had been squarely answered by it in CIT vs. Emptee Poly-Yarn P. Ltd. (2010) 320 ITR 665 (SC).

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