ORDER

1. HEARD THE LEARNED COUNSEL FOR THE PARTIES.

2. DELAY CONDONED.

3. LEAVE GRANTED.

4. THE FOLLOWING QUESTION RAISED AT THE INSTANCE OF THE REVENUE IN AN APPEAL BEFORE THE BOMBAY HIGH COURT WAS ANSWERED IN FAVOUR OF THE ASSESSEE:

"WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, ITAT WAS JUSTIFIED IN HOLDING THAT THE ASSESSEE IS ENTITLED TO DEDUCTION OF INVESTMENT ALLOWANCE UNDER SECTION 32-A OF THE INCOME TAX ACT, 1961 IN RESPECT OF MACHINERY USED IN MINING ACTIVITY IGNORING THE FACT THAT THE ASSESSEE IS ENGAGED IN EXTRACTION AND PROCESSING OF IRON ORE, NOT AMOUNTING TO MANUFACTURE OR PRODUCTION OF ANY ARTICLE OR THING?"

5. THE HIGH COURT, WHILE DISMISSING THE APPEAL PREFERRED BY THE REVENUE, HELD THAT EXTRACTION AND PROCESSING OF IRON ORE DID NOT AMOUNT TO "MANUFACTURE". HOWEVER, IT CAME TO THE CONCLUSION THAT EXTRACTION OF IRON ORE AND THE VARIOUS PROCESSES WOULD INVOLVE "PRODUCTION" WITHIN THE MEANING OF SECTION 32-A(2)(B)(III) OF THE INCOME TAX ACT, 1961 (FOR SHORT "THE ACT") ENTITLING THE ASSESSEE TO INVESTMENT ALLOWANCE UNDER THE SAID PROVISION.

6. ACCORDING TO THE REVENUE, WHICH IS IN APPEAL BEFORE US, THE HIGH COURT ERRED IN ITS CONCLUSION AS IT FAILED TO CO