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IN THE HIGH COURT OF KARNATAKA AT BANGALORE
K. Shivashankar Bhat and R. Ramakrishna, JJ.
Commissioner of Income Tax —Appellant
Vs.
Mysore Minerals Ltd. —Respondent
Income Tax Referred Cases No. 92 of 1992
Decided on : 28-10-1992
Investment Allowance - Granite Extraction - The court held that extraction of granite from a quarry, cutting it into various sizes, and polishing it constitutes manufacture or production of an article or thing, entitling the taxpayer to investment allowance under section 32A of the Income Tax Act, 1961.
Fact of the Case:
The court considered whether the extraction of granite from a quarry and subsequent processing qualified for investment allowance under section 32A of the Income Tax Act, 1961.
Finding of the Court:
The court found that the extraction and processing of granite constituted manufacture or production of an article or thing, entitling the taxpayer to investment allowance under section 32A.
Issues: The key issue was whether the extraction and processing of granite qualified for investment allowance under section 32A of the Income Tax Act, 1961.
Ratio Decidendi: The court applied the principle established in the case of Shankar Construction Co. Vs. Commissioner of Income Tax, (1991) 189 ITR 463 KAR, and held that the extraction and processing of granite constituted manufacture or production of an article or thing.
Final Decision: The court answered the question in the affirmative, ruling in favor of the taxpayer and against the Revenue.
K. Shivashankar Bhat, J.—The question referred under section 256(1) of the Income Tax Act, 1961, in respect of the assessment year 1982-83 reads thus :
"Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that extraction of granite from a quarry and cutting the same into various sizes and polishing them, was one of manufacture or production of an article or thing, to be entitled to investment allowance under section 32A ?"
2. The principle applicable is governed by the ratio of the decision in Shankar Construction Co. Vs. Commissioner of Income Tax, (1991) 189 ITR 463 KAR In fact, in another case, this court has already considered the applicability of the principle to the case of extraction of granite.
3. Following the aforesaid decision, the question is answered in the affirmative and against the Revenue.
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