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2016 (7) TMI 395 - ITAT AHMEDABADEligibility of deduction under section 80IC - nature of activity undertaken by assessee - manufacturing of electric bike or mere assembly of parts - whether the activity amounts to "manufacture' or not? - Held that:- The moment there is transformation into a new commodity commercially known as a distinct and separate commodity having its own character, use and name, whether be it the result of one process or several processes 'manufacture' takes place and liability to duty is attracted. Etymologically the word 'manufacture' properly construed would doubtless cover the transformation. It is the transformation of a matter into something else and that something else is a question of degree, whether that something else is a different commercial commodity having its distinct character, use and name and commercially known If the activity of the assessee is being examined, then, it would reveal that the parts imported by the assessee from China had undergone a change and new product came to the light. The assessee has produced flow chart giving different stages how the product has undergone changes. This flow chart has been reproduced by the ld.CIT(A) while taking cognizance of the assessee’s written submissions. As far as the objection of the AO that the very meager machinery was being used by the assessee is concerned, the case of the assessee is that it requires only tools and not big plant to assemble parts. Similar, section 80IC nowhere laid down condition for employment of specific number of employees. Therefore, that objection of the AO is only irrelevant - Decided in favour of assessee
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