1. {{BLUER PAGE}} oD !Lot all)9MENT nil VENKATA RAMA' Rftit117, J.---In this application filed under sgioin56(2) of the Income Act, IOgY,Ihe Revenue seeks reference of the hito questions for the decision of this Court: ''1.6 3vi ion! 13.114,/ 1)3 e.f:, 1-F"(I), Whether, on the facts and in the circumstances of Ithe:Cate:qhe!
2. Tribunal is correct in law in allowing the amount of Rs,2,53,700 giurti, incurred towards boarding, lodging and education of the 32 orphans adopted by the assessee-company as AJbusiness expenditure?
(2) Whether, on the facts and in;therc*tymIstaRces of 4e caw), the Tribunal is correct in law in holding that the assessee,,is entige,d to investment allowance of Rs,2,24,52,331 on the new plant and machinery installed in the assessee's business of extracting coal?" We are ofAhle,view that the first question raises a debatable point of law. No doubt, there is a finding of the Tribunal that the expenditure incurred for the lodging, boarding and education of 32 orphans pursuant to the appeal made by the State Government, as a measure of cyclone relief, is connected with the business expenditure inasmuch as those orphans were imparted training and absorbed in the service of the company. But it is to be noted that an activity undertaken purely as a philanthropic measure which has no connection with the company's business activity as'such, cannot be treated as business expenditure. But, at the same time, if activity undertaken by the assessee-company in rehabilitating the orphan children with a view to eventually absorb them into the company's service is not only a philanthropic act but also prompted by considerations of business or business expediency, the findingviot the Tribunal viti. Be justified. But .Prima facie, from the discussion of the Tribunal it IS 110t clear as to whether the assessee-company was prompted by a business motive in adopting the orphans..The Tribunal surmised that if the expenditure incurred for the training imparted to them is a businesgf'expenaitiA. Tneetirtililieeipenditure '- f&:their boarding and lodging Pei& aitieionsidOilkfifobbe an expenditure meant for the purpose or getting prospective coal miners. Whether or hot this Tribunal to reach, aconclusion that the incurring of,Fxpenditure for boarding, approach of the Tribunal is correct and whether there is material at all for the lodging and eciiicaiion of Orphans was not only conceived as a philanthropic measure but also as albusiness proposition and what legal inference has to be drawn from the proved facts, is an argubale question of law to be decided. n-rv. h As far as the second position is concerned, we are unable to find a debatable question of law fit to be referred for the consideration of this Court. One of the conditions to be satisfied for allowing deduction by way of investment allowance under section 32-A is that new machinery of plant should have been installed in an industrial undertaking" for the purposes of {{BLUEER PAGE}} business of construction, manufacture orproduction oflany article or thing, not being an article or thing specified in the list in the Eleventh.,Schedule". The contention advanced on behalf of the Revenue is that, winning or excavating the coal from the mine does not itivOlVilniedtintIOIVelan article othipA., Learned iiiipnt ,c93insF1, contends t4.!,. The Tribunal has followed ie Sediiion of this Court (Mity ITR 640, 1ir 13' fiefl 'eairh held w erem the 'vision nc o u e t 'operations resulted in the production of an article or thing, Anigground water within the meaning of section 32-A(2)(b)(iii) and a similarvvlevialfen by the Karnataka High Court was reversed by the Supreme Court in CIT v. N.C. Budharaja and Coc(199)20thiTRALAnrthat'case ,the-Sopreme,Court held that the activity of constenction ofiaqlant,?,heldge; building,onsoad, does not amountotai production nEr:ondartielcionAllingoghe Supreme; Court mainly relied on the legislativaithistoryidntheaTedvisithbiforintheifypurpose of understanding the meaning of the words -articles and things" occurring in Tekif6i1 324(2) gird gointed,16telitaliffeyetifekOhly titOttOilablartibjects. As iheckarnataka Hightednirextending 'thief:10*th op kali:4424e seater ieivimettinet- 4tripkVynd illiEdigging bore rokIlsb as conCeineel, 6kFtSuelliikir13firtlibrily '3s '. a6 b00)?:i rooms. *di iris sgbird ,Insb s to noiturizao "For the reasons given hereinabovelihmOsArfaql4qPiingwjapiAll is allowed." el "saubo- r. Tr ocisnoiraiCt isrtoiIsnpIrti w3/1 fi Is to Jh11,8h9P,APIFAN'?1PPRWaifigrkYRAciEd41ffiwthP aPPS#' we ppst,tafie it-,that:theppssnmsolltheAarwittalcahlAghbcpurt sit **. To the xi W adPhCflitVii;415RATI 41-19Pq gr.14qi`ea*Ai?M) 174 IT4 640 must fieemedvto have pRendisapprRy5,dAyAenSymnte,Roiesti.
