Indian Railway Construction Co. Ltd, New Delhi V. IAC (A), New Delhi

ITA 2144/DEL/1989

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 6974 (ITAT-DELHI)
• Duration Of Justice: 27 year(s) 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 07-06-2016
• Assessment Year: misc
• Appeal Filed On: 07-04-1989
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SULEKHA VERMA
• Section: 263

Judgement Text

ITA NOS. 2144/DEL/1989, 544/DEL/1989, 3186/DEL/1990,2192/DEL/1991, 525/DEL/1995 1 BEFORE IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D NEW DELHI SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA NO. 2144/DEL/1989 ASSESSMENT YEAR: 1984 -85 ITA NO. 544/DEL/1989 ASSESSMENT YEAR: 1985 -86 ITA NO. 3186/DEL/1990 ASSESSMENT YEAR: 1986 -87 ITA NO. 2192/DEL/1991 ASSESSMENT YEAR: 198 7-88 ITA NO. 525/DEL/1995 ASSESSMENT YEAR: 19 91-92 INDIAN RAILWAY CONST. CO. LTD. VS. IAC (A) R-XIII PALIKA BHAWAN, SECTOR XIII, NEW DELHI. R.K. PURAM, NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI VED JAIN, ADV. SHRI PRANJAL SRIVASTAVA, ADV. DEPARTMENT BY: MS. SULEKHA VERMA, CIT(DR) DATE OF HEARING : 09.06.2016 DATE OF PRONOUNCEMENT : 01. 07.2016 ITA NOS. 2144/DEL/1989, 544/DEL/1989, 3186/DEL/1990,2192/DEL/1991, 525/DEL/1995 2 O R D E R PER CHANDRA MOHAN GARG, JUDICIAL MEMBER THESE APPEALS HAVE BEEN FILED BY THE ASSESE E AGAINST THE ORDER OF THE CIT(A)-I, DELHI PASSED IN RESPECTIVE APPEALS FO R ASSESSMENT YEARS 1984-85 TO 1987-88 AND 1991-92. 2. IT IS PERTINENT TO NOTE THAT THESE APPEALS HAVE BEEN SET ASIDE BY THE HONBLE HIGH COURT OF DELHI ORDER DATED 27.4.20 09 PASSED IN ITA NO. 222 OF 2006 AND OTHER APPEALS( FOR SHORT HIGH COUR T ORDER) TO THE TRIBUNAL FOR LIMITED PURPOSE I.E. FOR RE-EXAMINATIO N OF THE SOLE ISSUE EMERGING FROM PARAS 31 TO 34 OF THE ORDER THAT A S TO WHETHER SUCH A CLAIM WHICH IS MADE ON THE MANUFACTURE OF ARTICLES WHICH HAVE BEEN USED FOR THE CONSTRUCTION WOULD BE ADMISSIBLE OR NO T U/S 80HH AND 80I OF THE ACT. 3. WE HAVE HEARD ARGUMENTS OF BOTH THE SIDES A ND CAREFULLY PERUSED THE RELEVANT MATERIALS PLACED ON RECORD INTERALIA O RDER OF HONBLE HIGH COURT DATED 27.4.2009 (SUPRA) AND OTHER RELEVANT OR DERS AND JUDGMENT AS RELIED BY BOTH THE PARTIES. ITA NOS. 2144/DEL/1989, 544/DEL/1989, 3186/DEL/1990,2192/DEL/1991, 525/DEL/1995 3 4. THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT AS PER PARA 2 OF HIGH COURT ORDER BESIDES CONSTRUCTION WORK OF RAILW AY LINE THE ASSESSEE COMPANY BEING A PUBLIC SECTOR COMPANY INCORPORATED UNDER COMPANIES ACT AND UNDER ADMINISTRATIVE CONTROL OF MINISTRY OF RAILWAYS ALSO ENGAGED IN THE MANUFACTURING OF LARGE NO. OF ITEMS AND THIS FACT HAS ALSO BEEN NOTED BY THE TRIBUNAL AT PAGE 2 OF LAST P ARA FOR ASSESSMENT YEAR 1983-84 DATED 20.8.1991 (HEREINAFTER THE TRIB UNAL ORDER). THE LD. COUNSEL VEHEMENTLY POINTED OUT THAT AS PER THE HON BLE HIGH COURT ORDER (SUPRA), IT HAS BEEN DECIDED THAT THE ASSESEE IS NOT ELIGIBLE FOR DEDUCTION IN RESPECT OF THE INCOME EARNED FROM CONS TRUCTION ACTIVITIES BUT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80HH & 80I OF THE ACT ON THE INCOME ACCRUED DURING THE RELEVANT PERIOD FROM THE MANUFACTURING ACTIVITIES AND FOR THIS LIMITED PURPOSES CALCULATIO N OF EXEMPTION THE LIMITED ISSUE SHOULD BE RESTORED TO THE FILE OF THE AO FOR WANT OF NECESSARY DETAILS IN THIS REGARD. 5. THE LD. CIT(DR) VEHEMENTLY CONTENDED THAT THE RE IS NO REQUIREMENT OF SETTING ASIDE THE ISSUE TO THE FILE OF THE AO AS THE ASSESSEE IS NOT CARRYING ANY MANUFACTURING ACTIVITY AND EVEN IF SOME ITA NOS. 2144/DEL/1989, 544/DEL/1989, 3186/DEL/1990,2192/DEL/1991, 525/DEL/1995 4 SMALL MANUFACTURING ACTIVITY IS BEING CARRIED OUT, THE ASSESSEE DID NOT MAINTAIN SEPARATE ACCOUNTS FOR CONSTRUCTION AND MAN UFACTURING ACTIVITY HENCE, THERE IS NO REQUIREMENT FOR SENDING THE CASE TO THE FILE OF THE AO FOR THIS PURPOSE. THE LD. CIT(DR) ALSO DRAWN OUR AT TENTION TOWARDS HONBLE HIGH COURT ORDER (SUPRA) PARAS 31 TO 34 AND ORDER U/S 263 OF THE ACT DATED 7.2.1989 FOR ASSTT. YEAR 1984-85 PAGE 2 PARA 4 AND CONTENDED THAT ASSESEE COMPANY IS A RAILWAY CONSTRU CTION COMPANY THERE