INCOME TAX ACT, 1961

Section 80-I Section 80-IA

Deduction under section 80-I/80-IA - Allowability - AO denied deduction in respect of profits derived from supply of processed natural gas at various customer terminals alleging no manufacturing activity -

Assessee was engaged in business of production/processing transmission and distribution of various gases. Assessee claimed deduction under sections 80-IA/80-I and 80HH on production of LPG and lean gas undertaken at LPG plants and various customer terminals by treating the same as separate and independent units. AO denied deduction in respect of profits derived from supply of processed natural gas at various customer terminals on the ground that activities undertaken by assessee at its customer terminals did not constitute 'manufacture or production of any article or thing' so as to be eligible for deduction under sections 80-I/80-IA. Held: Extensive processing activities undertaken by assessee at customer terminals to make lean gas and natural gas marketable and fit for use, clearly constituted 'manufacture and, therefore, deduction under sections 80-I/80-IA was available as regards customer terminals.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 1996-97

INCOME TAX ACT, 1961

Section 80-I Section 80-IA Section 80HH

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