Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2012 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2012 (8) TMI 803 - AT - Income TaxWhether the deduction u/s 80IB can be allowed in relation to the profit earned by the assessee from job work activity done on behalf of the sister concern - whether the job work activity can be considered as manufacturing activity - Held that:- There is no provision in section 80IB as in the case of section 80IA that deduction cannot be allowed in case of contract work and therefore, the deduction has to be allowed in case the assessee had manufactured the goods on behalf of the assessee on job work basis. What constitutes “manufacture” is well settled that it is only when the change or a series of changes, take the commodity to the point where commercially it can no longer be regarded as original commodity but is recognized as a new distinct article, manufacturing can be said to have taken place. Deduction u/s 80IB cannot be disallowed only on the ground that the product by the assessee has been used as a raw material by the sister concern. In case the product is a distinct commercial product different from the raw materials used by the assessee, the claim has to be disallowed. We, therefore, set aside the order of the CIT(A) and restore back the matter to the AO for limited purpose to verify whether emulsifier produced by the assessee on behalf of the sister concern is a new commercial product difference from the raw materials used and recognized as such in the market.
|