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2017 (8) TMI 848 - AT - Income TaxClaim of deduction u/s 80IB - denial of claim on the ground of the last year that the assessee was not manufacturing DG sets at Jammu Unit - Held that:- The process flow chart of manufacturing of DG sets filed by the assessee exhaustively describes the manufacturing process which involves three stages i.e. manufacturing of canopy of DG sets, manufacturing of DG set and manufacturing of AMF panel which also includes drilling, cutting acoustic foam pasting, fixing of electrical items, drilling of mounting plate fixing of switch gear, load testing, sound testing etc. The process of manufacturing DG sets does not involve mere ascending of parts but is actually a manufacturing process resulting in the manufacture of new product from the raw materials by giving them new properties. The CIT(A) has gone through the details of plant and machinery and also the copies of bills relating to the purchase of the same filed by the assessee. The CIT(A) has also given clear finding that the Assessing Officer has picked out and highlighted only those machines which are used for lifting and shifting work and ascending on the DG set and ignored the other machines used by the assessee for various purposes deployed by the assessee in its manufacturing process. After careful consideration, the CIT(A) held that the assessee is entitled to claim deduction u/s 80 IB of the Act. There is no need to interfere with the detailed finding on record given by the CIT(A) TDS u/s 194C - addition u/s 40(a) (ia) - Held that:- The provisions of Section 194C (a) does not become applicable in the instant ase because the assessee is an individual being the proprietor of M/s GSP Power Projects and M/s Cromwell Industries with the Assessment Year involved under reference is 2007-08 i.e after 1/6/2007 since for the year under consideration no liability for deduction of TDS u/s 194C (1) is attracted in the present case. The Assessing Officer’s attempt in disallowing the amount u/s 40(a)(ia) is unwarranted. There is no need to interfere with the said findings. Therefore, this ground of appeal for Assessment Year 2007-08 taken by the Revenue is dismissed. Excise Duty refund - Held that:- CIT(A) has rightly relied upon the Hon'ble Supreme Court decision in case of Liberty India [2009 (8) TMI 63 - SUPREME COURT] wherein it is held that the payment f Central Excise Duty had a direct nexus with the manufacturing activity and similarly of the refund of Central Excise Duty also had a direct nexus with the manufacturing activity. The issue of payment of Central Excise Duty would not arise in the absence of any industrial activity. There is inextricable link between the manufacturing activity, payment of Central Excise Duty and its refund. Therefore, the CIT(A) has rightly directed the Assessing Officer to allow deduction u/ s 80IB on the Excuse Duty refund received by the assessee. There is no need to interfere with the same finding.
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