JUDGMENT
Janarthanam, J.
1. The assessee-Tamil Nadu Heat Treatment and Fetting Services (P.) Ltd., Madras 10, it is said, is engaged in the business of receiving from its clients untreated crankshafts, forgings, castings, etc., and subjecting them to heat, in order to toughen them to the requisite standards to be sold in the market for the purpose of the same being utilised in automobiles.
2. For the assessment year 1991-92, the assessee, it appears, claimed deduction in respect of profits and gains under Sections 80HH and 80-I of the Income-tax Act, 1961 (Act No. 43 of 1961) (for short “the Income-tax Act“).
3. The assessing authority rejected the claim of the assessee on the ground that no manufacturing activity was done by it.
4. The first appellate authority, however, allowed the claims of the assessee.
5. The Tribunal, in the appeal filed by the Revenue, granted relief to the assessee, following its earlier order, relatable to the same assessee for the assessment years 1984-85 to 1986-87.
6. Against the said order of the Tribunal, the Revenue filed an application for reference under Section 256(1) of the Income-tax Act, requiring the Tribunal to state a case and refer the following questions of law for the opinion of this court :
“(1) Whether, on the facts and in the circumstances of the case, the Tribunal had valid material to hold and is right in law in holding that the assessee is engaged in the manufacturing activity ?
(2) Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in holding that the assessee is entitled for deduction under Sections 80HH and 80-I of the Income-tax Act, 1961 ?”
7. The Tribunal rejected the said application giving rise to the present action–Tax Case Petition No. 663 of 1997 by the Revenue requiring the Tribunal to state a case and refer the questions of law, as stated above, to this court for its opinion.
8. When this matter listed for hearing was taken up this day (February 24, 1998), Mrs. Chitra Venkataraman, the learned counsel representing Mr. C. V. Rajan, the learned junior standing counsel for income-tax cases representing the Revenue and Mr. P. P. S. Janarthana Raja, the learned counsel appearing for the assessee, submitted that instead of calling for a
statement of the case from the Tribunal and directing it to refer the questions of law, as set out above, for the opinion of this court, it would be better, in the fitness of things and interests of one and all concerned, to straightaway answer those questions, as if those questions were referred to this court for its opinion, inasmuch as the factual matrix is sufficient and adequate enough, besides the same not being disputed.
9. The pivotal point, underlying both the questions is as to whether the activity carried on by the assessee, namely, the business of receiving from its client untreated crankshafts, forgings, castings, etc., and subjecting them to heat treatment, in order to toughen them to the requisite standards, so that they could be sold in the market, is a manufacturing activity, entitling it to claim the deductions, as contemplated under Sections 80HH and 80-I of the Income-tax Act.
10. In the forenoon session of this day (February 24, 1998), we have disposed of Tax Cases Petitions Nos. 592 to 594 of 1997–CIT v. Tamil Nadu Heat Treatment and Petting Services (P.) Ltd. (No. 1) [1999] 238 ITR 529 (Mad)), pertaining to the same assessee relatable to the assessment years 1984-85 to 1986-87, wherein, we have held, by way of elaborate discussions, that the activity carried on by the assessee is one of manufacturing activity. The rationale or reasoning projected therein will hold good here also and in that view of the matter, we are of the view that the assessee’s activity cannot be any one, other than the one relatable to manufacturing activity entitling it to claim necessary deductions under the sanguine provisions adumbrated under Sections 80HH and 80-I of the Income-tax Act. These questions are answered accordingly.
11. In fine, the activity of the assessee is a manufacturing activity entitling it to claim deduction under Sections 80HH and 80-I of the Income-tax Act.
12. This tax case petition is, thus, disposed of. There shall, however, be no order as to costs, in the circumstances of the case.