TaxTMI 
TaxTMI 
2006 (11) TMI 140
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....The applicant wants to establish a manufacturing facility for the formulation of pharmaceuticals in partnership with one of her family members in the state of Himachal Pradesh, India to avail of the tax holiday under section 80-IC of the Act. The Central Government has declared Income Tax Holiday for a 10 years' period for industrial undertakings in the state of Himachal Pradesh. The proposed industrial unit would be an integrated unit and would exist as a viable unit. Bayer Health Care Pharmaceuticals (for short Bayer Health) proposes to have their products manufactured at the proposed unit by outsourcing the production but under their own direct supervision, license and control, for which Bayer Health would pay negotiated proc....
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....r the said section. That for claiming the benefit, the industrial undertaking/enterprise, is required to be situated in a specified area. The proposed firm (undertaking), situated in Himachal Pradesh, would belong to the applicant and not to M/s. Bayer Health, Mumbai. By no stretch of imagination M/s. Bayer Health located at Mumbai can claim the exemption under section 80-IC by outsourcing the manufacture of pharmaceuticals at the applicant's unit. 3. The applicant in the rejoinder has stated that the direct business procured by the firm would involve formulation/processing of pharmaceutical products for companies other than Bayer Health. That M/s. Bayer Health would establish a place of business in the state of Himachal ....
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....our with their own quality control. ……….. It may, however, be mentioned here that these facts, as stated in the rejoinder, are contrary to the facts stated in the original application which read as under: "The finished products would be produced by the firm under the direct control and supervision of Bayer Healthcare Pharmaceuticals." Whereas now, it is stated that Bayer Health Care Pharmaceuticals would carry out manufacturing activities on their own. It is thus seen that the complete facts have not been provided by the applicant." 5. During the course of oral hearing Shri Harinder Kumar, Addl. CIT, Chandigarh appearing for the Commissioner, argued that application is pre-mature and not maintainable since the important facts....
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.... the rival contentions of the counsel for the applicant, Commissioner and also examined the deed of partnership executed on 4th day of October 2006 between the applicant and her husband Mr. Vikramjeet Singh Mamik. It is seen that the deed has not been registered and it is also not mentioned whether the partners and the witnesses signed it in India or Netherlands. The deed is silent as to the place where the Head Office of the firm is to be located. Clauses 6,7 & 8 of the deed, being apposite, are extracted below: "6. That the party of the first part take all decisions concerning vital policy matters such as acceptance or rejection of business opportunities, expansion or contraction of business whether in the same line of....
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.... xx (2) A Hindu undivided family, firm or other association of persons is said to be resident in India in any previous year in every case except where during that year the control and management of its affairs is situated wholly outside India." The word "affairs" must mean affairs which are relevant for the purpose of the Act and which have some relation to income. It is settled, that the expression "control and management" means de facto control and management and not merely the right or power to control and management [C.I.T Bombay City v. Nandlal Gandalal 40 ITR 1(SC)]. In the present case, since the de facto control and management of the affairs would be with the resident partner i....