TaxTMI 
TaxTMI 
2012 (8) TMI 809
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....e circumstances of the case, the Income Tax Appellate Tribunal was right in law in holding that the assessee is eligible for deduction under Section 80IA of the Act, even though the assessee is not engaged as such in any industrial activity of its own except assembling on job work basis?" 2. The T.C.(A).Nos. 218 and 219 of 2007 were admitted on the following substantial question of law:- "Whether the assessee is entitled for claim of exemption under Section 80IA when it did not carry out any manufacturing activity?" 3. The assessee herein is a company which claimed deduction under Section 80IA of the Act in respect of its new division called as Ultra Division which is engaged in the manufacture and sale of grinders. The ass....
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....dyes and raw materials and the job workers were not independent to act on their own but were under the direct control and supervision of the assessee, they were entitled to the benefit of deduction. Accepting the case of the assessee, the Commissioner of Income Tax (Appeals) allowed the assessee's appeal, thereby, granted deduction under Section 80IA. The Commissioner of Income Tax (Appeals) pointed out that the assessee's case answered the test prescribed by the Bombay High Court reported in 196 ITR 813 C.I.T. v. M/S.PENTWALT INDIA LIMITED. The Appellate Authority pointed out that apart from procurement of components and raw materials, the dyes and moulds were supplied by the assessee and quality control and strict supervision was ensured ....
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....IA. He also placed reliance on the decision reported in 225 ITR 814 CHILLIES EXPORTS HOUSE LIMITED v. COMMISSIONER OF INCOME TAX as well as 216 ITR 566 COMMISSIONER OF WEALTH TAX v. RAMALINGAM and submitted that on the admitted facts, the Tribunal ought not to have granted the relief to the assessee by holding that the assessee is engaged in the manufacturing activity. 5. Per contra, learned counsel for the assessee placed reliance on the orders of the Tribunal, the decision of the Bombay High Court reported in 196 ITR 813 C.I.T. v. M/S.PENTWALT INDIA LIMITED as well the decision of this Court reported in 225 ITR 814 CHILLIES EXPORTS HOUSE LIMITED v. COMMISSIONER OF INCOME TAX and the decision of the Supreme Court reported in 216 IT....
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....extracted control over the job work as though they were employees of the assessee. Given the fact that the dyes and the materials were given by the assessee to the job workers, who had merely bestowed their labours, we have no hesitation in accepting the case of the assessee that it qualify for relief under Section 80IA. 9. In the decision reported in 216 ITR 566 C.I.T v. V.O.RAMALINGAM, this Court considered the meaning of manufacture or processing of goods under the Wealth Tax Act. This Court pointed out that, "............... There should be no misapprehension that "engaged in manufacturing" postulates the assessee's direct involvement in the manufacture and that it may not be necessary that the assessee himself should be person....
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.... INCOME TAX is concerned, the Apex Court considered the issue as to whether the assessee was an industrial company as defined under the Finance Act and hence, to be taxed at 55%. There the assessee got the chillies fumigated by a third party by paying charges therefor under a contract. The Apex Court pointed out that the question as to whether the assessee was carrying on business of processing of goods would depend upon the consideration of all relevant materials available in the case. The question that fumigation was done by another party is immaterial or irrevalent for the purpose of considering whether the assessee is engaged in the manufacturing activity. The question is whether the activity including the one relating to fumigation giv....