MIGHT BE A MINOR ACTIVITY OF MANUFACTURING OF ARTICLES BUT THE PURPOSE OF THIS ACTIVITY IS TO COMPLETE MAIN CONSTR UCTION PROJECT HENCE THE SAME IS NOT ELIGIBLE FOR DEDUCTION U/S 80HH AND 80I OF THE ACT. THE LD. CIT(DR) ALSO DRAWN OUR ATTENTION TO PARA 3 OF T HE ORDER OF THE COMMISSIONER PASSED U/S 263 OF THE ACT DATED 7.2.19 89 FOR ASSTT. YEAR 1984-85 AND CONTENDED THE ASSESSEE FAILED TO ESTABL ISH THAT THE ASSESSEE IS AN INDUSTRIAL UNDERTAKING ELIGIBLE FOR DEDUCTION U/S 80HH AND 80I OF THE ACT. HENCE, THERE IS NO REQUIREMENT FOR SENDING THIS ISSUE TO THE FILE OF THE AO FOR COMPUTATION OF DEDUCTION. TH E LD. CIT(DR) ALSO POINTED OUT THAT AS PER ORDER OF THE TRIBUNAL DATED 28.4.2006 WHICH WAS CHALLENGED BY THE SAME BEFORE THE HONBLE HIGH COUR T, IN PARA 6 THE TRIBUNAL HAS ALSO OBSERVED THAT MANUFACTURING ACTIV ITY OF THE ASSESEE WAS NOT VERY SIGNIFICANT COMPARED TO THE TOTAL TURN OVER OF THE ASSESEE ITA NOS. 2144/DEL/1989, 544/DEL/1989, 3186/DEL/1990,2192/DEL/1991, 525/DEL/1995 5 WHICH AGAIN GOES AGAINST THE CLAIM OF DEDUCTION PLA CED BY THE ASSESSEE. THE LD. CIT(DR) ALSO CONTENDED THAT THE CONCLUSION RECORDED BY THE TRIBUNAL IN PARA 9 TO 11 OF THE TRIBUNAL ORDER DATE D 28.4.2006 (SUPRA) HAS BEEN DISCUSSED BY HONBLE HIGH COURT ORDER (SU PRA) HENCE CLAIM THE ASSESSEE IS NOT SUSTAINABLE. THE LD. CIT(DR) AL SO CONTENDED THAT AS PER PROFILE OF ASSESSEE COMPANY AVAILABLE ON WEBSIT E THE COMPANY IS IN THE CONSTRUCTION ACTIVITY AND NOT IN THE MANUFACTUR ING ACTIVITY AND THIS DEDUCTION CLAIMED BY THE ASSESSEE CANNOT BE ALLOWE D. THE LD. CIT(DR) ALSO PLACED RELIANCE ON THE DECISION OF HONBLE HIG H COURT OF DELHI IN THE CASE OF CIT VS. MINOCHA BROTHERS PVT. LTD. (1986) 1 60 ITR 134(DEL) WHICH HAS BEEN SUBSEQUENTLY UPHELD BY HONBLE SUPRE ME COURT, CONTENDED THAT CONSTRUCTION IS NOT A MANUFACTURING ACTIVITY AND WHEN THE ASSESSEE IS PURELY ENGAGED IN THE CONSTRUCTION ACTIVITY THEN IT IS NOT ELIGIBLE FOR DEDUCTION U/S 80HH AND 80I OF THE ACT. THE LD. CIT(DR) CONTENDED THAT THE OBSERVATION OF HONBLE HIGH COUR T IN PARA 32 ARE BASED ON FACTUALLY INCORRECT ARGUMENTS AS SUCH ARGU MENT WAS NOT PROPERLY CONTRAVENED BY THE LD. STANDING COUNSEL OF THE DEPARTMENT APPEARING BEFORE HONBLE HIGH COURT. ITA NOS. 2144/DEL/1989, 544/DEL/1989, 3186/DEL/1990,2192/DEL/1991, 525/DEL/1995 6 6. PLACING REJOINDER THE ABOVE CONTENTIONS OF REVENUE , THE LD. COUNSEL FOR THE ASSESSEE POINTED OUT THAT THE LD. C IT(DR) WANTS TO SAY THAT THE CASE OF THE REVENUE WAS NOT PLACED PROPER LY BY THE LD. STANDING COUNSEL BEFORE HONBLE HIGH COURT WHICH IS NOT PERMISSIBLE AS PER ETHICS OF COURT ARGUMENTS AS THE ABILITY OF HIG H COURT OFFICER CAN NOT BE CHALLENGED ON DOUBTED BY THE LOWER COURT OFFICER APPEARING BEFORE THE TRIBUNAL ON BEHALF OF THE DEPARTMENT. THE LD. C OUNSEL ALSO POINTED OUT THAT THE ASSESSEE CLAIMED ENTIRE 100% INCOME AS DEDUCTION U/S 80HH & 80I OF THE ACT BUT THE CLAIM REGARDING CONS TRUCTION ACTIVITY HAS BEEN DENIED BY THE HONBLE HIGH COURT, HOWEVER, THE CLAIM OF DEDUCTION IN RESPECT OF MANUFACTURING ACTIVITIES HAS BEEN HEL D AS ACCEPTABLE BY THE HONBLE HIGH COURT THEN IT IS NOT OPEN TO THE REVEN UE TO CHALLENGE THIS CONCLUSION OF HONBLE HIGH COURT BEFORE TRIBUNAL. T HE LD. COUNSEL ALSO POINTED OUT THE RATIO OF THE HONBLE HIGH COURT ORD ER IN THE CASE OF CIT VS. MINOCHA BROTHERS (SUPRA) AND HONBLE SUPREME CO URT IN THE CASE OF N.C. BUDHIRAJA (SUPRA) HAS BEEN FOLLOWED IN THE HON BLE HIGH COURT ORDER (SUPRA) IN ASSESSEES CASE THUS CLAIM OF DEDUCTION U/S 80HH & 80I OF THE ACT HAS BEEN ALLOWED ON THE INCOME ACCRUED FROM CONSTRUCTION ACTIVITY. ITA NOS. 2144/DEL/1989, 544/DEL/1989, 3186/DEL/1990,2192/DEL/1991, 525/DEL/1995 7 7. ON CAREFUL CONSIDERATION OF ABOVE SUBMISSI ONS, FROM THE ORDER OF HONBLE HIGH COURT ORDER (SUPRA) PARAS 31 TO 34 WE OBSERVE THAT THE ISSUE HAS BEEN SET ASIDE TO THE TRIBUNAL FOR RE-EXA MINATION OF THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S 80HH & 80I OF THE ACT KEEPING IN VIEW THE PARAMETERS LAID DOWN BY THE HONBLE SUPREME COU RT IN THE CASE OF N.C. BUDHIRAJA (SUPRA). THE RELEVANT PARA 28 TO 34 A RE BEING