Commissioner Of Income Tax v. M/S.mahalaxmi Ship Breaking Corporation.....opponent(S

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 ?the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ?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 ?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 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.80-HH 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 assessee-firm is engaged in the business of ship-breaking at Alang Port. During the year under consideration, the assessee claimed deduction u/s.80-HH on the ground that ship-breaking activity is a manufacturing activity. The Assessing Officer disallowed the claim of Rs.5,03,467/- on the ground that ship-breaking 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 ship-breaking 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 Breaking Corporation and others v. Commissioner of Income-Tax, (2009) 314 ITR 309 (SC) wherein, it is held that ship-breaking 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 80-I of the Income-Tax Act, 1961 in respect of profits from ship-breaking 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/*