TMI Blog2018 (12) TMI 1568X X X X Extracts X X X X X X X X Extracts X X X X ..... arts. As examined the relevant documents which were placed before the CIT(A) and it appears from those documents that the contract is a very complex contract involving technical design and installation for a project and that is why, the contract has a component called design so the design has to be done for a customer to suit his parameters. Obviously, the product made by the appellant is not a product which available "off the shelf". The product which is subject matter of consideration has been designed exclusively for the customers, which are Government of India Enterprises and the design is to suit the customers' need and unless it is operational the product does not come into being. This is the correct manner the contract has to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. The assessee filed return of income for the year under consideration, 2001-02 on 31.10.2001 admitting a total income of ₹ 10,89,650/-. The return was processed u/s.143(1) of the Act and notice under Section 143(2) of the Act was issued. Thereafter, the case was discussed by the Assessing Officer with the authorised representative of the assessee. With regard to the claim of deduction u/s.80IB of the Act, the assessee contended that they are manufacturers in specialised gas filling, measuring and weighing machines and supplying the same to various public sector oil companies for supply, installation and commissioning of the equipment in their plants and these machines and weighing systems are usable only on installation and com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch activity will not amount to manufacture. Therefore, the Assessing authority held that charges relatable to such installation work will not qualify for deduction u/s.80IB. Accordingly, the Assessing Officer estimated the erection charges at 30% of the work order, which has been billed by the assessee and the profit on that was estimated at 15% of the erection charges estimated. Accordingly, the Assessing Officer completed the assessment and computed the deduction u/s.80IB of the Act. 7. Aggrieved by the said order, the assessee preferred appeal before the Commissioner of Income Tax (Appeal) (CITA). The Appellate Authority considered the documents placed before it and after appreciating the same allowed the appeal filed by the Assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terpretation since the contract for the purpose of supply, installation and maintenance undoubtedly will not fall within the ambit of the term manufacture . However, it is the revenue's contention that the Assessing Officer was very reasonable in estimating the charges towards erection at 30% and computed the profit on the same only at 15% and in the given circumstances, the CIT(A) was not justified in disturbing the order passed by the Assessing Officer. 12. We have heard Mr.R.Sivaraman, learned counsel for the assessee and Mr.Karthick Ranganathan, learned Standing Counsel for the Revenue. 13. In our considered view, the order passed by the CIT(A) is a very reasonable order and deserves to be sustained. We support such conclusio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contract has to be interpreted and has rightly been interpreted by the CIT(A). The CIT(A) rightly concluded that the activity of the assessee in designing, engineering and fabricating of the plant and systems in the contract with Indian Oil Corporation Ltd., Bharat Petroleum Corporation Ltd., Bongaigaon Refinery and Petro Chemicals Ltd., is manufacture of article or thing. Thus, the conclusion arrived at by the CIT(A) holding that the criteria laid down under Section 80IA / 80IB of the Act stands fulfilled is the correct conclusion arrived at by the CIT(A) since the charges payable for the contract by the customers was a single component and the entire process involved is so inextricably connected, there is no room for the Assessing Office ..... X X X X Extracts X X X X X X X X Extracts X X X X
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