COMMISSIONER OF INCOME TAX Vs. NATRAJ PROCESSING INDUSTRIES

JUDGEMENT

(1.) BY an order dated September 16, 1982, this court directed the Income-tax Appellate Tribunal, 'A' Bench, Patna, to submit a statement of case under Section 256(2) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), and to refer the following question of law to this court :

(2.) AS per the aforesaid direction, a reference has been made under Section 256(2) to this court. The present case relates to the assessment year 1977-78. The assessee-firm, namely, Messrs. Natraj Processing Industries, Gaya, started its business in calendering of cloth in the accounting year and thereby claimed the relief under Section 80J of the Act. The relief was denied by the Income-tax Officer on the ground that the assessee-firm was not engaged in manufacturing or producing any article.

(3.) THE question of determination of this aspect is no more res Integra. In the case of Mafatlal Fine Spg. and Mfg. Co. Ltd. v. Collector of Central Excise, AIR 1989 SC 784, the apex court, while considering a case of almost similar nature, has observed as follows (at page 787) :