COMMISSIONER OF INCOME TAX Vs. SOVRIN KNIT WORKS

JUDGEMENT

(1.) THE matter here concerns the quantum of development rebate that the assessee is entitled to in respect of new machinery installed by it, namely, whether it should be 25 per cent. or 15 per cent. This, in turn, depends upon the interpretation of the provisions of Section 33(1)(b)(B)(i) of the Income-tax Act, 1961, read with item No. (32) of the Fifth Schedule thereto.

(2.) THE assessee's business consists of bleaching, dyeing and finishing grey cotton cloth purchased by it and thereafter doing embroidery on such finished cloth. THE point at issue is whether this would bring it within the ambit of item No. (32) of the Fifth Schedule to the Act which reads as under :

(3.) IT was held that the mere processes of dyeing, finishing, scouring and singeing of fabrics and textiles only result in giving a good finish to a particular article manufactured or produced and making it more marketable, but these processes, by themselves, do not amount to "manufacture or production of textiles" within the meaning of entry 23 of Schedule I and, therefore, the assessee was not entitled to the grant of the tax credit certificate under Section 280ZB of the Income-tax Act, 1961.