TMI Blog2016 (3) TMI 918X X X X Extracts X X X X X X X X Extracts X X X X ..... and Shri Waseem Ahmed, Accountant Member For The Assessee : Shri S.M. Surana, Advocate For The Respondent : Shri Sujit Das, JCIT, Sr-DR ORDER PER Waseem Ahmed, Accountant Member:- This appeal by Revenue and Cross Objection (CO) by assessee are arising out of order of Commissioner of Income Tax (Appeals)-I, Kolkata in appeal No.1083/CIT(A)-I/C-2/11-12 dated 19.01.2013. Assessment was framed by DCIT, Circle-2, Kolkata u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the Act ) vide his order dated 24.12.2011 for assessment year 2009-10. First we take up Revenue s appeal. 2. Revenue has raised following grounds:- 1. Whether on the facts and the circumstances of the case the Ld. CIT(A)- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s like engine, alternator, base place, fuel tank, control panel, are assembled and as a result a new product emerges which is called as a Diesel Generating set (for short DG set). The New Product DG set has different name and function. Besides the above, assessee also submitted the Central Excise registration in support of its claim for carrying out its manufacturing activity in the factory located at SEZ. However, AO disregarded the said claim of assessee on the ground that the component used in making the generator sets can be sold in the open market. Therefore, the activity of assembling the different components for making the generator sets does not amount to manufacture. Besides, the above, AO also observed that the excise registration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 80IB of the Act on the ground that assessee is not engaged in manufacturing activity as required for claiming the deduction u/s 80IB of the Act. However we understand that the process of assembling of different components like coupling and aligning with the engine and alternator requires great skill and technical expertise. In the process of assembling various components which are having different name and function are brought together and as a result of assembling it becomes new product which has a distinct name and function. However this entire process of assembling requires lot of technical and engineering expertise. Therefore, we hold that this activity of assembling amounts to a manufacturing activity. We also find that the issue is co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s directly covered by the judgment of the Apex Court in Aspinwall Co. Ltd. v. Commissioner of Income Tax, Eranakulam, (2001) 7 SCC 525. In that case the assessee was engaged, inter alia, in curing of coffee for which it had installed coffee-curing plants. It had claimed investment allowance under Section 32-A of the Income Tax Act which depended upon the issue as to whether the process of curing the coffee would amount to manufacturing or production activity. Answering the question in the affirmative, in favour of the assessee, the Court explained the expression manufacture as under:- 13. The word manufacture has not been defined in the Act. In the absence of a definition of the words manufacture it has to be given a meaning ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt case, the assessee after plucking or receiving the raw coffee berries makes it undergo nine processes to give it the shape of coffee beans. The net product is absolutely different and separate from the input. The change made in the article in a new and different article which is recognized in the trade as a new and distinct commodity. The coffee beans have an independent identity distinct from raw material from which it was manufactured. A distinct change comes about in the finished product. 7. When we apply the aforesaid principle on the facts of the present case, the irrefutable conclusion would be that the respondent company is indulging in manufacturing activity. We, thus, answer the question formulated in favour of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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