J.N Sarma, J.:— This appeal has been filed against the order dated 31.7.2000 passed by the Income Tax Appellate Tribunal, Gauhati Bench, Guwahati in ITA Nos. 501.Gau/97 and 276.Gau/98 for the assessment years 1992–93 and 1993–94.
2. The question which arose before the Tribunal was that whether the assessee is entitled to claim allowance under Sections 80HH and 80-I of the Income Tax Act on income earned through computer documentation service rendered to the customers. Sri U. Bhuyan, Learned Advocate for the appellant in support of his submission on computer documentation relies on a Division Bench judgment of this court reported in 251 ITR Page 683 (Commissioner of Income Tax v. Down Town Hospital Ltd.) wherein this court discussed in detail what is manufacture and at page 689 relying on the Supreme Court decision a passage was quoted from the Permanent Edition of Words and Phrases, volume 26, page 795, that passage is again quoted below:
“‘Manufacture’ implies a change, but every change is not manufacture and yet every change of a an article is the result of treatment, labour and manipulation. But something more is necessary and there must be transformation; a new and different article must emerge having a distinctive name, character or use.”
3. On the other hand, Mr. Bhuyan, learned Advocate for the appellant with his usual fairness and magnanimity produced before us a Division Bench decision of the Calcutta High Court reported in 207 ITR Page 17 (Commissioner of Income Tax v. Shaw Wallace & Co. Ltd.) wherein it was held as follows with regard to the computer:
“In our view, having regard to the nature and function of the computer and the data processing system, it cannot be said that they are office appliances. An industrial company is a company engaged in the manufacture or processing of goods. “Data-processing” means the converting of raw data to machine-readable form and its subsequent processing (as storing, updating, combining, rearranging or printing out) by a computer. “Computer” means “one that computer; specifically a programmable electronic device that can store, retrieve, and process data”. There cannot to be any doubt that raw data cannot be equated with the result derived. It is defferent in form and substance.
We are, therefore, of the view that the computer division is an industrial undertaking which satisfied the conditions mentioned in section 32A(2)(b)(iii) of the Income-tax Act, 1961.”
4. We respectfully agree with the judgment of the Division Bench and we hold that computer if it is used for the purposes as mentioned in the judgment certainly it will be an industrial undertaking and in such a situation it will be entitled to claim deduction.
5. The following are the substantial questions of law which were framed:
(i) Whether on the facts and in the circumstances of the case the Tribunal was correct in law in holding that no separate accounts are required to be maintained for claiming deductions under Sections-80HH and 80-I of the Income-tax Act, 1961?
(ii) Whether on the facts and in the circumstances of the case, is not the decision of the Tribunal perverse in holding that deductions under Sections 80HH and 80-1 of the Income-Tax Act, 1961 are allowable on income earned through computer documentation service rendered to the customers when the assessee did not fulfil the condition laid down to qualify such deduction?
6. Regarding first question we find that the law does not require that a separate accounts are required to be maintained for claiming deduction under Sections 80HH and 80-I of the Income Tax Act, 1961. Of course, there is a provision of sub-section (5) which is quoted below:
“(5) Where the assessee is a person other than a company or a co-operative society, the deduction under sub-section (1) shall not be admissible unless the accounts of the industrial undertaking or the business of the hotel for the previous year relevant to the assessment year for which the deduction is claimed have been audited by an accountant as defined in the Explanation below sub-section (2) of section 288 and the assessee furnished, along with his return of income, the report of such audit in the prescribed form duly signed and verified by such accountant.”
7. That will not help the revenue in this case as in this case the assessee is a company.
8. Regarding the second question already as indicated above, we have decided it against the revenue.
9. In that view of the matter, this appeal shall stand dismissed.
10. Heard, Mr. U. Bhuyan, learned Advocate for the appellant and none appears for the respondent.