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2017 (9) TMI 1234 - HC - Income TaxEntitlement to deduction under Section 80 IB - Whether the activity of galvanization would amount to manufacture? - Held that:- The appellant is admittedly engaged in the manufacture of black pipes as well as galvanized iron pipes. The appellant also undertakes to manufacture all galvanized iron pipes by galvanization of raw pipes of customers on job work basis. The pipe is required to undergo the processes of prickling, rinsing, fluxing, drier, zinc tank and water quenching for the purpose of galvanization of iron pipe. After the completion of the entire processes, the end product which comes into existence is called galvanized iron pipe which is a different commercial commodity than iron pipe. A galvanized iron pipe is sold at a higher price than an iron pipe and a galvanized iron pipe is used for laying water lines, manufacture of different machinery and plants and for other purposes for which iron pipes cannot be used. Thus, galvanized iron pipe is a different commercial commodity than a iron pipe, therefore the activity of galvanization in our considered opinion amounts to manufacture. - Decided in favour of the assessee and against the Revenue. Accepting interest subsidy received by the appellant being reimbursement of the interest paid to the Bank on working capital advances for increasing the production of the industrial undertaking as income derived from such industrial undertaking and is entitled to deduction under Section 80 IB. See Commissioner of Income Tax v. Meghalaya Steel Ltd [2016 (3) TMI 375 - SUPREME COURT]- Decided in favour of assessee. Non allowing the deduction of EPF u/s 43B - EPF was deposited before the date of filing of return under Section 139(1) - Held that:- Substantial question of law is no longer res integra as is covered by the decision of CIT v. Alom Extrusions Ltd [2009 (11) TMI 27 - SUPREME COURT] wherein held that relaxation allowed by 1st proviso to Section 43B of the Act was restricted only to tax, duty, cess and fee, and did not apply to contributions to labour welfare funds. Since the second proviso to Section 43B resulted in implementation problems, it was deleted by Financial Act, 2003, thereby equating tax, duty, cess and fee with contributions to welfare funds. It was further held that the aforesaid amendment operates retrospectively, that is, w.e.f. 01.04.1988, i.e. the date of insertion of the 1st proviso. - Decided in favour of the assessee.
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