Meaning of “Begins to manufacture or produce article”

The meaning of begins to manufacture or produce article under section 80J of the Income Tax Act is not defined in the act itself. But we can take guidance from decisions by various high courts. Here are excerpts of courts orders in which the Hon’ble High Court tried to explain the meaning of begins to manufacture or produce article.

meaning of begins to manufacture or produce article

Meaning of begins to manufacture or produce article defined by court

The phrase ‘begins to manufacture or produce article’ used in section 80J of the Income Tax Act came up before hon’ble Allahabad high court in CIT vs. Himalyan Magnesite Ltd.[2005] 144 Taxman 830/276 ITR 56 (All.) and it explained.

Meaning : The word ‘begins to manufacture or produce article’ are indicative of legislative intention. These words do show that manufacturing or production of article should be on regular basis, i.e., In the sense of commercial production with a view to sell the manufactured goods or articles in the market.

Section 80J of Income Tax Act

Deduction in respect of profits and gains from newly established industrial undertakings or ships or hotel business in certain cases.

80J. [Omitted by the Finance (No. 2) Act, 1996, w.r.e.f. 1-4-1989.]

In this article, you can get guidance from high courts on the meaning of begins to manufacture or produce article under section 80J of the Income Tax Act.

Updated up to Finance Act 2021

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