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August 2008

S. 80-IB : Conversion of polymer granules into specialised polymer alloys in powder form amounts to manufacture

By K. B. Bhujle, Advocate
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39 Deduction u/s.80-IB of Income-tax Act,
1961 : A.Y. 2002-03 : Conversion of polymer granules into specialised polymer
alloys in powder form amounts to manufacture : Assessee entitled to deduction
u/s.80-IB.


[CIT v. Shri Swasan Chemicals (M) P. Ltd., 300 ITR 115
(Mad.)]

The assessee-company was engaged in the manufacture of
plastic powder out of plastic granules. For the A.Y. 2002-03, the assessee’s
claim for deduction u/s.80-IB of the Income-tax Act, 1961 was rejected by the
Assessing Officer on the ground that the activity undertaken by the assessee in
producing the plastic powder did not amount to manufacture. The Tribunal allowed
the assessee’s claim.

On appeal by the Revenue, the Madras High Court upheld the
decision of the Tribunal and held as under :

“The Tribunal had recorded a finding that the assessee was
manufacturing various products of polymer powders. The finished products were
completely different from the raw materials. The product range itself was wide
and the products carried different technical nomenclature. The Tribunal had
come to the right conclusion which needed no interference.”


 

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