Deduction allowed for third-party manufacturing under section 80IC

The Tribunal upheld the Ld. CIT(A)'s decision to allow deduction for third-party manufacturing under section 80IC of the Income-tax Act. The assessee's manufacturing for third parties, using its own raw materials and resources, qualified for the deduction despite the revenue's challenge based on raw materials supplied by third parties. The consistent treatment in subsequent assessment years and confirmation by the Assessing Officer supported the allowance of the deduction. The Tribunal dismissed the revenue's appeal, affirming the deduction for third-party manufacturing under section 80IC.

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Issues Involved:
Appeal against the action of the Ld. CIT(A) in allowing deduction u/s. 80IC of the Act for third party manufacturing.

Analysis:
The appeal was filed by the assessee against the order of the Commissioner of Income Tax (Appeal), challenging the action of the Ld. CIT(A) who did not allow third party manufacturing under section 80IC of the Act. The assessee claimed that manufacturing for third parties, though done as per their specifications, should be considered as done by the assessee itself for the purpose of claiming deduction u/s. 80IC. The Ld. CIT(A) rectified the mistake in the original order and allowed the deduction under 'third party manufacture'. The revenue challenged this action, contending that the manufacturing was done using raw materials supplied by third parties and hence did not qualify for the deduction. However, the Ld. CIT(A) considered the findings of the Joint Commissioner of Income-tax and the Assessing Officer, who confirmed that the manufacturing was indeed done by the assessee using its own raw materials and sold to third parties after charging VAT.

The Ld. CIT(A) noted that in the subsequent assessment year, the Assessing Officer himself allowed the claim for third party manufacture under section 80IC. The Ld. CIT(A) also considered the report from the Assessing Officer confirming the nature of manufacturing done by the assessee. Given these findings and the consistent treatment in the subsequent assessment year, the Ld. CIT(A) dismissed the revenue's appeal, upholding the deduction for third party manufacturing under section 80IC. The Tribunal concurred with the Ld. CIT(A)'s decision, noting that the assessee had used its own raw materials and resources for manufacturing the products for third parties, qualifying for the deduction under section 80IC.

Therefore, the Tribunal dismissed the revenue's appeal, affirming the order passed by the Ld. CIT(A) in allowing the deduction for third party manufacturing under section 80IC of the Income-tax Act, 1961.

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