RESPECTFULLY REPRODUCED BELOW FOR THE SAKE OF COMPLETENESS IN TH IS ORDER : 28. THE SUPREME COURT, IN APPEAL PREFERRED BY THE REVENUE AGAINST THE JUDGMENT OF THE HIGH COURT, REVERSED THE DECISIO N OF THE HIGH COURT. THE SUPREME COURT NOTED THAT SECTION 80HH OC CURS 'IN CHAPTER VI-A, WHICH PROVIDES FOR 'DEDUCTIONS TO BE MADE IN COMPUTING TOTAL INCOME'. SUB-SECTION (1) OF SECTION 80HH PROVIDES THAT 'WHERE THE GROSS TOTAL INCOME OF AN ASSESSEE I NCLUDES ANY PROFITS AND GAINS DERIVED FROM AN INDUSTRIAL UNDERT AKING, OR THE BUSINESS OF A HOTEL, TO WHICH THIS SECTION APPLIES, THERE SHALL, IN ACCORDANCE WITH AND SUBJECT TO THE PROVISIONS OF TH IS SECTION, BE ALLOWED, IN COMPUTING THE, TOTAL INCOME OF THE ASSE SSEE, A DEDUCTION FROM SUCH PROFITS AND GAINS OF AN AMOUNT EQUAL TO TWENTY PER CENT THEREOF'. SUB-SECTION (2) SAY THAT SECTION 80HH APPLIES TO ANY INDUSTRIAL UNDERTAKING WHICH FULFILS AT THE FOUR CONDITIONS PRESCRIBED THEREIN. 29. THEREAFTER, SUB-SECTION (2) OF SECTION 80-HH WAS SET OUT BY THE APEX COURT, WHICH LAYS DOWN THE CONDITIONS F OR THE APPLICABILITY OF THIS PROVISION IN RESPECT OF INDUSTRIAL UNDE RTAKINGS. THE SUPREME COURT PROCEEDED ON THE BASIS THAT THE ASSESS EE WAS AN INDUSTRIAL UNDERTAKING AND DELINEATED FOLLOWING QUESTIO N WHICH AROSE FOR CONSIDERATION :- IN SHORT. THE LIMITED QUESTION IS WHETHE R THE CONSTRUCTION OF A DAM TO STORE WATER (RESERVOIR) CAN B E CHARACTERIZED AS AMOUNTING TO MANUFACTURING OR PROD UCING AN ARTICLE OR ITA NOS. 2144/DEL/1989, 544/DEL/1989, 3186/DEL/1990,2192/DEL/1991, 525/DEL/1995 8 ARTICLES,' AS THE CASE MAY BE.' THE COURT THEREFORE, EXPLAINED THE MEAN ING OF THE WORDS MANUFACTURE, PRODUCTION AND ARTICL ES AND HELD AS UNDER :- THE WORD 'PRODUCTION' OR 'PRODUCE' WHEN USED IN JUXTAPOSITION WITH THE WORD 'MANUFACTURE' TAKES IN BRINGING INTO EXISTENCE NEW GOODS BY A PROCESS WHICH MAY OR MAY NOT AMOUNT TO MANUFACTURE. IT ALSO TAKES IN ALL THE BY- PRODUCTS, INTERMEDIATE PRODUCTS AND RESIDUAL PRODUC TS WHICH EMERGE IN THE COURSE OF MANUFACTURE OF GOODS. THE N EXT WORD TO BE CONSIDERED IS 'ARTICLES', OCCURRING IN T HE SAID CLAUSE. WHAT DOES IT MEAN? THE WORD IS NOT DEFINED IN THE ACT OR THE RULES. IT MUST, THEREFORE, BE UNDERSTOOD IN ITS NORMAL CONNOTATION - THE SENSE IN WHICH IT IS UNDER STOOD IN THE COMMERCIAL WORLD. IT IS EQUALLY WELL TO KEEP IN MIND THE CONTEXT SINCE A WORD TAKES ITS COLOUR FROM THE CONT EXT. THE WORD 'ARTICLES' IS PRECEDED BY THE WORDS 'IT HAS BE GUN OR BEGINS TO MANUFACTURE OR PRODUCE'. CAN WE SAY THAT THE WORD 'ARTICLES' IN THE SAID C1AUSE COMPREHENDS AND TAKES WITHIN ITS AMBIT A DAM, A BRIDGE, A BUILDING, A ROA D, A CANAL AND SO ON? WE FIND IT DIFFICULT TO SAY SO. WOULD ANY PERSON WHO HAS CONSTRUCTED A DAM SAY THAT HE HAS MANUFACTU RED AN ARTICLE OR THAT HE HAS PRODUCED AN ARTICLE? OBVI OUSLY NOT. IF A DAM IS AN ARTICLE, SO WOULD BE A BRIDGE, A ROA D, AN UNDERGROUND CANAL AND A MULTI-STOREYED BUILDING. TO SAY THAT ALL OF THEM FALL WITHIN THE MEANING OF THE WORD 'AR TICLES' IS TO OVERSTRAIN THE LANGUAGE BEYOND ITS NORMAL AND ORDIN ARY MEANING. IT IS EQUALLY DIFFICULT TO SAY THAT THE PROCESS OF CONSTRUCTING A DAM IS A PROCESS OF MANUFACTURE OR A PROCESS OF PRODUCTION. IT IS TRUE THAT A DAM IS COMPOSED OF SEVERAL ARTICLES; IT IS COMPOSED OF STONES, CONCRETE, CEMEN T, STEEL AND OTHER MANUFACTURED ARTICLES LIKES GATES, SLUICE S, ETC. BUT TO SAY THAT THE END PRODUCT, THE DAM, IS AN ARTICLE IS TO BE UNFAITHFUL, TO THE NORMAL CONNOTATION OF THE WORD. A DAM IS CONSTRUCTED: IT IS NOT MANUFACTURED OR PRODUCED. TH E EXPRESSION. 