TMI Blog2010 (4) TMI 810X X X X Extracts X X X X X X X X Extracts X X X X ..... use than from the printed aluminium sheet. The aluminium sheet as such cannot serve the purpose of closing a bottle in a pilfer proof manner.The Apex Court in the case of India Cine Agencies v. CIT (2008 -TMI - 31532) has clearly held that even conversion of jumbo rolls of photographic films into small flats and rolls would amount to manufacture or production. - Decided in favor of assessee. Disallowance u/s 40(1)(ia) - shartfall in deduction of tax at source - held that:- The disallowance contemplated under section 40(a)(ia) is where tax has not been deducted or where, after deduction, it is not paid. Whether such disallowance can be done even when deduction has been effected but at a rate lower than the prescribed one has not been looke ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TR 178 and that of the hon'ble jurisdictional High Court in the case of CIT v. Taj Fire Works Industries [2007] 288 ITR 92 (Mad). 3. As is clear from the ground itself, the assessee was engaged in the production of pilferage proof caps from printed aluminium sheets. The Assessing Officer was of the opinion that it did not constitute manufacture but only a change in the form of the same commodity. The Assessing Officer also relied on the decision of Taj Fire Works Industries case (supra) for coming to this conclusion and effectively denied the claim for deduction under section 80-IB of the Act made by the assessees. 4. In its appeal before the learned Commissioner of Income-tax (Appeals), it was argued by the assessees that the process c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hence deduction under section 80-IB of the Act could not be given to it. Reliance was again placed on the decision of the hon'ble Apex Court in the case of Sacs Eagles Chicory (supra) and that of the hon'ble jurisdictional High Court in the case of Taj Fire Works Industries (supra). 8. Per contra, the learned authorised representative supported the order of the learned Commissioner of Income-tax (Appeals). 9. We have heard the rival submissions and perused the orders. The processes carried on by the assessee on the printed aluminium sheets are specified at paragraph 5 above. For deciding the question whether such process amounts to manufacture, what is to be seen is the ultimate commodity that is brought into existence. By the differen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e afraid that this decision would not help the Revenue in any manner for the reason that only up to the printing of aluminium sheets, an outside agency was engaged, whereafter all the processes necessary for converting such aluminium printed sheets to pilferage proof caps were done by the assessees themselves. As for the reliance placed on the hon'ble Apex Court decision in Sacs Eagles Chicory (supra), there the assessee was only making chicory powder from chicory roots after roasting them. The hon'ble apex court held that there was no manufacture or production involved since there were only two processes involved which were roasting of chicory roots and thereafter powdering them. Here on the other hand, steps involved cannot be compared to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 80-IB of the Act for 100 per cent of the profits. Therefore, according to him, there was no logic in the action taken by the Assessing Officer for making such a type of adjustment. He, therefore, reinstated the working done by the assessee. 12. Now before us, the learned Departmental representative strongly assailed the order of the learned Commissioner of Income-tax (Appeals). Per contra, the learned authorised representative argued that the learned Commissioner of Income-tax (Appeals) was justified in reinstating the disallowance suo motu made by the assessee. 13. As aforesaid, the assessee had made suo motu disallowance and the Assessing Officer had scaled down such disallowance. Such scaling down was obviously for a reason that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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