Contact us   Feedback   Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2016 (3) TMI 918 - ITAT KOLKATA

2016 (3) TMI 918 - ITAT KOLKATA - TMI - Disallowance u/s. 80 IB - whether assessee is not engaged in manufacturing activity as required for claiming the deduction u/s 80IB as per AO -Held that:- Assembling of different products which are giving rise to a new product and which has become a new name in the market and functiothern will be regarded as “manufacturing activity" thus liable for 80IB deduction. See Commissioner of Income-tax Versus Jackson Engineers Ltd. [2009 (12) TMI 649 - Delhi High .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

/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)-I, Kolkata has erred in deleting the disallowance u/s. 80 IB to the extent of ₹ 11,02,777/- although the assessee had no infrast .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nce made u/s. 80IB of the Act. 3.1 Briefly stated facts are that assessee is a Limited Company engaged in the business of manufacturing of diesel generating sets and accessories. It has manufacturing units at Dadra, Silvassa & Pondicherry at Special Economic Zone (SEZ for short). The assessee has claimed a deduction of ₹ 11,02,777/- u/s. 80IB of the Act. During the course of assessment proceedings Assessing Officer objected on the claim made under section 80IB of the Act by the assesse .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 generat .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e deleted the disallowance made by AO by observing as under:- Similarly, assessee claimed deduction u/s. 80IB in respect of unit at Silvassa for ₹ 11,02,777/- by filing form no. 10CCB. The A/R relied upon the case of Delhi High Court reported in 341 ITR (518) to support his contention that the DG set as the final product was distinct in name, character and function from the component used and accordingly it would amount to manufacturing activity. Keeping in view the facts and circumstances .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the aforesaid discussion, we find that AO has disallowed the claim of assessee u/s. 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 funct .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

hi High Court exactly on similar activity has regarded as manufacturing activity and in the present case also assessee was manufacturing the diesel generating sets where assesseecompany assembles diesel generating sets. Several components go in relation to the making of diesel generating sets and some of the major components are engine, alternator, engine instrument panel, base place, fuel tank, control panel, battery, measuring instruments and gauges, radiator, silencer and other components. Th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ture activity . In the case of assessee itself, this issue stands decided in its favour by the judgment of this Court deciding on 11.08.2009 in ITA No. 149 of 2001 and other connected cases. Relevant portion of that judgment reads as under: 6. Submissions before us remain the same. We are of the opinion that the case is 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, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nition of the words manufacture it has to be given a meaning as is understood in common parlance. It is to be understood as meaning the production of articles for use from raw or prepared materials by giving such materials new forms, qualities or combinations whether by hand labour or machines. If the change made in the article results in a new and different article then it would amount to a manufacturing activity. 14. This Court while determining as to what would amount to a manufacturing activ .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nd extent of processing may vary from one case to another, and indeed there may be several stages of processing and perhaps a different kind of processing at each stage. With each process suffered, the original commodity experiences a change. But it is only when the change, or a series of changes take the commodity to the point where commercially it can no longer be regarded as the original commodity but instead is recognized as a new and distinct article that a manufacture can be said to take p .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version