'MANUFACTURE' AND 'PRODUCE' ARE NORMALL Y ASSOCIATED WITH MOVABLES - ARTICLES AND GOODS, BIG AND SMALL - BUT THEY ARE NEVER EMPLOYED TO DENOTE THE CONSTRU CTION ITA NOS. 2144/DEL/1989, 544/DEL/1989, 3186/DEL/1990,2192/DEL/1991, 525/DEL/1995 9 ACTIVITY OF THE NATURE INVOLVED IN THE CONSTRUCTION OF A DAM OR FOR THAT MATTER A BRIDGE, A ROAD OR A BUILDING. (EMPHASIS SUPPL IED) 30. IT IS DEAR FROM THE ABOVE THAT: (I) WHILE INTERPRETING THE WORDS 'MANUFACTURE' OR 'PRODUCTION, THE COURT DREW DISTINCTION BETWEEN MANUFACTURE/PROD UCE ON THE ONE HAND AND 'CONSTRUCTION' ON THE OTHER HAND; (II) THINGS LIKE DAM OR, FOR THAT MATTER, BRIDGE, ROADS, CANALS, BUILDINGS, ARE CONSTRUCTED AND NOT M ANUFACTURED; (III) THE EXPRESSION 'MANUFACTURE' O R 'PRODUCE' ARE NORMALLY ASSOCIATED WITH MOVABLES, I.E. ARTICLES AND GOODS, BUT NOT WITH CONSTRUCTION ACTIVITY; (IV) THE CONSTRUCTION ACTIVITY MAY B E COMPOSED OF ARTICLES, BUT THAT BY ITSELF WILL NOT BECOME PRODUCTION OF ARTICL ES. FOR THIS PURPOSE, IT IS THE 'END PRODUCT' WHICH IS THE TEST AND NOT VARIOUS COMPONENTS/ARTICLES WHICH GO INTO THE CONST RUCTION OF THE SAID END PRODUCT. 31. APPLYING THE AFORESAID TEST. WHEN WE E XAMINE THE CASE OF THE ASSESSEE IN THE CONTEXT OF END PRODUC T, IT IS DIFFICULT TO COME TO THE CONCLUSION THAT THE ACTIVITY O F LAYING RAILWAY LINE CAN AMOUNT TO 'MANUFACTURE' OR 'PRODUCE'. IT WOULD DEFINITELY BE A CONSTRUCTION ACTIVITY. 32. WE MAY, HOWEVER, NOTE THE ARGUMENT OF LEARNED COUNSEL APPEARING FOR THE ASSESSEE, WHO SOUGHT TO DRAW A FINE DISTINCTION BY MAKING A SUBMISSION THAT THE ASSE SSEE WAS NOT CLAIMING BENEFIT OF SECTION 80-HH AND 80-1 ON TH E STRENGTH OF SUCH MANUFACTURING ACTIVITY. ON THE CONTRARY, T HE ASSESSEE WAS SEEKING BENEFIT UNDER THE AFORESAID PROVISIONS O N THE STRENGTH OF MANUFACTURING ACTIVITY CARRIED ON BY THE A SSESSEE, NAMELY, MANUFACTURE OF NUMEROUS ITEMS, PARTS, COMPONENTS , ETC. WHICH GO INTO THE WORKING AND OPERATIONAL RAILWAY TRACKS. IN THIS BEHALF, HE HAD RELIED UPON THE FOLLOWING OBSE RVATION OF THE SUPREME COURT IN N.C. BUDHIRAJA (SUPRA) :- IT MAY BE THAT THE RESPONDENT IS HIMSELF MANUFACTU RING SOME OF THE ARTICLES LIKE GATES, WINDOWS AND DOORS WHICH GO INTO THE CONSTRUCTION OF A DAM BUT THAT MAKES LITTL E ITA NOS. 2144/DEL/1989, 544/DEL/1989, 3186/DEL/1990,2192/DEL/1991, 525/DEL/1995 10 DIFFERENCE TO THE PRINCIPLE. THE PETITIONER IS NOT CLAIMING THE DEDUCTION PROVIDED BY SECTION 8OHH ON THE VALUE OF THE SAID MANUFACTURED ARTICLES BUT ON THE TOTAL VAL UE OF THE DAM AS SUCH. IN SUCH A SITUATION. IT IS IMMA TERIAL WHETHER THE MANUFACTURED ARTICLES WHICH GO INTO THE CONSTRUCTION OF A DAM ARE MANUFACTURED BY HIM OR PURCHASED BY HIM FROM ANOTHER PERSON. WE NEED NOT EXPRESS ANY OPINION ON THE QUESTION WHAT WOULD BE THE POSITION IF THE RESPONDE NT HAD CLAIMED THE BENEFIT OF SECTION 80HH ON THE VALUE OF THE ARTICLES MANUFACTURED OR PRODUCED BY HIM WHICH ARTI CLES HAVE GONE INTO/CONSUMED IN THE CONSTRUCTION OF THE DAM.' 33. THE LEARNED COUNSEL IS RIGHT TO THE EXTENT THAT IN N.C. BUDHIRAJA THE SUPREME COURT CATEGORICALLY MENTIONED THAT THE ASSESSEE HAD CLAIMED BENEFIT OF SECTION 80-HH A ND 80-1 ON THE TOTAL VALUE OF THE CONSTRUCTION OF DAM AS SU CH AND NOT ON THE VALUE OF MANUFACTURED ARTICLES WHICH GO INTO THE CONSTRUCTION OF A DAM. AT THE SAME IT IS ALSO CLEAR THAT THE COURT' DID NOT EXPRESS ANY OPINION AS TO WHETHER SU CH A CLAIM WHICH IS MADE ON THE MANUFACTURE OF ARTICLES WHICH GO INTO THE CONSTRUCTION OF A DAM WOULD BE ADMISSIBLE OR NOT. OBVIOUSLY, IT WAS LEFT OPEN. 34. BE THAT AS IT MAY, THE ISSUE IN QUESTION HAS NOT BEEN EXAMINED BY THE ITAT FROM THIS ANGLE AT ALL. SIMPLY RELYING UPON ITS ORDER IN RESPECT OF THE ASSESSMENT YEAR 19 83-84 (WHICH WAS BASED ON THE HIGH COURT JUDGMENT IN N.C. BUDHIRAJA AND OVERRULED BY THE SUPREME COURT), THE T RIBUNAL ALLOWED THE APPEAL OF THE ASSESSEE HEREIN. WE ARE O F THE OPINION THAT THE MATTER NEEDS TO BE RE-EXAMINED BY THE ITAT KEEPING IN VIEW THE AFORESAID PARAMETERS LAID DOWN BY THE SUPREME COURT IN N.C. BUDHIRAJA. FOR WANT OF ADE QUATE MATERIAL BEFORE US, IT IS NOT POSSIBLE TO GIVE THE ANSWER BY OURSELVES. IN THAT VIEW OF THE MATTER, QUESTION NO. 1 REQUIRES NO ANSWER. ITA NOS. 2144/DEL/1989, 544/DEL/1989, 3186/DEL/1990,2192/DEL/1991, 525/DEL/1995 11 8. IN VIEW OF ABOVE OBSERVATIONS AND CONCLUSION OF HONBLE HIGH COURT ORDER (SUPRA) IN OUR HUMBLE UNDERSTANDING, TH E HONBLE HIGH COURT CATEGORICALLY HELD THAT THE ACTIVITY OF LYING RAILWAY LINE CANNOT AMOUNT TO ACTIVITY OF MANUFACTURE OR PRODUCE AN D THE SAME IS CONSTRUCTION ACTIVITY AND AN INCOME EARNED BY THE A SSESSEE THEREFROM IS NOT ELIGIBLE FOR DEDUCTION U/S 80HH AND 80I OF THE