Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

Deputy Commissioner of Income-tax Versus M/s. Saint Gobain Crystals & Detectors (I) Ltd.

2016 (5) TMI 687 - ITAT BANGALORE

Benefit of deduction u/s 10B denied - Held that:- From plain provisions of sec.10B, we hold that the period of 10 consecutive years should be reckoned from the assessment year 1997-98 i.e. from the year of commencement of production or manufacture of an article or thing upto the assessment year 2006-07. In the present appeal, we are concerned with the assessment year 2008-09, therefore, the respondent-assessee-company is not entitled for deduction u/s 10B of the Act as the period of 10 consecuti .....

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 following grounds of appeal: 1. The order of the learned CIT(A) is opposed to law and facts of the case. 2. On the facts and in the circumstances of the case The Ld. CIT(A) has erred in allowing the assessee's claim of deduction u/s 10B without considering the fact that the assessee is not manufacturing any new article or thing, rather assembling instruments and apparatus for measuring and detecting ionizing radiators and processing undertaken by the assessee would not bring anything ne .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

begins manufacture or production of articles or things or computer software. 4. On the facts and in the circumstances of the case the learned-CIT(A) erred in holding that for the purpose of accounting 10 consecutive assessment years, the assessment years for which the assessee had opted out of section 10B have to be excluded without considering the statutory position that assessee's option to not to claim deduction u/s 10B for certain assessment years will not alter the period of 10 consecut .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ssessee is a company engaged in the business of assembly of instruments and apparatus for measuring and detecting Ionising Radiators. Return of income for the assessment year 2008-09 was filed on 30/9/2008 and subsequently return of income was revised on 22/2/2010 at a total income of ₹ 7,57,274/-. In the return of income, the respondent-assessee-company has claimed deduction under the provisions of sec.10B of the Income-tax Act, 1961 [hereinafter referred to as 'the Act' for short .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

on was claimed in the assessment years 1997-98 and 1998-99 as the respondent-assessee-company opted out of the provisions of sec.10B deduction should be allowed for a period of 10 years commencing from the assessment year 1999-00 to 2008-09. 4. Being aggrieved, respondent-assessee-company filed an appeal before the CIT(A) who vide impugned order held that the respondent-assessee-company was entitled to deduction under the provisions of sec.10B. While coming to this conclusion, the CIT(A), after .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

hould be reckoned from the year 1999-00. He, accordingly, held that the respondent-assessee-company was entitled for deduction u/s 10B of the Act. 5. Being aggrieved by this direction, revenue is in present appeal before us. 5.1 The learned Departmental Representative (DR) has invited our attention to the plain provisions of sec.10B of the Act. He submitted that the activities of the respondent-assessee-company are not in the nature of manufacture and the period of 10 consecutive years should be .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

comes within the meaning of manufacture is covered by the decision of the Hon ble High Court of Karnataka in the assessee s own case reported in 57 Taxmann.com 152. 5.3 As regards reckoning of period of 10 consecutive years, learned AR of the assessee submitted that since respondentassessee- company opted out of provisions of sec.10B for two years, first year should be reckoned from 1999-2000 onwards. Accordingly, he submitted that the respondent-assessee-company is entitled for deduction even .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ng i.e. activity of the respondent-assessee-company i.e. assembly of instruments and apparatus for measuring and detecting Ionising Radiators, is a manufacturing activity or not, the Hon ble High Court of Karnataka in the assessee s own case held as under: 7. The word manufacture has been subject-matter of various decisions. After reviewing those decisions, this court, in the case of CIT vs. Murudeshwar Décor Ltd. (2014) 227 Taxman 29 and connected matters, disposed on 1/7/2014, at para.1 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ase. The manufacture is the end result of one or more processes through which the original commodities are made to pass. The process in manufacture or in relation to manufacture implies not only the production but also various stages through which the raw material is subjected to change by different operations. It is the cumulative effect of the various processes to which the raw material is subjected that the manufactured product emerges. The nature and extent of processing may vary from one ca .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

not manufacture. The manufacture is a transformation of an article which is commercially different from the one which is conferred. The essence of manufacture is the change of one object to another for the purpose of making it marketable. The essential point is in manufacture, something is brought into existence which is different from that which originally existed, in the sense that the thing produced is by itself a commercially different commodity. The moment there is transformation,. a new c .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

id process, the product which comes under that process is different from that which originally existed, in the sense that the thing produced is by itself a commercially different commodity. The moment there is transformation, a new commodity commercially known as distinct and separate commodity having its own character, use and name, whether it be the result of one process or several processes, manufacture takes places and duty is attracted. Therefore, the Tribunal was justified in holding that .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

