TMI Blog2020 (7) TMI 215X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the assessee. It is an integral part of the whole process of manufacture of footwear undertaken by the assessee. A.O. while completing the reassessment, admits that the assessee is eligible for deduction, but granted proportionate deduction by excluding job work estimated at 25% of the gross total income. The assessee has satisfied all the conditions for claiming deduction u/s 80IB and proportionate disallowance of job work for the purpose of computing deduction u/s 80IB is unwarranted and uncalled for. Therefore CIT(A) was correct in directing the A.O. to grant deduction u/s 80IB of the I.T.Act as claimed by the assessee. Delhi Bench of the Tribunal in the case of Rajiv Bhatnagar v. DCIT [2012 (12) TMI 1104 - ITAT DELHI ] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whole chain of manufacturing process and the process is eligible for deduction U/s 80IB, thereby allowing the profit relates to manufacturing through job works done by other parties. 5. The assessing officer reached the conclusion that the assessee is not eligible for deduction U/s 80IB in respect of the amount towards the portion of the manufacturing work done by other parties. In view of this, the decision of the Commissioner of Income Tax (Appeals) arrived at without appreciating the complete facts of the case and not considering the view that the assessee will not be eligible for 80IB deduction in respect of profit relating to articles manufactured through job work. 6. For these and other grounds that may be urged at the time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls available the assessee had incurred ₹ 6,67,507 towards job work which means that a portion of the manufacturing work was done by other parties and that the assessee is not eligible for the profit relating to articles manufactured through job work since the job work charges constituted 25% of the total manufacturing expenses (sch Q ) a sum of ₹ 5,14,757 being 25% of the gross total income will not be eligible for computing deduction u/s 80IB. 5. Aggrieved by the reassessment order u/s 143(3) r.w.s. 147 of the I.T.Act, the assessee preferred the appeal to the first appellate authority. The CIT(A) held the process of outsourcing / job work was an integral part of the processing and manufacture undertaken by the assessee, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TA No.1026/Del/2011 order dated 17th December, 2012] . 7. I have heard the learned Departmental Representative and perused the written submission filed by the assessee. Section 80IB of the I.T.Act is with regard to deduction of profits and gains from certain industrial undertakings. In the instant case the job work / process of outsourcing is nothing but stitching of footwear and is done under the direct supervision of the assessee. It is an integral part of the whole process of manufacture of footwear undertaken by the assessee. The A.O. while completing the reassessment, admits that the assessee is eligible for deduction, but granted proportionate deduction by excluding job work estimated at 25% of the gross total income. The assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
