C. I. T. MUMBAI versus M/S. EMPTEE POLY-YARN PVT. LTD.

C. I. T. MUMBAI versus M/S. EMPTEE POLY-YARN PVT. LTD.

Twisting and texturising POY by a thermo mechanical process constitutes 'manufacture' for the purposes of s.80IA because the process results in a structural and chemical change rendering POY fit for fabric production, which it could not achieve before the process.

Parties
Appellant: C.I.T., Mumbai; Respondent: Emptee Poly-Yarn Pvt. Ltd.
Jurisdiction
India
Judgment Date
20 January 2010
Procedural Posture
Civil Appeal / Final Judgment
Outcome
Appeals dismissed
Legal Topics
Manufacture Under S.80 IA, Twisting and Texturising of Partially Oriented Yarn, Tax Deduction Eligibility
Income Tax Manufacture Under S.80 IA Twisting and Texturising of Partially Oriented Yarn Tax Deduction Eligibility

Case Brief

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Parties

C.I.T., Mumbai

Appellant

Emptee Poly-Yarn Pvt. Ltd.

Respondent

Procedural Posture

Civil Appeal / Final Judgment

Legal Issues

  1. 1 Whether twisting and texturising of partially oriented yarn ('POY') amounts to 'manufacture' under Section 80IA of the Income Tax Act, 1961

Ratio Decidendi

Twisting and texturising POY by a thermo mechanical process constitutes 'manufacture' for the purposes of s.80IA because the process results in a structural and chemical change rendering POY fit for fabric production, which it could not achieve before the process.

Court Disposition

Appeals dismissed

Orders

  • Civil Appeals filed by the Department are dismissed with no order as to costs.