TMI Blog2015 (2) TMI 625X X X X Extracts X X X X X X X X Extracts X X X X ..... I. C. SUDHIR And SHRI T. S. KAPOOR, JJ. For The Appellant : Shri Rajeev Saxena, Advocate Shri S.P. Agarwal,. CA For The Respondent : Ms. Nidhi Srivastva, Sr. DR ORDER PER I. C. SUDHIR, JUDICIAL MEMBER: In all these appeals preferred by the revenue a common issue has been raised as the Ld. CIT(A) has erred in allowing assessee s claim of deduction of ₹ 4290162/- in asstt. year 2006-07, ₹ 85,69,594/- in asstt. year 2008-09 and ₹ 2,46,13,965/- in asstt. year 2009-10 u/s 80IC of the IT Act 1961. 2. We have heard and considered the arguments advanced by the parties in view of orders of the authorities below material available on record and the decisions relied upon. 3. The facts in brief are that the assessee company claims to have manufactures products called steri-air air purifier systems by procuring various parts / components of the system from different vendors and assembling them at its unit. It was claimed that electronic and electrical components are received in the form of cards with suitable connectors and all the required cards are connected using connectors. For the manufacturing process tools and equipments were purchased and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he purchase bills of the tools without mentioning name of supplier or their addresses. Thus in absence of address it was not possible for AO to ascertain the claim that tools were purchased from them. Thus the AO was justified on arriving the conclusion that no manufacturing activities were carried out nor any machinery whatsoever was purchased or available with the assessee. She pointed out further that while giving relief to the assessee, Ld. CIT(A) has referred about some photographs depicting the various processes involved by the assessee in manufacturing of air purifier which were not furnished before the AO. She also referred page No. 58 of the paper book with this submission that only testing equipments have been used. She also referred page No. 68 to 75 of the paper book i.e. copies of photographs which have been considered by the Ld. CIT(A) to arrive at the conclusion that assessee is involved in the manufacturing of air purifier. She referred further the contents of page Nos. 114 and 175 of the paper book which are copies of cash vouchers and bill of purchasing of wire to support her submission that no manufacturing activities were there at the unit of the assessee. The L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f section 80IC of the Act if such processes results in formation of a commercially new and distinct products from the inputs used in its manufacture /production. Taking strength from these decisions on the ratio the Ld. CIT(A) has given following finding in para 5 of the first appellate order for the assessment year 2006-07, reproduced hereunder :- 5. The appellant contended that the assessing officer erred in disallowing deduction under section 80IC on two accounts :- (a) that the process of manufacturing of air purifier is not mere assembling of parts but involved various processes and operations ; and (b) that, at any rate, assembling of various components amounted to manufacture/production for the purposes of section 80IC of the I.T. Act. As regards the first part of its submissions, the appellant submitted that the manufacturing of air purifier required various processes including, but not limited to sysmetic and various other testing and procedures before the final product is ready. The appellant in this regard also furnished a flow chart depicting various processes and submitted compilation of photographs depicting the various processes involved. The appellant has als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essfully demonstrate on facts that a new and distinct product is generated / manufactures from the raw material used in its preparation. It is noticed that the appellant has used, inter alia, the following inputs in manufacture of the air-purifier :- a) FAN b) MOTORS c) 3 FILTERS d) U.V. LIGHT It is further noticed from the flowchart annexed by the appellant that manufacturing of an air purifier does not merely involve assembling since the appellant has to carry out various operations/activities on each of the components before the same could be utilized. Steri-Air air purification systems use multiple technologies like ozone gas, electrostatic precipitator, Ultra violet germicidal irradiation, multiple mechanical filters like synthetic pre filters, secondary filters, activated carbon filters, HEPA (High efficiency particulate arrestsor) filters in various permutations and combinations. Steri-Air is a versatile system, which can be used in almost all areas of a hospital of a continuous 24 x 7 basis. Manufacturing of Steri-Air is an assembly process, where various parts/components of the system are procured from different vendors and assemble the same at factory. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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