3. Theph.0,,, s in slocfar grawo4k4ippoilicipmrthA dccipioo of thiiRArt in uper Driller' case (1988) 174 ITkA40, TgyAio.Tirico/rreet. The4tthAnissiop made by learned standing counsel is correct to this extent. But that does not .solvetAlleoprochlem,., Even :eschewing the ,debisialt4m:SuperiElpiller's case l(-1988)itih !TR 440), (AIRO :from consideration ,Wettnectuntblei to ,:say that the conclusios5reacheilfbynthe Tribunal is .Untenableddelthelitotempretation of sectiortc32A(2) inutheicontext of the fadts ofrthis, case gluon-rine:to a debatabletiquestion)ciffilaw: In coming to the conclusion thatnnondebatable question of,law.Arises.'for consideration;Ave-rely on theivery -.Decision of the Supreme CourP. Which has been pressed,- into ,service);by: learned, standing counsel.,The;Tribuntd.:held that in extracting. Coal or, miming coal from the coal ininal thlartick Cdr thing ,is produced. ,-It-=is not (theyea.Se of the Revenue that coal witieh is extracted fromthe.Mine imnotinniarticle or thing. What is sought to be contended, is' that winning o.i.:excavatint Coatis not an activity of production. It is difficult to agree with this contention of the principle laid dOwilfibyliffrk'S elciaiit in CIPPIii-i1/41: C. 'Budharija & Co.(1993) 204 ITIk.:1411; the Sit 'fertile ourtiribiet'Vedi?; no,1"boLl '1%in-,11x:11A' b3tils Sri" T e w af the word {{BLUER PAGE}} ' manufacture'. While every manufacture can he characterised as production, every production need not amount to manufacture."
4. ' It was further observed: "The, word 'production' or' produce' when used in juxtaposition with the word ' manufacture' takes in bringing into existence new goods by a process which may or may not amount to manufacture."
5. Then, it was observed: "The expressions ' manufacture' and 'produce' are normally associated with movables---articles and goods, big and small---but they are never employed to denote the construction activity of the nature involved in the construction of a dam...."
6. ' The Supreme Court also expressed the view that the expressions used the relevant clause of section 32-A must be understood in their normal connotation and according to commercial usage.
7. Viewed from that standpoint and the legislative history of the provisions, their Lordships held that construction of a dam, bridge and the like cannot be understood as production of an article or thing.
8. ' In Webster's New International Dictionary, the word "produce" is defined as "something that is brought forth or yielded either naturally or as a result of effort and work." In Shorter Oxford English Dictionary, the following meaning is given: "To bring forward, bring forth or out; to bring into being or existence." The meaning given in Black's Law Dictionary to the expression "produce" is "To bring forward ; to show or exhibit ; to bring into view or notice ; to bring to the surface".
9. ' Applying the principle of interpretation spelt out by the Supreme Court in the aforementioned decision and the ordinary meaning of the word "produce" as disclosed by the dictionaries and by its ordinary connotation, we have no doubt in our mind that the activity of winning or excavating the coal from the mines can be aptly described as production activity. It is common to use the expression that the coal or ore is produced from the mine and the statistics of total production of coal or other minerals are required to be given under the statutory provisions governing mines and minerals. It is also not out of place to mention that under section 35-E of the Income-tax Act which deals with deduction for expenditure on prospecting, etc., for certain minerals, the following is the language employed: engaged in any operations relating to prospecting for, or extraction or production of, any mineral " (Emphasis supplied) Thus, the expression "production of mineral" is used in the allied provisions of the Act itself and it is a definite point that Parliament employed the expression "production" to the minerals extracted from underneath the surface as well as just as the legislative history taken into account by the Supreme Court, the internal aid to interpretation furnished by a cognate provision can be ultimately taken into account. Viewed from any angle. We are of the view that the benefit of section 32-A is available to the respondent assessee. The correct legal position regarding deduction of investment allowance should not be left in doubt and an uncertainty created in the mind of the respondent assessee which is a public sector undertaking in the guise of raising a question as to interpretation of a provision which admits of no doubt. We, therefore, decline reference on the second question.
10. ' In the ,result, we direct reference only on the first question. We direct the Tribunal to draw up the statement of case and refer the first question of law extracted-above for the opinion of this Court.
11. The income-tax case is partly allowed. No costs.