TMI Blog2007 (6) TMI 253X X X X Extracts X X X X X X X X Extracts X X X X ..... e asst. yrs. 1992-93 to 1997-98, the assessee has been consistently getting deductions under ss. 80HH and 80-I of the Act. In our considered view, the learned CIT (A) was not justified in withdrawing the deductions in question. Hon'ble Delhi High Court in the case of Lovely Bal Shiksha Parishad[ 2003 (10) TMI 25 - DELHI HIGH COURT] held that there was no change in the nature of activities and the assessee had been granted exemption u/s 10(22) of the IT Act not only in respect of earlier years but subsequent year as well, the assessee was entitled to the exemption in the asst. yr. 1991-92. In this case also, the Hon'ble Delhi High Court has applied the ratio laid down by the Hon'ble Supreme Court in the case of Radhasoami Satsang vs. CIT [ 1991 (11) TMI 2 - SUPREME COURT] . Following the above referred cases. We, therefore, reverse the order of the learned CIT(A) and restore that of the AO. Accordingly, we allow the appeal filed by the assessee. In the result, the appeal is allowed. - Member(s) : H. L. KARWA., D. C. AGRAWAL. ORDER-H.L.KARWA, J.M.: This appeal filed by the assessee is directed against the order of the learned CIT(A)-II, Lucknow, dt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d CIT(A) that the coils which were used in the repair of transformers were manufactured by the assessee, on which it was paying excise duty also and under the Trade-tax law, the assessee-company was treated as "manufacturer". The learned CIT(A) took the view that the damaged transformers received for repair from the UPSEB could not be called a commercially different article after their repair. He further observed that the assessee could not produce any evidence to show that the coils manufactured for fitting in the damaged transformers were independently marketable articles. The learned CIT(A) also observed that even if these were so, no separate accounts have been maintained in respect of the activity of such coils by the assessee-company. According to him, the entire profits of the assessee's business cannot be said to have been derived from the manufacture of coils. The learned CIT(A) also stated that in fact, the receipts from UPSEB were for repairs of damaged transformers. The learned CIT(A), therefore, held that the assessee was not entitled to the deductions under ss. 80HH and 80-I of the Act. While holding so, the learned CIT(A) relied on the decision of Hon'ble Supreme Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nufacturing process includes core assembly, coil manufacturing, core and coil assembly, baking metal part assembly, bushing and metal part assembly, tank up of assemblies, processing, conditioning and filling of transformer oil and testing of transformer. Accordingly, it was submitted by the learned counsel for the assessee that entire activity is a compact manufacturing process and full-fledged transformers are produced. It was submitted that the assessee-company is engaged in the manufacturing of transformers and its entire process strictly comes within the definition of "manufacture" because the ultimate product, which is made/manufactured results in a new and different article. It was also stated that the Director of the Industries and Central Excise Department have granted registration certificate as a manufacturer and also the Sales-tax Department has recognized the assessee as a manufacturer. Sri Amit Shukla, learned counsel for the assessee, submitted that in similar set of facts, Tribunal, Amritsar Bench, in the case of Saraf Electricals (P) Ltd. vs. Asstt. CIT (2004) 89 TTJ (Asr) 761, held that process involved in manufacturing of new transformers and repairing the old tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere is no material on record to show that the assessee was engaged in the manufacture and production of an article or thing. He also relied on the decision of the Hon'ble Supreme Court in the case of CIT vs. N.C. Budharaja Co., wherein the Hon'ble Supreme Court has defined the meaning of "manufacture" as under: "Commonly, manufacture is the end result of one or more processes through which the original commodity is made to pass. The nature and extent of processing may vary from one case to another, and indeed there may be several stages of processing and perhaps a different kind of processing at each stage. With each process suffered, the original commodity experiences a change. But it is only when the change, or series of changes, take the commodity to the point where commercially it can no longer be regarded as the original commodity but instead is recognized as a new and distinct article that a manufacture can be said to take place." In view of the above, Sri Anadi Verma, learned senior Departmental Representative, submitted that the learned CIT(A) has rightly withdrawn the deductions allowed by the AO under ss. 80HH and 80-I of the Act aggregating to Rs. 1,50,545. It was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rough the different assessment years has been found as a fact one way or the other and parties have allowed that position to be sustained by not challenging the order, it would not be at all appropriate to allow the position to be changed in a subsequent year.' We feel that the afore-extracted observations squarely apply on the facts in hand. For the foregoing reasons, we do not find any merit in this appeal and accordingly decline to entertain the same. Dismissed." In the above case, the Hon'ble Delhi High Court held that the AO was not justified in taking a different view only in respect of the asst. yr. 1993-94 when from the asst. yr. 1970-71, exemption under the said provision was being allowed to the assessee consistently. Accordingly, the Hon'ble High Court held that the assessee was entitled to exemption under s. 10(22) in the asst. yr. 1993-94. 9. Similarly, the Hon'ble Delhi High Court in the case of Lovely Bal Shiksha Parishad held as under: "In view of the aforenoted factual position and keeping in view the fact that no change in the nature of activities has been pointed out and the assessee has been granted exemption under s. 10(22) of the Act not only in resp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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