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2014 (4) TMI 625 - AT - Income TaxEligibility for deduction u/s 80IB(2) of the Act – Process amounts to manufacture or not u/s 80IB(2)(iii) of the Act – Held that:- The decision in ACIT Vs National Lamination Industries [2007 (6) TMI 230 - ITAT AHMEDABAD] followed – There cannot be two opinions that the shape of lamination has undergone a complete change after performing various processes - the raw material from which the core is made, is called CRGO coils whereas the item, which emerges after various processes, is called transformer core - Also the CRGO coils, even with few processes, cannot be used in a transformer unless all the processes are complete - It is the transformer core only, which is the end-product, which can be used in the manufacturing of transformer - due to various processes, the product has distinct name, shape and uses - By these processes, the raw material loses its identity and new product comes into existence, which is commercially recognized as new product - the assessee were engaged in the manufacturing or producing an article or thing and had rightly allowed exemption u/s 80 IB of the Act – thus, the process used by the assessee in its business is eligible for deduction u/s. 80IB of the Act – Decided against Revenue. Eligibility for deduction u/s. 80IB of the Act - Assessee did not employ 20 or more workers in the process carried on by the assessee without the aid of power – Held that:- The issue needs further verification – thus, the matter is remitted back to the AO for examination of the register of wages and in particular the Revenue stamps affixed - If the entries in the register of wages are found correct and genuine, the AO shall allow the deduction so claimed by the assessee u/s. 80IB of the Act and if found otherwise, the assessee will not be eligible for deduction u/s. 80IB of the Act – Decided partly in favour of Revenue.
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