Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is justified in law in holding that the manufacture of yam would amount to manufacture of textile within the meaning of Entry 21 of the Ninth Schedule and therefore the Assessee is entitled to higher rate of initial depreciation?
32 and 33 of the Fifth Schedule of the Income Tax Act were companysidered, upheld the order passed by the First Appellate Authority Revenue, therefore, sought for reference of the aforesaid question to the High Court which was referred by the Tribunal under Section 156 1 but me same was also answered by the High Court against the Revenue.
This appeal is for the assessment year 1976 77 The respondent Assessee is a firm engaged in the business of manufacture of yam.
The Commissioner of Income Tax Appeals upheld the order of Assessing Authority and held yarn is companyered under Item No.
21 thus assessee is entitled for the grant of higher rate of initial depreciation.
Yam was the material or companyponent with which the textiles are manufactured and since in Item No, 21, word textile is used, manufacture of yam is number companyered under Item No.
yarn falls under Item No.21 of Ninth Schedule to the Income Tax Act, I961 The view of the Assessing Authority as supported by the Inspecting Assistant Commissioner was that the manufacture of companyton yarn did number amount to manufacture of textile.
23 Aggrieved by the same, the Revenue preferred an appeal before the Income Tax Appellate Tribunal.
where Item Nos.
The Tribunal with reference to its earlier decision and also with reference to the decision of the Calcutta High Court in the case of Commissioner of Income Tax, West Bengal V v. Shalimar Rope Works P. Ltd, 1980 125 ITR 331 Cal. ,
1999 Supp 5 SCR 365 The Judgment of the Court was delivered by MISRA, J. This appeal challenges the decision of the Madras High Court in reference under Section 256 1 of the Income Tax Act, 1961, in which the following question was referred by the Income Tax Appellate Tribunal at the instance of Revenue which was adjudicated against it.
It claimed higher rate of initial depreciation on the machinery employed in the manufacture of yarn on the ground that its manufacturing product, viz.,
The Appellate Authority relied upon a decision of the Income Tax Appellate Tribunal in the case of Gopichand Textile Mills Limited v. Income Tax Officer in which it was held that manufacturing of yarn answers fully to the description referred in Item No.
1.4.75 but has been omitted by the Taxation laws Amendment of Miscellaneous Provisions Act, 1986, w.e,f. 1.4.1988.
The present appeal is directed against this order passed by the High Court.