ACT. HOWEVER, THE HONBLE HIGH COURT IN THE LIGHT OF OBSERVATIONS OF THE HONBLE SUPREME COURT IN THE CASE OF N.C. BUDHIRAJA (SUPRA) AS REPRO DUCED IN PARA 37 OF THE HONBLE HIGH COURT ORDER (SUPRA) AND IN SUBSEQU ENT PARA 33 OBSERVED THAT THE HONBLE SUPREME COURT CATEGORICAL LY MENTIONED THAT THE ASSESSEE HAD CLAIMED BENEFIT OF SECTION 80HH AN D 80I OF THE ACT ON THE TOTAL VALUE OF THE CONSTRUCTION OF DAM AS SUC H AND NOT ON THE VALUE OF MANUFACTURED ARTICLES WHICH GO OR USED IN CONSTR UCTION OF DAM. THEIR LORDSHIP SPEAKING FOR HONBLE JURISDICTIONAL HIGH COURT IN THE SAME PARA 33 FURTHER OBSERVED THAT THE HONBLE SUPREME COURT IN THE DECISION OF N.C. BUDHIRAJA (SUPRA) DID NOT EXPRESS ANY OPINION A S TO WHETHER SUCH A CLAIM WHICH IS MADE ON THE MANUFACTURE OF ARTICLES WHICH GO OR USED FOR CONSTRUCTION, WOULD BE ADMISSIBLE OR NOT AND THE SA ME WAS LEFT OPEN. SUBSEQUENTLY, IN PARA 34 OF THE ACT THE HONBLE HI GH COURT SET ASIDE THE ISSUE TO THE TRIBUNAL FOR RE-EXAMINATION OF THE ISS UE IN VIEW OF THE ITA NOS. 2144/DEL/1989, 544/DEL/1989, 3186/DEL/1990,2192/DEL/1991, 525/DEL/1995 12 PARAMETERS LAID DOWN BY THE HONBLE APEX COURT IN T HE CASE OF N.C. BUDHIRAJA (SUPRA). 9. ON THE BASIS OF FOREGOING DISCUSSION IN OUR H UMBLE UNDERSTANDING THE SOLE QUESTION FOR OUR ADJUDICATION IS AS FOLLOWS : WHETHER THE ASSESEE IS ELIGIBLE FOR THE DEDUCTION U/S 80HH AND 80I OF THE ACT IN REGARD TO THE PROFITS ACCRUED TO IT FROM MANUFACTURING ACTIVITY, IF ANY, CARRIED OUT BY IT D URING THE RELEVANT FINANCIAL PERIODS ? 10. FROM LAST PARA AT PAGE 2-3 OF THE TRIBUNAL O RDER DATED 20.8.1997 FOR ASSTT. YEAR 1983-84 THE ACTIVITIES OF THE ASSES SEE COMPANIES HAS BEEN NOTED AS FOLLOWS :- THE ASSESSEE SUBMITTED ITS DETAILED REPLY TO THE S AID NOTICE VIDE ITS COMMUNICATION TO THE CIT DATED 24 TH OF MARCH, 1988. IN PARAGRAPH OF THIS COMMUNICATION IT HAS BEEN SUBMITT ED THAT THE COMPANY MANUFACTURES OR PRODUCES VARIOUS ARTICLES S UCH AS, BALLAST, CONCRETE SLEEPERS, SPECIALIZED MECHANICAL TRACK LAYING/RELAYING EQUIPMENTS, RAILWAY PANELS, STEEL R OOF PANELS, COLUMNS, GENTRY, GIRDERS, WIND GIRDLES, FRAMES, DRE SSINGS, ERECTION TOWERS, TACKLES ETC. TRACK LAYING EQUIPMENT, CANTIL EVER ASSEMBLIES, TERMINATION ASSEMBLIES, DROPPERS, MULTI-TRACK DIFFE RENT SIZES, STRUCTURING STEEL FOR DIFFERENT TYPES OF BRIDGES, R EEL WAGONS, FLAT TOP COACHES FOR PENTAGRAPH CHECKING, SPECIAL BEAT A TTACHMENT FOR PEDESTAL INSULATORS SIGNALS AND SIGNALS OPERATING S YSTEMS RELAYS RACKS, RELAYS, SIGNALING TRACK CIRCUITING POWER PAC KS, GROUND GEARS, ETC. ETC. ITA NOS. 2144/DEL/1989, 544/DEL/1989, 3186/DEL/1990,2192/DEL/1991, 525/DEL/1995 13 11. FURTHER FROM THE HONBLE HIGH COURT ORDER (SU PRA) PARA 2 WE OBSERVE THAT THE ASSESEE IS ENGAGED IN THE MANUFACT URING OF LARGE NUMBER OF ITEMS. THIS PARA 2 READS AS FOLLOWS : 2. THE ASSESSEE, NAMELY, INDIAN RAILWAY CONSTRUCTI ON COMPANY LTD. IS A PUBLIC SECTOR COMPANY INCORPORATED UNDER THE COMPANIES ACT AND IS UNDER THE ADMINISTRATIVE CONTROL OF THE MINISTRY OF RAILWAYS. IT IS ENGAGED IN THE MANUFACTURING OF LAR GE NUMBER OF ITEMS SUCH AS BALLAST, CONCRETE SLEEPERS, SPECIALIS ED MECHANICAL TRACK LAYING/RELAYING EQUIPMENTS, RAILWAY PANELS, S TEEL ROOF PANELS, COLUMNS, GENTRY, GIRDERS, WIND GIRDLES, FRAMES, DRE SSINGS? ERECTION TOWERS, TACKLES, ETC., TRACK LAYING EQUIPMENT, CANT ILEVER ASSEMBLIES, TERMINATION ASSEMBLIES, DROPPERS, MULTI -TRACK PORTAL STRUCTURES, STRUCTURE AND EARTH STEEL BONDS, EARTH MATS, JUMPERS OF DIFFERENT SIZES, DROP ARMS, SUPER MASTS FOR FEEDERS , MULTIPLE CROSS- CHANNELS OF DIFFERENT SIZES, DOUBLE .TRACK CANTILEV ERS, ALUMINUM BUS BARS, REEL WAGONS, FLAT TOP COACHES FOR PENTAGR APH CHECKING, SPECIAL BEAT ATTACHMENT FOR PEDESTAL INSULATORS, SI GNALS AND SIGNAL OPERATING SYSTEMS, RELAY RACKS, RELAYS, SIGNALLING TRUCK CIRCUITING POWER PACKS, GROUND GEARS ETC., ALL OF WHICH ARE US ED IN THE FABRICATION AND INSTALLATION OF RAILWAY TRACKS. 