article or thing. 8. However, on the second ground, we are unable to concur with the view of the CIT(A) that the period of consecutive 10 years should be reckoned from the year 1999-00 i.e. the year from which respondent-assessee-company started claiming deduction u/s 10B. The relevant provisions of sec.10B are as under: SPECIAL PROVISIONS IN RESPECT OF NEWLY ESTABLISHED HUNDRED PER CENT.EXPORTORIENTED UNDERTAKINGS 10B (1) Subject to the provisions of this section, a deduction of such profits an .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ssessment year, its profits and gains had not been included by application of the provisions of this section as it stood immediately before its substitution by the Finance Act, 2000, the undertaking shall be entitled to the deduction referred to in this sub-section only for the unexpired period of aforesaid ten consecutive assessment years : Provided further that for the assessment year beginning on the 1st day of April, 2003, the deduction under this sub-section shall be ninety per cent. of the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

on applies to any undertaking which fulfils all the following conditions, namely :- (i) it manufactures or produces any articles or things or computer software ; (ii) it is not formed by the splitting up, or the reconstruction, of a business already in existence : Provided that this condition shall not apply in respect of any undertaking which is formed as a result of the re-establishment, reconstruction or revival by the assessee of the business of any such undertaking as is referred to in sect .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

or things or computer software exported out of India are received in, or brought into, India by the assessee in convertible foreign exchange, within a period of six months from the end of the previous year or, within such further period as the competent authority may allow in this behalf. Explanation 1.- For the purposes of this sub-section, the expression "competent authority" means the Reserve Bank of India or such other authority as is authorised under any law for the time being in .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ears to the profits of the business of the undertaking, the same proportion as the export turnover in respect of such articles or things or computer software bears to the total turnover of the business carried on by the undertaking. (5) The deduction under sub-section (1) shall not be admissible for any assessment year beginning on or after the 1st day of April, 2001, unless the assessee furnishes in the prescribed form, along with the return of income, the report of an accountant, as defined in .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sessment year,- (i) section 32, section 32A, section 33, section 35 and clause (ix) of sub-section (1) of section 36 shall apply as if every allowance or deduction referred to therein and relating to or allowable for any of the relevant assessment years, in relation to any building, machinery, plant or furniture used for the purposes of the business of the undertaking in the previous year relevant to such assessment year or any expenditure incurred for the purposes of such business in such previ .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n 74, in so far as such loss relates to the business of the undertaking, shall be carried forward or set-off where such loss relates to any of the relevant assessment years ; (iii) no deduction shall be allowed under section 80HH or section 80HHA or section 80-I or section 80-IA or section 80-IB in relation to the profits and gains of the undertaking ; and (iv) in computing the depreciation allowance under section 32, the written down value of any asset used for the purposes of the business of t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nder this section is transferred, before the expiry of the period specified in this section, to another Indian company in a scheme of amalgamation or demerger- (a) no deduction shall be admissible under this section to the amalgamating or the demerged company for the previous year in which the amalgamation or the demerger takes place ; and (b) the provisions of this section, shall as far as may be apply to the amalgamated or resulting company as they would have applied to the amalgamating or the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Explanation 2.- For the purposes of this section,- (i) "computer software" means,- (a) any computer programme recorded on any disc, tape, perforated media or other information storage device ; or (b) any customized electronic data or any product or service of similar nature, as may be notified by the Board, which is transmitted or exported from India to any place outside India by any means ; (ii) "convertible foreign exchange" means foreign exchange which is for the time bein .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ut does not include freight, telecommunication charges or insurance attributable to the delivery of the articles or things or computer software outside India or expenses, if any, incurred in foreign exchange in providing the technical services outside India. (iv) "hundred per cent. export-oriented undertaking" means an undertaking which has been approved as a hun-dred per cent. export-oriented undertaking by the Board appointed in this behalf by the Central Government in exercise of 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

de India shall be deemed to be the profits and gains derived from the export of computer software outside India. Explanation 4.- For the purposes of this section, "manufacture or produce" shall include the cutting and polishing of precious and semiprecious stones. It may be mentioned that the provisions of sec.10B conferred tax holiday for a period of 5 years initially. Thereafter, the provisions were amended w.e.f. 1/4/1999 and tax holiday period was extended to 10 years and it was al .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

mpany had opted out of the provisions of sec.10B for assessment years 1997-98 and 1998-99 and therefore, the period of 10 consecutive years should be reckoned from assessment year 1999-00 onwards. This contention of the respondent-assessee-company cannot be accepted having regard to the plain provisions of sec.10B, which clearly lay down that period of 10 consecutive years to be reckoned from the assessment year in which production or manufacture of an article or thing was commenced. Same reason .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     bird's eye view     ↓  


|| 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