| Case ID |
e9f9c82e-a74e-4e44-9e54-5797467b9fdc |
| Body |
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| Case Number |
C.A. Nos. 4238 to 4240 of 1983 |
| Decision Date |
Sep 07, 1993 |
| Hearing Date |
|
| Decision |
The Supreme Court ruled that the construction activities undertaken by the respondents, including the construction of a dam, do not fall under the definition of 'manufacture or production of an article' as per the Income Tax Act. The court emphasized that the activity of constructing a dam cannot be characterized as manufacturing since a dam is not a movable article that can be sold. The court reversed the decisions of the lower courts that had favored the respondents, stating that the processes involved in construction do not constitute 'manufacture' under the relevant sections of the Income Tax Act. The court also highlighted the need for a reasonable interpretation of the legislative language, which does not support the view that construction activities qualify for the benefits under the Income Tax provisions intended for manufacturing industries. |
| Summary |
In this landmark case decided by the Supreme Court of India, the court addressed the interpretation of various sections of the Income Tax Act, particularly sections 80HH and 32-A, concerning the eligibility for tax benefits related to manufacturing and construction activities. The court ruled against the idea that the construction of a dam constitutes manufacturing, thus denying the tax relief claims made by several construction firms. This decision clarifies the distinction between construction and manufacturing, emphasizing that activities like dam construction do not equate to the production of marketable goods. The judgment is significant for tax law and the construction industry, as it sets a precedent regarding what constitutes an industrial undertaking under the Income Tax Act. The case has implications for tax planning strategies in the construction sector, highlighting the need for careful consideration of the legislative definitions of industrial activities and their tax implications. |
| Court |
Supreme Court of India
|
| Entities Involved |
N.C. Budharaja & Co.,
PRESSURE PILING CO. (INDIA) P. LTD.,
SHANKAR CONSTRUCTION CO.,
SURESH MALPANI & CO.,
BUILDMET P. LTD.,
UNIVERSAL BOREMET AGENCIES
|
| Judges |
B.P. Jeevan Reddy,
N. Venkatachala
|
| Lawyers |
B.B. Ahuja, Senior Advocate,
R.K. Mehra,
Ms. Mana Chakraborty,
A.M. Kanwilkar, Advocate,
Joseph Vellapally, Senior Advocate,
Mukul Mudgal
|
| Petitioners |
COMMISSIONER OF Income Tax
|
| Respondents |
PRESSURE PILING CO. (INDIA) P. LTD.,
SHANKAR CONSTRUCTION CO.,
SURESH MALPANI & CO,
BUILDMET P. LTD,
UNIVERSAL BOREMET AGENCIES,
N.C. Budharaja & Co.
|
| Citations |
1995 SLD 3,
1995 PTD 95,
(1993) 204 ITR 412
|
| Other Citations |
CIT v. Pressure Piling Co. (India) P. Ltd. (1980) 126 ITR 333,
Shankar Construction Co. v. CIT (1991) 189 ITR 463,
Suresh Malpani and Co. v. CIT (1992) 196 ITR 104,
CIT v. Buildmet P. Ltd. (1993) 200 ITR 160
|
| Laws Involved |
Income Tax Act, 1961
|
| Sections |
80HH,
32-A
|