12. FROM THE ABOVE IT IS VIVID THAT BESIDES CON STRUCTION ACTIVITY AND LYING OF RAILWAY LINE THE ASSESSEE DURING THE RELEV ANT FINANCIAL PERIODS WAS ENGAGED IN MANUFACTURING ACTIVITY AS AN INDUSTR IAL UNDERTAKING. THESE FACTS HAVE NOT BEEN CONTROVERTED BY THE AO O R BY THE CIT(A) AND OBVIOUSLY ONUS LIES ON THE ASSESSEE TO SHOW THAT BE SIDES CONSTRUCTION AND LYING OF RAILWAYS LINE IT WAS ALSO ENGAGED INTO MANUFACTURING ACTIVITY ITA NOS. 2144/DEL/1989, 544/DEL/1989, 3186/DEL/1990,2192/DEL/1991, 525/DEL/1995 14 WHICH IS PERFORMED IN AN INDUSTRIAL UNDERTAKING, FO R ESTABLISHING CLAIM OF DEDUCTION U/S 80HH AND 80I OF THE ACT. 13. IF WE ANALYSE THE FACTS AND CIRCUMSTANCES O F THE PRESENT CASE THEN WE ARE OF OPINION THAT IN VIEW OF THE FACTS NO TED BY THE TRIBUNAL IN THE ORDER DATED 20.8.19991 (SUPRA) AND IN PARA 2 OF HONBLE HIGH COURT ORDER REMANDING THE ISSUE TO TRIBUNAL (SUPRA) IT IS AMPLY CLEAR THAT THE TRIBUNAL AS WELL AS HONBLE HIGH COURT NOTED AND OB SERVED THAT BESIDES CONSTRUCTION ACTIVITY THE ASSESSEE IS ALSO ENGAGED IN MANUFACTURING OF LARGE NUMBER OF VARIOUS ITEMS WHICH ARE USED IN THE INSTALLATION AND FABRICATION OF RAILWAY TRACKS. 14. WE DECLINE TO ACCEPT VEHEMENT CONTENTION OF LD. CIT(DR) THAT SINCE THE ENTIRE CLAIM OF THE ASSESSEE OF DEDUCTION U/S 80HH & 80I OF THE ACT HAS BEEN DISMISSED BY THE HIGH COURT THEN T HERE IS NO POINT TO DECIDE ELIGIBILITY OF SAME ON THE MANUFACTURING ACT IVITIES. BECAUSE IN OUR HUMBLE UNDERSTANDING OF THE RATIO OF HONBLE HIGH C OURT ORDER (SUPRA) IF THE HONBLE HIGH COURT WAS INCLINED TO DISMISS ENTI RE CLAIM OF THE ASSESSEE THEN THERE WAS NO NEED TO SEND THE CASE TO THE TRIBUNAL FOR RE- EXAMINATION OF THE ISSUE OF ALLOWABILITY OF CLAIM O F THE ASSESSEE IN ITA NOS. 2144/DEL/1989, 544/DEL/1989, 3186/DEL/1990,2192/DEL/1991, 525/DEL/1995 15 REGARD TO INCOME EARNED FROM MANUFACTURING ACTIVITI ES AS NOTED BY THEIR LORDSHIP IN PARA 31 TO 34 (AS REPRODUCED ABOVE) KEE PING IN VIEW THE PARAMETERS LAID DOWN BY HONBLE SUPREME COURT IN TH E CASE OF N.C. BUDHIRAJA (SUPRA). PER CONTRA, WE ARE IN AGREEMENT WITH THE CONTENTION OF LD. COUNSEL FOR THE ASSESSE THAT THE HONBLE HIG H COURT HELD THAT THE ASSESSEE IS NOT ENTITLED FOR DEDUCTION IN RESPECT O F INCOME ACCRUED TO IT FROM CONSTRUCTION ACTIVITIES SUCH AS LYING OF RAILW AY LINE / TRACKS. HOWEVER, SUBSEQUENTLY THE HONBLE HIGH COURT OBSERV ED THAT SINCE THE ISSUE OF ALLOWABILITY OF DEDUCTION U/S 80HH OF THE ACT WAS LEFT OPEN BY THE HONBLE SUPREME COURT IN THE CASE OF N.C. BUDHI RAJA (SUPRA) AS NOTED BY HONBLE HIGH COURT IN PARA 32 (AS REPRODUC ED ABOVE IN THIS ORDER), HENCE THE HONBLE HIGH COURT EXPLICITLY HE LD THAT THE CLAIM OF DEDUCTION U/S 80HH & 80I OF THE ACT IS ALLOWABLE FO R THE INCOME ACCRUED FROM MANUFACTURING ACTIVITIES AND THE CASE OF THE A SSESSEE WAS NOT EXAMINED BY THE TRIBUNAL FROM THIS ANGLE AT ALL. 15. ON THE BASIS OF FOREGOING DISCUSSION WE OBSER VE THAT THE ASSESSEE IS ALSO ENGAGED IN THE MANUFACTURING OF LARGE NUMBE R OF ITEMS USED WHICH ARE USED IN FABRICATION AND INSTALLATION OF R AILWAY LINES/TRACKS. THE LD. CIT(DR) POINTED OUT THAT THIS FACT WAS NOT DISC LOSED OR PLACED BEFORE ITA NOS. 2144/DEL/1989, 544/DEL/1989, 3186/DEL/1990,2192/DEL/1991, 525/DEL/1995 16 AO AND CIT BUT WE DECLINE TO ACCEPT THIS CONTENTION OF THE AS FROM PARA 3 AT PAGE 2 OF THE ORDER OF CIT DATED 7.2.1989 PASSED U/S 263 OF THE ACT, WE NOTE THAT VIDE WRITTEN SUBMISSIO N DATED 27.9.1988 THE ASSESSEE SUBMITTED THIS FACT THAT THE ASSESSEE COMPANY IS SUPPOSE TO MANUFACTURE VARIOUS ARTICLES LIKE CEMENT CONCRET E SLEEPERS, TRACK LYING EQUIPMENT, RAIL PENAL ETC. WHICH SHOWS THAT THE FAC T OF MANUFACTURING ACTIVITY WAS INFORMED TO LOWER AUTHORITIES AND THIS FACT WAS SUBSEQUENTLY NOTICED IN THE TRIBUNAL ORDER FOR ASSTT. YEAR 1983- 84 (SUPRA) AND HOBNBLE HIGH COURT ORDER (SUPRA) THUS IT WOULD BE NOT FAIR TO THE ASSESSEE TO SAY AS CONTENDED BY LD. CIT(DR) THAT TH E LD. STANDING COUNSEL TRIED TO MAKE OUT A NEW CASE BY PLACING FAC TUALLY INCORRECT ARGUMENTS, AS NOTED BY HONBLE HIGH COURT IN PARA 3 2 (SUPRA) THAT THE ASSESSEE WAS SEEKING BENEFIT OF DEDUCTION U/S 80HH & 80I OF THE ACT. ON THE STRENGTH OF THE FACT THAT THE ASSESSEE ALSO CARRIED MANUFACTURING ACTIVITY DURING THE RELEVANT PERIOD. 