TMI Blog2009 (12) TMI 961X X X X Extracts X X X X X X X X Extracts X X X X ..... ts available under Section 80IB(4) of the Income Tax Act, 1961, these appeals are heard and disposed through this common order. 2. The principal issue raised in all these appeals and common to all the assessment years is the claim of deduction made by the assessee under Section 80IB of the Income Tax Act, 1961. 3. The assessee is a partnership firm engaged in the business of manufacture and sale of silting of printed/laminated paper and boards. The assessee has set up its manufacturing unit at Silvassa, which is a notified backward area for the purpose of deduction under Section 80IB(4). The deduction claimed by the assessee-firm under Section 80IB(4) was rejected by the AO on the ground that the new unit has been set up by reconstitu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manually for fine finish. In the process, certain reels not properly slitted are rejected and the materials are sent to packing section for packing and labeling after rewinding. After packing and labeling, the reels are dispatched to the end customers. 5. In fact the assessee has commenced its commercial production w.e.f. 30th June, 1999. Therefore, the assessee claimed the deduction under Section 80IB(4) for the first time for the assessment year 2000- 2001. 6. The assessee firm has been recognized as a manufacturing unit by the Sales Tax Department as well as by the Central Excise Department. The Industries Department also has recognized the assessee as a small scale industrial unit engaged in the manufacturing activity. In a recen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring activity or not, it is very necessary to bear in mind the above mentioned concern expressed by their Lordships of the Supreme Court. The assessee firm has established a new unit to manufacture slitted packing reels necessary for the said unit. The assessee has erected plant and machinery. The assessee is carrying on a number of manufacturing or conversion processes either directly or through job workers. It is not necessary that the assessee itself should carry out all the stages of manufacturing process. Outsourcing of certain processes is permissible in law as held by various courts. The arguments of the Revenue that the activities of the assessee do not amount to manufacturing activities as assessee is only slitting or cutting of pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t received by the assessee from M/s.Vimalchal Print Pack Pvt. Ltd. as deemed dividend income under Section 2(22)(e) of the I.T.Act. The finding has been arrived at by the lower authorities on the ground that M/s.Vimalchal Print Pack Pvt. Ltd., is a private limited company where two partners of the assessee firm, viz. Shri Girish V. Shah Harmish G. Shah along with their HUFs hold more than 10% of voting power each in the company, M/s.Vimalchal Print Pack Pvt. Ltd. 10. In this context, we have to see that the qualifying interest has been computed by the assessing authority after clubbing the personal interest of the partners and interest of the HUFs., together. In a recent order of the ITAT, 'A' Bench in the case of Hetu Co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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