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O/TAXAP/82/2003 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL NO. 82 of 2003
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE KS JHAVERI
and HONOURABLE MR.JUSTICE K.J.THAKER
================================================================ 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ================================================================ COMMISSIONER OF INCOME TAX....Appellant(s) Versus M/S.MAHALAXMI SHIP BREAKING CORPORATION.....Opponent(s) ================================================================ Appearance: MR M.R. BHATT SR. ADVOCATE FOR MRS. MAUNA BHATT, ADVOCATE for the Appellant(s) No. 1 RULE SERVED for the Opponent(s) No. 1 ================================================================ CORAM: HONOURABLE MR.JUSTICE KS JHAVERI and Page 1 of 3
O/TAXAP/82/2003 JUDGMENT HONOURABLE MR.JUSTICE K.J.THAKER
Date : 07/11/2014
ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) 1. While admitting the appeal on 01.04.2003, the following substantial question of law was framed; “Whether the Appellate Tribunal was right in law and on facts in allowing the deduction u/s.80HH to the assessee, holding that ship breaking activity gives rise to manufacturing and production of altogether a new article or things?” 2. The facts in brief are that the assesseefirm is engaged in the business of shipbreaking at Alang Port. During the year under consideration, the assessee claimed deduction u/s.80HH on the ground that shipbreaking activity is a manufacturing activity. The Assessing Officer disallowed the claim of Rs.5,03,467/ on the ground that shipbreaking activity cannot be considered to be an undertaking engaged in manufacture or production of articles or things. On appeal, the CIT confirmed the order of the Assessing Officer. 3. We have heard learned Senior Standing Counsel Mr. M.R. Bhatt for the Revenue. Though served, none appears for the assessee. The question whether shipbreaking activity can be considered a manufacturing activity or not is already answered by this Court in the decision rendered in the case of Vijay Ship Page 2 of 3
O/TAXAP/82/2003 JUDGMENT Breaking Corporation and others v. Commissioner of IncomeTax, (2009) 314 ITR 309 (SC) wherein, it is held that shipbreaking activity gave rise to the production of a distinct and different article and therefore, the assessee was entitled to allowance of deductions under Sections 80HH and 80I of the IncomeTax Act, 1961 in respect of profits from shipbreaking activity. In view of the above, the question is answered in favour of the assessee and against the revenue. The appeal is, accordingly, dismissed. (K.S.JHAVERI, J.) (K.J.THAKER, J) Pravin/* Page 3 of 3