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2017 (8) TMI 1657 - AT - Income TaxDeduction u/s 80-IC - proof of manufacturing activity - As per revenue assessee has failed to prove any manufacturing activities during the years under assessment but it was only doing job-work for its sister concern - HELD THAT:- Undisputedly, the assessee is manufacturing crank shaft. It is also not in dispute that assessee company is registered with Department of Commercial Tax, Government of Uttarakhand as a wholly manufacturing unit as per certificate of registration, available. It is also not in dispute that the assessee company is registered as a Small Scale Industry Unit (SSI Unit), registered with Department of Industry. Thus it is difficult to accept the contention raised by the ld. DR that the assessee is not into manufacturing activities and that raw material is coming and going out from the assessee unit only with a different nomenclature. From the process flow chart it is proved on record that comprehensive manufacturing activities are being carried out by the assessee company, which has never been disputed by the AO. It does not matter if the entire sale of the manufactured products as has been made by the assessee company, to its sister concern and it cannot be deprived from claiming deduction u/s 80-IC on this score. Thus it is settled principle of law that for arguments sake, even if the assessee company is assumed to be into job-work even then it cannot be denied the benefit of section 80-IC of the Act as has been held by Hon’ble Delhi High Court in judgment cited as CIT- III vs. Sadhu Forging Limited [2011 (6) TMI 9 - DELHI HIGH COURT] When the assessee is manufacturing crank shaft the process of manufacturing the same is held to be a manufacturing activity by Hon’ble Madras High Court rendered in a judgment cited as CIT vs. Tamil Nadu Heat Treatment and Fetting Services (P.) Ltd. [1998 (2) TMI 71 - MADRAS HIGH COURT] Thus CIT (A) has arrived at legal and logical conclusion that the assessee company is engaged in manufacturing activities and is entitled for deduction u/s 80-IC. - Decided in favour of assessee, Unexplained capital introduction by the assessee - assessee has failed to bring on record any evidence to prove the genuineness of the capital introduction - HELD THAT:- On perusal of the assessment order itself shows that, “the assessee has brought on record ITR of Vinay K. Naik, Director of the Company, who has made capital introduction for AY 2009-10” but the AO has simply made an addition by observing that, “the assessee has simply said that the investment has been made from his saving and has submitted ITR for AY 2009-10 only and nothing else”. When the Director of the company has brought on record his ITR for AY 2009-10 it was for the Revenue to call supporting documents, if needed, but he has not preferred to do so and impliedly admitted the genuineness of the capital introduced by the assessee. So, in these circumstances, we are of the considered view that there is no illegality or perversity in deleting the addition. TDS u/s 194J - ‘professional charges’ without deducting any TDS - HELD THAT:- CIT (A) deleted the addition on account of making payment of professional fees to Shri Sanjay Singh, Shri Bhushan Bapat and Shri Subodh Agarwal keeping in view the fact that the said payment was admittedly deposited in Government accounts late but the same has been deposited prior to filing of the income-tax. So, there is no illegality in making the deletion by ld. CIT (A). So far as question of addition of addition made to M/s. Adecco is concerned, since the said payment is made to M/s. Adecco, a labour supply agency, no tax was required to be deducted and this fact has already been intimated to the AO, and as such provisions contained u/s 194J of the Act are not attracted in this case. So, again ld. CIT (A) has validly deleted the addition. Consequently, ground determined against the Revenue.
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