M/S. ASPINWALL AND CO. LTD. versus THE COMMISSIONER OF INCOME-TAX, ERNAKULAM.

M/S. ASPINWALL AND CO. LTD. versus THE COMMISSIONER OF INCOME-TAX, ERNAKULAM.

Processing of raw coffee berries through a series of integrally connected processes into coffee beans results in a commercially new and distinct commodity, constituting 'manufacture' for Section 32A; therefore, the assessee is entitled to investment allowance.

Parties
Appellant Assessee: M/S. Aspinwall and Co. Ltd.; Respondent Revenue: The Commissioner of Income-Tax, Ernakulam
Jurisdiction
India
Judgment Date
05 September 2001
Procedural Posture
Civil Appeal / Appeal From Kerala High Court Judgment in I.t.r. Nos. 43 and 44 of 1993
Outcome
Appeal allowed
Legal Topics
Investment Allowance, Manufacture Under Income Tax Act, Processing Versus Manufacturing, Interpretation of Section 32 a
Income Tax Law Investment Allowance Manufacture Under Income Tax Act Processing Versus Manufacturing Interpretation of Section 32 a

Case Brief

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Parties

M/S. Aspinwall and Co. Ltd.

Appellant Assessee

The Commissioner of Income-Tax, Ernakulam

Respondent Revenue

Procedural Posture

Civil Appeal / Appeal From Kerala High Court Judgment in I.t.r. Nos. 43 and 44 of 1993

Legal Issues

  1. 1 Whether machinery used for curing coffee is eligible for investment allowance under Section 32A of the Income Tax Act, 1961
  2. 2 Whether processing raw coffee berries into coffee beans amounts to 'manufacture' or 'production' within the meaning of Section 32A

Ratio Decidendi

Processing of raw coffee berries through a series of integrally connected processes into coffee beans results in a commercially new and distinct commodity, constituting 'manufacture' for Section 32A; therefore, the assessee is entitled to investment allowance.

Court Disposition

Appeal allowed

Orders

  • The judgment of the Kerala High Court is set aside.
  • The order of the Income Tax Appellate Tribunal is restored.