Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2014 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (1) TMI 1127 - AT - Income TaxEligibility for deduction u/s 80IC - Held that:- the definition of “manufacture” as defined in s. 2(29BA) though not applicable but certainly can be used as a guide. As per clause (b) of section 2 (29BA) the definition of "manufacture" means “bringing into existence a new and distinct object or article or thing with a different chemical composition or integral structure - for the purpose of income tax it needs to be found out as to whether the process undertaken by an Assessee meets the test of manufacturing so as to become eligible for deduction for undertaking the manufacturing activity - Following Nemat Enterprises (P) Ltd vs ACIT [2010 (12) TMI 268 - ITAT, MUMBAI] - It is possible that Central Excise Tariff Act (CETA) deems certain processes as manufacturing by placing certain products in a particular chapter for the purpose of excise duty even if they do not fulfil strict criteria of a manufacturing process but for the purpose of Income-tax we have to find out whether the product meets the test of manufacturing activity. Following COMMR. OF INCOME TAX-V, NEW DELHI Versus M/s ORACLE SOFTWARE INDIA LTD. [2010 (1) TMI 9 - SUPREME COURT OF INDIA] - In each case when an issue of this nature arises for determination, the Department has to study the actual process undertaken by the assessee - If an operation/process rendered a commodity fit for use for which it would otherwise not be fit, the operation/process fell within the meaning of the word "manufacture" - The Department that, in all such cases, they should have a panel of experts who may be engaged in appropriate cases so that the cases need not be remitted - CIT(A) has not obtained any report from an expert to conclude that the new product which has come into existence by undertaking the process of mixing and grinding is on account of manufacturing process but has accepted the contention of Assessee - A definite finding is required to determine as to whether the activity of the assessee can be termed as manufacture in the light of the requirement of the Act so as to enable the Assessee to claim deduction u/s 80IC. Higher gross profit – Held that:- The Assessee has submitted the reason for having gross profit in excess of 70% to be on account of saving in excise duty, VAT, higher price charged on account of longer credit period and lower administrative cost - There is no finding on the said aspect by CIT(A) and he has accepted the contention of Assessee – The issue is restored for fresh adjudication.
|