Skip to content


Y. A. C. Sand Dredging Co. Vs. Eighth Income-tax Officer. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtMumbai High Court
Decided On
Case NumberIT APPEAL NO. 2039 (BOM.) OF 1982 [ASSESSMENT YEAR 1976-77]
Reported in[1984]10ITD452(Mum)
AppellantY. A. C. Sand Dredging Co.
RespondentEighth Income-tax Officer.
Excerpt:
- code of criminal procedure, 1973 [c.a. no. 2/1974]. section 41: [ swatanter kumar, cj, smt ranjana desai & d.b. bhosale, jj] arrest of accused - held, a police officer or a person empowered to arrest may arrest a person without intervention of the court subject to the limitations specified under the provisions of the code. the provisions of section 41 of the code provides for arrest by a police officer without an order from a magistrate and without a warrant. a distinct and different power under section 44 of the code empowers the magistrate to arrest or order any person to arrest the offender. under section 44 of the code, that power is vested in the court of the magistrate when an offence is committed in his presence. if the legislature has taken care of providing such specific power..........from which the product is made, which is normally called raw material but in the present case, sand is not manufactured by the appellant out of something else. the sand is mixed up with other materials such as boulders, etc., and in order to reach the sea bed the harder areas are to be negotiated and this is not something more than negotiating the water surface above the harder layers. in order to scoop out the sand to the surface dredgers are used only to separate it from other things. this process, as rightly pointed out by shri joy, the departmental representative, is nothing more than separating the chaff from the grain. there is no manufacturing of any product out of something else. the sand is brought up to the surface in the very form it is found after extricating the same.....
Judgment:
ORDER

Per Shri A. V. Balasubramaniam, Judicial Member-The appellant herein complains that the authorities below have improperly rejected its claim made under section 80J of the income-tax Act, 1961.

2. The appellant is owning dredgers with the help of which sand is removed from the bottom of sea and sold thereafter. The dredgers, sometimes, are also leased to others. A claim was made before the ITO under section 80J which was rejected by the authority on the reason that there is no manufacturing process carried out by the appellant and that, it is not an industrial undertaking within the provision mentioned above. This view was accepted by the AAC in the appeal preferred by the appellant.

3. It was contended on behalf of the appellant that harder areas involving rocks, boulders, etc., beneath the water are to be crushed in order to reach the sand and this process is a manufacturing one. We were asked to refer CIT v. M. R. Gopal : [1965]58ITR598(Mad) and Singh Engg. Works (P.) Ltd. v. CIT : [1979]119ITR891(All) in support of the argument.

4. The authorities referred to in earlier para do not strengthen the hands of the appellant for the following reasons. In the first case, it was a concern where boulders were being crushed into small pieces with the aid of machinery and that was held to be an industrial undertaking. The other was a case of manufacturing iron rods and bars out of ingots manufactured from the scraps. When a thing is manufactured, there must be another thing from which the product is made, which is normally called raw material but in the present case, sand is not manufactured by the appellant out of something else. The sand is mixed up with other materials such as boulders, etc., and in order to reach the sea bed the harder areas are to be negotiated and this is not something more than negotiating the water surface above the harder layers. In order to scoop out the sand to the surface dredgers are used only to separate it from other things. This process, as rightly pointed out by Shri Joy, the departmental representative, is nothing more than separating the chaff from the grain. There is no manufacturing of any product out of something else. The sand is brought up to the surface in the very form it is found after extricating the same from other harder portions beneath the water column. The sand is not manufactured at all for it is found in the very form at the rock bottom of the sea.

5. We agree with the view of both the ITO and the IAC in concluding that there is no manufacturing of sand by the appellant to become entitled to the benefit of section 80J.

6. In the result, we dismiss the appeal and it is, accordingly, ordered.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //