REGAL INDUSTRIES LTD. Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE assessee has preferred this appeal under s. 260A of the IT Act, 1961 (for short, "the Act") against the order dt. 19th asst. yr. 1997 -98, proposing to raise the following substantial questions of law :

(2.) THE assessee claimed deduction under s. 80 -IA. The said claim was rejected by the AO, which view has been upheld by the CIT(A) as well as by the Tribunal. It was held that the assessee claimed that it was purchasing latex and diluting it in a big drum called "emulsifiers fire", which could not be termed "manufacturing". The factum of carrying on manufacturing activity was also not established. The assessee could not produce any electricity bill. There was no evidence of ESI or PF returns nor any evidence of sale of goods. The assessee claimed that books of account were burnt in fire and though every effort was made to lodge FIR, the police Department did not do so. Reliance was also placed on a certificate issued by the general manager, Solan. The assessee produced extract from payment of wages register. The evidence of the assessee was rejected concurrently by all the authorities.

(3.) THE Tribunal observed : "In view of these facts, since at any stage, nothing has been produced/furnished evidencing that the assessee has actually manufactured anything, therefore, we have not found any infirmity in the impugned order. Our above view is also fortified by the following decisions : CIT vs. Hindusthan Metal Refining Works (P) Ltd. (1981) 23 CTR (Cal) 252 : (1981) 128 ITR 472 (Cal), CIT vs. Relish Foods (1999) 152 CTR (SC) 500 : (1999) 237 ITR 59 (SC), Sacs Eagles Chicory vs. CIT (2002) 175 CTR (SC) 201 : (2002) 255 ITR 178 (SC), D.D. Shah & Brothers vs. Union of India (2005) 197 CTR (Raj) 1 : (2006) 283 ITR 486 (Raj). If the aforesaid facts and the judicial pronouncements are kept in juxtaposition with the facts of the present appeal, we have found that the assessee neither produced the records of purchasing raw material nor explained the process of manufacturing and also no proof of sale. For claiming deduction under s. 80 -IA, the assessee is supposed to explain that the end product, if any, is commercially known differently. However, in the present appeal, the assessee even has not explained what is manufactured by it or whether the assessee is actually manufacturing anything, therefore, in the absence of all these facts, the benefit of deduction cannot be extended to the assessee. Consequently, we have not found any infirmity in the impugned order, the same is upheld."