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2018 (12) TMI 1568 - HC - Income TaxEntitlement to relief u/s.80IB - Installation of the equipment is a part of manufacturing activity carried on by the Appellant - splitting of contract - Held that:- In the instant case, the contract is for design, supply, installation and maintenance. Therefore, for the Assessing Officer to come to a conclusion that the design would fall within the category of "manufacture" and not supply and installation, in our considered view would be an incorrect way of interpreting the contract entered into between the two parties. The Assessing Officer did not have material to split up the contract into one or more parts. As examined the relevant documents which were placed before the CIT(A) and it appears from those documents that the contract is a very complex contract involving technical design and installation for a project and that is why, the contract has a component called design so the design has to be done for a customer to suit his parameters. Obviously, the product made by the appellant is not a product which available "off the shelf". The product which is subject matter of consideration has been designed exclusively for the customers, which are Government of India Enterprises and the design is to suit the customers' need and unless it is operational the product does not come into being. This is the correct manner the contract has to be interpreted and has rightly been interpreted by the CIT(A) as concluded that the activity of the assessee in designing, engineering and fabricating of the plant and systems in the contract with Indian Oil Corporation Ltd., Bharat Petroleum Corporation Ltd., Bongaigaon Refinery and Petro Chemicals Ltd., is manufacture of article or thing - Decided in favour of the assessee
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