16. FURTHER KEEPING IN VIEW THE DICTA LAID DOWN BY HONBLE SUPREME COURT IN THE CASE OF N.C. BUDHIRAJA (SUPRA) WE RESPE CTFULLY NOTE THAT THEIR LORDSHIP SPEAKING FOR THE HONBLE APEX COURT CLEARLY HELD THAT THE ASSESSEE IS NOT ENTITLED FOR DEDUCTION U/S 80HH AND 80I OF THE ACT FOR ITA NOS. 2144/DEL/1989, 544/DEL/1989, 3186/DEL/1990,2192/DEL/1991, 525/DEL/1995 17 INCOME EARNED FROM CONSTRUCTION ACTIVITIES BUT THE IR LORDSHIP REFRAIN THEMSELVES FROM EXPRESSING ANY OPINION ON THE QUEST ION THAT WHAT WOULD BE THE POSITION IF THE RESPONDED HAD CLAIMED THE BENEFIT OF SECTION 80HH ON THE VALUE OF THE ARTICLES MANUFACTU RED OR PRODUCED BY IT WHICH ARTICLES HAVE GONE OR USED OR CONSUMED IN THE CONSTRUCTION. WHEN WE PROCEED TO ANALYSE AND RE-EXAMINE THE ISSUE IN VIEW OF THE DIRECTIONS TO TRIBUNAL BY HONBLE HIGH COURT ORDER (SUPRA) THEN WE NOTE THAT THIS ISSUE HAS TO BE RE-EXAMINED AND CONSIDERE D IN THE CONTEXT OF PROVISIONS OF SECTION 80HH OF THE ACT. THE CLAUSE ( I) OF SUB SECTION 2 AND SUBSECTION (I) SECTION 80HH OF THE ACT MANDATES AS FOLLOWS :- 21 80HH. (1) WHERE THE GROSS TOTAL INCOME OF AN ASSESSEE IN CLUDES ANY PROFITS AND GAINS DERIVED 22 FROM AN INDUSTRIAL UNDERTAKING 22 , OR THE BUSINESS OF A HOTEL, TO WHICH THIS SECTION APPLIES, THERE SHALL, IN ACCORDANCE WITH AND SUBJEC T TO THE PROVISIONS OF THIS SECTION, BE ALLOWED, IN COMPUTING THE TOTAL INCOME OF THE ASSES SEE, A DEDUCTION FROM SUCH PROFITS AND GAINS OF AN AMOUNT EQUAL TO TWENTY PER CENT THEREOF . XX XX XX 4) THE DEDUCTION SPECIFIED IN SUB-SECTION (1) SHALL BE ALLOWED IN COMPUTING THE TOTAL INCOME IN RESPECT OF EACH OF THE TEN ASSESSMENT YEARS BEGI NNING WITH THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH THE INDUSTRIAL UNDERTAKI NG BEGINS TO MANUFACTURE OR PRODUCE ARTICLES OR THE BUSINESS OF THE HOTEL STARTS FUNCTI ONING : PROVIDED THAT, X X XX XX 17. IN VIEW OF ABOVE PROVISION WE NOTE THAT T HE DEDUCTION U/S 80HH OF THE ACT IN RESPECT OF PROFIT AND GAINS FROM NEWL Y ESTABLISHED INDUSTRIAL UNDERTAKING IN BACKWARD AREAS WOULD BE GIVEN SUBJEC T TO FULFILLMENT OF CERTAIN CONDITIONS AS PROVIDED IN SUB SECTION (2) O F THE SAID PROVISION. ITA NOS. 2144/DEL/1989, 544/DEL/1989, 3186/DEL/1990,2192/DEL/1991, 525/DEL/1995 18 IN THE CASE IN HAND IT IS NOT THE CASE OF THE AO TH AT THE ASSESSEE IS NOT ENTITLED FOR DEDUCTION BECAUSE IT IS NOT FULFILLIN G CONDITIONS MENTIONED IN SUBSECTION (2) BUT THE CASE OF THE AO IS THAT THE ASSESSEE IS PRIMARILY ENGAGED IN THE BUSINESS OF CONSTRUCTION AND LYING OF RAILWAYS TRACK / LINE AND HENCE IT IS NOT ENTITLED FOR DEDUCTION OF U/S 80 HH & 80I OF THE ACT. THE CIT HAS IN ORDER U/S 263 OF THE ACT FOR AS STT. YEAR 1984-85 (SUPRA), IN PARA 4 DISMISSING SAID CLAIM OF THE ASS ESSEE IN REGARD TO MANUFACTURING ACTIVITIES, OBSERVED AS FOLLOWS :- 4. AT THE OUTSET, I WOULD LIKE TO POINT OUT TH AT THE DEPARTMENT HAS NEVER DOUBTED THE STATUS OF THE COMPANY AS NOT BEING AN INDUSTRIAL UNDERTAKING. THEREFORE, THE ARGUMENTS OF THE ASSESSEE COMPANY IN THIS CONTEXT ARE REDUNDANT. REGARDING TH E MANUFACTURING ACTIVITY AS LISTED IN THE REPLY, THE CLAIM OF THE ASSESSEE COMPANY IS STILL INADMISSIBLE BECAUSE THE END PRODUCT AFTER THE EXECUTION OF THE PROJECT IS A RAILWAY TRAC K OR A BRIDGE. AS ALREADY EXPLAINED, THEY DO NOT CONSTITUTE AN ARTICL E OR A THING BEING IMMOVABLE IN CHARACTER. THERE MIGHT BE A MINO R ACTIVITY OF MANUFACTURE OF ARTICLES BUT THE PURPOSE OF THIS ACT IVITY IS TO COMPLEMENT THE MAIN PROJECT I.E LAYING OF RAILWAY T RACK. IN VIEW OF THIS, THE ARGUMENTS OF THE ASSESSEE COMPANY ARE DEV OID OF ANY SUBSTANCE AND, THEREFORE, THE SAME ARE REJECTED. IT WOULD NOT BE OUT OF PLACE TO MENTION THAT WHILE FRAMING THE ASS ESSMENT FOR THE ASSESSMENT YEAR 1985-86, THE CLAIM OF THE ASSESSEE FOR DEDUCTIONS U/S 80-HH AND 80-I WAS NOT ALLOWED TO THE ASSESEE C OMPANY BY THE ASSESSING OFFICER ON SIMILAR GROUNDS. THIS ORDE R HAS BEEN CONFIRMED BY THE CIT(A). 