TMI Blog2008 (10) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... Standing Counsel for the appellant. Respondent-assessee in person. JUDGMENT The judgment of the court was delivered by ADARSH KUMAR GOEL J. - The revenue has preferred this appeal under Section 260A of the Income Tax Act, 1961 (in short, 'the Act'), against the order dated 16.3.2007 passed by the Income Tax Appellate Tribunal, Delhi Bench 'I', New Delhi in ITA No.83/DEL/2005 for the assessment year 2001-02, proposing to raise following substantial questions of law:- "(a) Whether, on the facts and circumstances of the case, the Hon'ble Income Tax Appellate Tribunal, was right in law in ITA No.505 of 2007 directing the Assessing Officer to allow deduction under section 80-IA whereas the question before Income Tax Appellate Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r section 80IA of the Act with respect to unit-I. Before we proceed to dilate on the legal position, it would be appropriate to understand the fact position with regard to the process being carried out in Unit-I by the assessee. The finished product of the assessee is motorcycle wheel. The raw materials/components used are:- 1. Rim 2. Tyre 3. Tube 4. Bearing 5. Drum 6. Spoke 7. Nipple 8. Coller The process as outlined by the assessee and that considered by the lower authorities is detailed as shown in the paper book on record:- 1. Drum Assembly In this process the Collar Bearing are pressed in the Drum with the help of pneumatic press. 2. Drum Spoke Assembly 18 No. each of outer inner spokes are assembled wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... can work as one equipment which is termed as a motorcycle wheel. The final product which is achieved is a result of an assembling process. The final product is distinct in character and use than each of the components used. This is for the reason that none of the components or the raw material used can partake the character of or be a substitute for the functioning or the commercial value attributable to the final product. 9. The moot question is whether assembling of different components, which gives rise to an article which is totally different from the parts, amounts to 'manufacture' or not? This proposition has been directly answered by the Hon'ble Bombay High Court in the case of Tata Locomotives Engineering. Co. Limited, [196 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) Limited v. Collector of Customs, (2000) 1 SCC 549 and UOI v. Delhi Cloth General Mils Co. Limited, (1963) (Supp) SCR 586 wherein the expression 'manufacture' has been understood to mean transformation of the goods into a new commodity commercially distinct and separate having its own character, use and name whether it be the result of one or several processes. 11. Considered in this light, factually speaking in the instant case the various parts assembled by the assessee using its machinery results in achieving of a final product. The parts or components utilized by the assessee in its assembling process undergo a transformation and result into a product namely motorcycle wheel, which is distinct and separate commodity in c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt including Union of India v. Delhi Cloth and General Mills, [1963] AIR 1963 SC 791, paragraph 14, Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes) v. M/s. PIO Food Packers, [1980] 46 STC 63 ; AIR 1980 SC 1227, Empire Industries Limited v.Union of India, [1986] 162 ITR 846 ; AIR 1986 SC 662 and Ujagar Prints etc. v. Union of India [1989] 179 ITR 317 ; AIR 1989 SC 516. 10. In absence of any definition in the Act, the word 'manufacture' used in section 80-IB has to be given ordinary meaning. 11. In N.C. Budhiraja (1993) 204 ITR 412, the Hon'ble Supreme Court considered earlier judgment in Pio Food Packers [1980] 46 STC 63; AIR 1980 SC 1227, particularly the observation that where ..... X X X X Extracts X X X X X X X X Extracts X X X X
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