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2010 (4) TMI 810 - AT - Income TaxWhether conversion of printed aluminium sheets into pilferage proof caps, is a process which can be called a manufacturing activity - Job worker - Heated Aluminium sheets and toughened through coating of varnish so that the printed matter remained permanent - Assessee further processed on printed aluminium sheets and the end is pilferage proof caps - AO denied exemption under 80-IB as the process didnt amount to manufacture. - Held that:-The raw material used which was printed aluminium sheet, were through such processes converted to pilferage proof caps which was an entirely different product, having different commercial use than from the printed aluminium sheet. The aluminium sheet as such cannot serve the purpose of closing a bottle in a pilfer proof manner.The Apex Court in the case of India Cine Agencies v. CIT (2008 -TMI - 31532) has clearly held that even conversion of jumbo rolls of photographic films into small flats and rolls would amount to manufacture or production. - Decided in favor of assessee. Disallowance u/s 40(1)(ia) - shartfall in deduction of tax at source - held that:- The disallowance contemplated under section 40(a)(ia) is where tax has not been deducted or where, after deduction, it is not paid. Whether such disallowance can be done even when deduction has been effected but at a rate lower than the prescribed one has not been looked into by the learned Commissioner of Income-tax (Appeals). The view of the learned Commissioner of Income-tax (Appeals) that the exercise is futile is not correct since it will have ramifications in future years, when allowances are claimed by the assessee after remitting the short fall. - matter remanded back to CIT(A)
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