18. IN VIEW OF ABOVE OBSERVATION IT IS VIVID T HAT THE FACTUM OF SAID MANUFACTURING ACTIVITIES ARE BEING UNDERTAKEN BY TH E ASSESSEE WAS WELL ITA NOS. 2144/DEL/1989, 544/DEL/1989, 3186/DEL/1990,2192/DEL/1991, 525/DEL/1995 19 KNOWN TO AUTHORITIES BELOW BUT THEY DENIED DEDUCTIO N NOT ONLY ON THE INCOME FROM CONSTRUCTION ACTIVITY BUT ALSO DISMISSE D PRAYER OF DEDUCTION ON MANUFACTURING ACTIVITIES. WE ARE NOT AGREE WITH THE CONTENTION THE LD. CIT(A) AND SUBSEQUENTLY RAISED BY LD. CIT(DR) T HAT THERE MIGHT BE A MINOR ACTIVITY OF MANUFACTURE OF ARTICLES BUY THE PURPOSE OF THE ACTIVITY IS TO COMPLETE THE MAIN PROJECT OF LAYING RAILWAYS TRACK / LINE AS WHEN THE PROVISIONS OF THE ACT MANDATES THAT THE AS SESSEE IS ELIGIBLE FOR DEDUCTION PERTAINS TO INCOME ACCRUED FROM MANUFACTU RING ACTIVITIES THEN IN OUR CONSIDERED VIEW, THE MANUFACTURING ACTIVITY WAS AN INTEGRAL PART OF ENTIRE ACTIVITY AND NAMELY FOR THE REASON THAT S UCH AN ACTIVITY WAS NOT VERY SIGNIFICANT COMPARED TO TOTAL TURNOVER OF THE ASSESSEE IT COULD NOT BE SAID THE ASSESSEE NOT ENGAGED IN MANUFACTURING A CTIVITY. IN THE PROVISION OF 80HH OF THE ACT, AS NOTED ABOVE, IT IS MANDATED THAT WHERE THE TOTAL GROSS INCOME OF AN ASSESSEE INCLUDES ANY PROFITS AND GAINS DERIVED FROM AN INDUSTRIAL UNDERTAKING THEN THIS SE CTION OF DEDUCTION APPLIES. IN THE PRESENT CASE ALSO THE GROSS TOTAL I NCOME OF THE ASSESSEE INCLUDES INCOME FROM MANUFACTURING ACTIVITY OF AN I NDUSTRIAL UNDERTAKING IRRESPECTIVE OF THE FACT THAT THE ACTIVITIES IS BEI NG CARRIED OUT EITHER AT SMALL SCALES OR LARGE SCALE AND SUCH ACTIVITY WAS S IGNIFICANT OR NOT ITA NOS. 2144/DEL/1989, 544/DEL/1989, 3186/DEL/1990,2192/DEL/1991, 525/DEL/1995 20 COMPARED TO TOTAL TURNOVER OF THE ASSESSEE INCLUDIN G INCOME OF THE BUSINESS WHICH IS NOT ELIGIBLE FOR SUCH DEDUCTION. 19. IN VIEW OF ABOVE WE HOLD THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80HH OF THE ACT ON THE INCOME FROM MA NUFACTURING ACTIVITY. WE MAY POINT OUT THAT THE LD. COUNSEL FOR THE ASSESSEE FAIRLY ACCEPTED THAT THE ASSESSEE HAS NOT MAINTAINED SEPAR ATE BOOK OF ACCOUNTS FOR CONSTRUCTION AND MANUFACTURING ACTIVIT IES HENCE THESE DETAILS HAVE NOT BEEN PLACED ON RECORD. HE FURTHER SUBMITTED THAT IF OPPORTUNITY IS ALLOWED THEN THE CALCULATION IN REGA RD TO INCOME FROM MANUFACTURING ACTIVITIES MAY BE PLACED BEFORE THE C OMPETENT AUTHORITY TO DISCHARGE ONUS CAST UPON THE ASSESSEE TO SUBSTAN TIATE ITS CLAIM OF DEDUCTION. THE LD. CIT(DR) HAS OBJECTED TO ABOVE SUB MISSIONS OF ASSESSEE BY CONTENDING THAT WHEN THERE IS NOT SEPAR ATE ACCOUNTS THEN AND DETAILS AND AMOUNT OF INCOME FROM SMALL AND INS IGNIFICANT MANUFACTURING ARE NOT ON RECORD THEN IT WOULD BE FU TILE EXERCISE TO GRANT AN OPPORTUNITY TO ASSESSEE TO SUBMIT THE SAME AT TH IS BELATED STAGE HENCE, CLAIM OF THE ASSESSEE SHOULD BE DISMISSED. 20. ON CAREFUL CONSIDERATION ABOVE IT WAS THE D UTY AND ONUS ON THE SHOULDER OF THE ASSESSEE TO SHOW THAT HE WAS ALSO E NGAGED IN ITA NOS. 2144/DEL/1989, 544/DEL/1989, 3186/DEL/1990,2192/DEL/1991, 525/DEL/1995 21 MANUFACTURING ACTIVITIES AND THE GROSS TOTAL INCOME DECLARED BY IT ALSO INCLUDE INCOME FROM MANUFACTURING ACTIVITY AND ON T HE BASIS OF FOREGOING DISCUSSION WE HAVE HELD THAT THE ASSESSEE IS ENTITLED FOR DEDUCTION U/S 80HH AND 80I OF THE ACT ON THE PART O F INCOME EARNED FROM MANUFACTURING ACTIVITIES. HOWEVER, FOR WANT OF ADEQUATE MATERIAL ON THE RECORD OF THE TRIBUNAL, IT IS NOT POSSIBLE F OR US TO CALCULATE QUANTUM OF DEDUCTION AND THUS WE FIND IT APPROPRIAT E TO SEND THE ISSUE FOR LIMITED PURPOSES I.E. FOR CALCULATION OF DEDUCT ION U/S 80HH ON THE INCOME EARNED FROM MANUFACTURING ACTIVITIES DURING THE RELEVANT PERIODS UNDER CONSIDERATION FOR ALL FIVE ASSESSMENT YEARS. HENCE, WE DIRECT THE AO TO CALCULATE THE QUANTUM OF DEDUCTION FOR ALL TH E FIVE ASSESSMENT YEARS UNDER CONSIDERATION. 21. IN THE RESULT, ALL THE APPEALS OF THE ASS ESSEE ARE ALLOWED WITH THE DIRECTIONS TO THE AO AS MENTIONED HEREINABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 1 ST JULY, 2016. SD/- SD/- (L.P. SAHU) (CHANDRA MOHAN GAR G) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED 1 ST JULY, 2016 VEENA COPY OF ORDER FORWARDED TO: ITA NOS. 2144/DEL/1989, 544/DEL/1989, 3186/DEL/1990,2192/DEL/1991, 525/DEL/1995 22 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR BY ORDER ASSTT REGISTRAR, ITAT