9911796707
TMI Blog2013 (6) TMI 731X X X X Extracts X X X X X X X X Extracts X X X X ..... . Facts in brief:- The assessee is a Partnership Firm and it filed its return of income on 31.10.2006 declaring a total income of Rs. 24,17,034/-. The AO at para 5.3 to 5.3.5 has discussed the issue. The same is repeated in para 8 of the Ld.CIT(A)'s order, for the sake of brevity we do not extract the same. The issue is whether on the facts and circumstances of the case, the Ld.CIT(A) was right in holding that the assessee is engaged in manufacture or not. The facts are brought out at para 11 of the Ld.CIT(A)'s order which is extracted for ready reference. "11. The assessee had entered into a purchase contract with M/s Dharampal Prem Chand Ltjd. The mandate of the assessee was to fabricate, supply, short blast, paint, and erect steel stru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sizes & shapes of Templates Then the material is cut with the help of hackshaw machine, gas cutters: bended with the help of fixture after heating. Machining of Components Some components like base plates, tension chords, bolts which require machining are machines on Lathe machine and are drilled with the help of magnetic drilling & radial drilling machines Welding Different components manufactured are welded together to form assemblies like laces columns, trusses etc. Sand blasting It is a process where the sand is thrown through high speed compressed air in order to remove the carbon scaling on the surface of the components and assemblies. Painting The components are painted with anti rust primer with the help of air compressor. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R. Mr.D.K.Mishra found fault with the order of the Ld.CIT(A). He referred to the AO's order and specifically to para 5.3.4, 5.3.5 and 5.3.6 of the AO's order specifically drawing the attention of the Bench to the comments of the tax auditor as extracted by the Ld.AO. He referred to the Ld.CIT(A)'s order para 8 and to the chart given therein and submitted that when this chart is read with copy of the purchase order, it leads to a conclusion that what the assessee has undertaken is fabrication and not manufacture. He also disputed the finding of the First Appellate Authority that the facts of the assessee's case are identical with the facts in the case of Beehive Engineering Co. and Allied Industries Ltd. (supra). 5.1. The Ld.D.R. further su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of the First Appellate Authority has to be upheld for the reason that, the facts of the case clearly demonstrate that the assessee has manufactured an article or a thing. The ld.CIT(A) in the order dt. 30.1.2012 for the AY 2008-09 has discussed the issue at length. At para 6 and 7 of his order he held as follows:- "(6) I have also called for and examined the purchase order placed on the appellant by M/s. Dharmpal Premchand Ltd. dated 07.07.2006 for the fabrication, supply, shot/sand blasting, painting and erection of 1500 MT of steel structures for its steel project at Agartala. As per the order, the entire work was to be executed strictly in conformity with technical details provided to the appellant through detailed fabrication drawin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oduced details of rent paid to Tripura Industrial Development Corporation Ltd., the bills of construction of the factory sheds and the details of payment of electricity charges to Tripura State Electricity Corporation Ltd. The appellant has produced the bills of purchase of the machinery installed at the premises, comprising drilling machines, welding machines, motors, gas cutting machines, air compressor, etc. The appellant has also produced details and bills of purchase of raw material comprising nuts, bolts, rods, M.S.angles, channels, HR sheets, metal paints etc. After carefully considering the various evidences filed, I am unable to uphold the finding of the Assessing Officer that no manufacturing activity has been carried out by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed sizes, and thereafter, the pieces were welded, drilled with holes and fitted with bolts, nuts, etc. for manufacturing trusses. The assessee company had also undertaken the work of fixing the trusses for purposes of roofing on the building which were under construction. The assessee claimed that it was an industrial company and entitled to the benefit of the reduced rate of tax. The ITO rejected the claim. However, the appellate Assistant Commissioner and the Tribunal allowed the claim. On a reference: Held, that having regard to the findings of fact recorded by the Tribunal, the assessee company squarely fell within the meaning of 'industrial company' whether or not the income from the activities exceeded 51 per cent. It was entitled p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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