TMI Blog2017 (8) TMI 1657X X X X Extracts X X X X X X X X Extracts X X X X ..... tire sale of the manufactured products as has been made by the assessee company, to its sister concern and it cannot be deprived from claiming deduction u/s 80-IC on this score. Thus it is settled principle of law that for arguments sake, even if the assessee company is assumed to be into job-work even then it cannot be denied the benefit of section 80-IC of the Act as has been held by Hon ble Delhi High Court in judgment cited as CIT- III vs. Sadhu Forging Limited [ 2011 (6) TMI 9 - DELHI HIGH COURT ] When the assessee is manufacturing crank shaft the process of manufacturing the same is held to be a manufacturing activity by Hon ble Madras High Court rendered in a judgment cited as CIT vs. Tamil Nadu Heat Treatment and Fetting Services (P.) Ltd. [ 1998 (2) TMI 71 - MADRAS HIGH COURT ] Thus CIT (A) has arrived at legal and logical conclusion that the assessee company is engaged in manufacturing activities and is entitled for deduction u/s 80-IC. - Decided in favour of assessee, Unexplained capital introduction by the assessee - assessee has failed to bring on record any evidence to prove the genuineness of the capital introduction - HELD THAT:- On perusal of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Dehradun, for the Assessment Years 2009-10 2010-11 respectively on the grounds inter alia that :- ITA NO.5787/DEL/2012 (AY 2009-10) 1. Whether the Ld. CIT(A) was correct, on facts and in the circumstances of the case, in owing the claim of deduction u/s 80IC of the I.T. Act, 1961 and not appreciating the fact that the assessee is not engaged in any manufacturing activity and no any new product is being manufactured except fine tuning of the product and other than this only manipulation of accounts 2. Whether the Ld. CIT(A) was correct, on facts and in the circumstances of the case, in deleting the additions made in respect of introduction of capital without appreciating the fact that the assessee did not produce any documents in support of his claim which can prove that the capital was introduced out of his savings. ITA NO.4521/DEL/2013 (AY 2010-11) 1. Whether the Ld. CIT(A) was correct, on facts and in the circumstances of the case, in allowing the claim of deduction u/s 80IC of the I.T. Act, 1961 and not appreciating the fact that the assessee is not engaged in any manufacturing activity and no any new product is being manufact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case. GROUND NO.1 OF ITA NO.5787/DEL/2012 (AY 2009-10) GROUND NO.1 OF ITA NO.4521/DEL/2013 (AY 2010-11) 6. Ld. DR for the Revenue challenging the impugned order contended inter alia that that the assessee has failed to prove any manufacturing activities during the years under assessment but it was only doing jobwork for its sister concern; that the assessee has made payment to the tune of ₹ 1,03,00,000/- to its sister concerns; that the CIT (A) has accepted additional evidence without providing an opportunity of being heard to the AO; that only raw material was coming and going out of the assessee s unit with different nomenclature under internal arrangement with its sister concerns. 7. However, on the other hand, ld. AR for the assessee to repel the argument addressed by the ld. DR contended that no additional evidence has been taken on record by ld. CIT (A) nor any such evidence was pointed out by the ld. DR, rather remand report was called upon by the ld. CIT (A) during appellate proceedings; that assessee s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee in giving heat treatment for which it had earned labour charges and job-work charges, it can thus be said that the appellant had done a process on the raw material which was nothing but a part and parcel of the manufacturing process of the industrial undertaking - These were gains derived from industrial undertakings and so entitled for the purpose of computing deduction under Section 80lB - Decided in the favour of the assessee 11. Moreover, when the assessee is manufacturing crank shaft the process of manufacturing the same is held to be a manufacturing activity by Hon ble Madras High Court rendered in a judgment cited as CIT vs. Tamil Nadu Heat Treatment and Fetting Services (P.) Ltd. 1998 (2) TMI 71 Madras High Court wherein it is held as under :- We have to take note of the fact that the process of heat treatment to crankshaft, etc., were absolutely essential for rendering it marketable. Automobile parts, as crankshafts, need to be subjected to heat treatment to increase the wear and tear resistance to remove the inordinate stress and increase tensile strength. The raw untreated crank shafts and the like can never be used in an automobile industry. Thu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apital introduction. However, perusal of the assessment order itself shows that, the assessee has brought on record ITR of Vinay K. Naik, Director of the Company, who has made capital introduction for AY 2009-10 but the AO has simply made an addition by observing that, the assessee has simply said that the investment has been made from his saving and has submitted ITR for AY 2009-10 only and nothing else . 15. When the Director of the company has brought on record his ITR for AY 2009-10 it was for the Revenue to call supporting documents, if needed, but he has not preferred to do so and impliedly admitted the genuineness of the capital introduced by the assessee. So, in these circumstances, we are of the considered view that there is no illegality or perversity in deleting the addition of ₹ 13,00,000/- by ld. CIT (A) made by the AO. Consequently, Ground No.2 of ITA No.5787/Del/2012 (AY 2009-10) is determined against the Revenue. GROUND NO.2 OF ITA NO.4521/DEL/2013 (AY 2010-11) 16. AO made an addition of ₹ 5,08,408.06 (₹ 2,41,250/- + ₹ 2,67,158/-) on the ground that the payment of ₹ 2,67,158.06 made to M/s. Adecco under the head ..... X X X X Extracts X X X X X X X X Extracts X X X X
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