Commissioner of Income-tax Vs. Indore Plastics P. Ltd. - Court Judgment |
| Direct Taxation |
| Madhya Pradesh High Court |
| Jul-18-2002 |
| M.C.C. No. 566 of 1994 |
| Deepak Verma and N.K. Jain, JJ. |
| [2003]262ITR163(MP) |
| Income Tax Act, 1961 - Sections 256(2), 269SS and 271D |
| Commissioner of Income-tax |
| indore Plastics P. Ltd. |
| R.L. Jain, Adv. |
| Sanjay Patwa, Adv. |
| Application dismissed |
- section 2(f): [dipak misra, k.k. lahoti & rajendra menon, jj] service tax - packaging and bottling of liquor whether amounts to manufacture within meaning of section 2(f) of central excise act 1944? finance act 932 of 1994), section 65 (76 b) (as amended on 16.6.2005) - held, the first limb of the inclusive definition of the manufacture under section 2(f) of central excise act has a very wide connotation. as the definition clause lays down an inclusive facet, the term manufacture has to be construed in a natural and plain manner and would include any process incidental or ancillary to the completion of a manufactured product. keeping in view the context in which the term manufacture has been used, it would take in its fold incidental and ancillary process in the manufacture or finishing of any manufactured product. it does not leave any room for doubt that an allied process should be integral and inextricable part of manufacture of completeness and presentability of the manufactured product. section 65(76b) of finance act used the words but it does not include. thus it is a definition which has the inclusive as well as exclusive facet. by virtue of the same it may include..........director of the respondent-company. according to the assessing authority as also the commissioner of income-tax (appeals), the said payment was in contravention of section 269ss of the income-tax act and the assessee was, therefore, liable to pay penalty. the penalty so imposed was, however, vacated in second appeal by the tribunal on the finding that the said payment was not by way of deposit or loan, but towards adjustments of the amount drawn by shri khosla, from the company's account. we find ourselves in full agreement with the tribunal that the aforesaid finding is a finding of fact, and, therefore, does not give rise to any question of law to be answered by this court.4. we, therefore, decline the prayer and dismiss the application.
1. Heard Mr. R.L. Jain, the learned counsel for the applicant-department, and Mr. Sanjay Patwa, the learned counsel for the respondent-assessee.
2. This is an application under Section 256(2) of the Income-tax Act, 1961, as it stood before the amendment of 1999, praying for calling reference from the Income-tax Appellate Tribunal, Indore Bench, Indore, for resolution of the question, as extracted in para. 4 of the application, which is said to be a question of law.
3. The dispute is regarding payments made to the assessee in instalments, by one Shri R.C. Khosla, in the relevant assessment year, amounting to Rs. 2,31,390. Apparently, Shri Khosla was the promoter and managing director of the respondent-company. According to the assessing authority as also the Commissioner of Income-tax (Appeals), the said payment was in contravention of Section 269SS of the Income-tax Act and the assessee was, therefore, liable to pay penalty. The penalty so imposed was, however, vacated in second appeal by the Tribunal on the finding that the said payment was not by way of deposit or loan, but towards adjustments of the amount drawn by Shri Khosla, from the company's account. We find ourselves in full agreement with the Tribunal that the aforesaid finding is a finding of fact, and, therefore, does not give rise to any question of law to be answered by this court.
4. We, therefore, decline the prayer and dismiss the application.