D.K. Seth, J. - (1.) The deduction under Sections 32A, 80HH and 80J of the IT Act, 1961 relevant to asst. yrs. 1983-84 and 1985-86 is in controversy before us. The Department's submission:
(2.) Mr. S.N. Dutta, learned counsel for the Department, had pointed out that the learned Tribunal and the AO were right in holding that the business of the assessee did not qualify for the deduction under the said three sections. Since conversion of trees into logs does not change the nature and character of the tree and when it is converted into logs, it retains the same characteristics of wood and as such it does not amount to production, particularly, when no new commodity emerges out of such activity. Submission of the assessee/appellant:
(3.) Mr. R.N. Dutta, learned counsel appearing on behalf of the assessee, on the other hand, contends that a tree when felled is not a commercially saleable article but when it is de-embarked and cut into pieces and logs are produced by seasoning the same, it becomes a commercially saleable article or thing. The concept of manufacture need not be introduced thereto. Applicability of the decisions cited:;