Commissioner Of Income-Tax vs Gem India Manufacturing Co.

The Supreme Court addressed the issue of whether the process of cutting and polishing diamonds constitutes 'manufacturing or production of goods' under Section 80-1 of the Income-tax Act, 1961. The Court held that while raw diamonds undergo a process to become polished diamonds, this does not qualify as the creation of a new article or thing for tax deduction purposes. Consequently, the High Court's ruling was overturned, and the question was answered in the negative, favoring the Revenue.