TaxTMI 
TaxTMI 
2007 (6) TMI 253
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....to use by the manufacturing process and hence the factory run for this purpose is an industrial undertaking. 4. That the benefits of ss. 80HH and 80-I are allowed to an industrial undertaking and not to any individual after satisfying the conditions mentioned in the section itself. 5. That the appellate order as a whole is bad in the eyes of law and justice." 3. In this case, the dispute relates to as to whether the assessee is entitled to deductions under s. 80HH and 80-I of the IT Act, 1961. The brief facts relating to this issue are that the assessee-company enjoys income from repair of transformers of U.P. State Electricity Board (hereinafter referred to as "UPSEB"). The AO framed the assessment for asst. yr. 1998-99 under s. 143(3) of the IT Act vide his order dt. 15th March, 2001 wherein he allowed deductions under s. 80HH at Rs. 83,366 and deduction under s. 80-I at Rs. 66,909 aggregating Rs. 1,50,545. The AO also made certain additions/disallowances. 4. The assessee challenged the order of the AO before the learned CIT(A). While examining the assessee's claim, the learned CIT(A) noticed that the assessee-company was engaged in the repair work of damaged transfor....
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.... components of transformers, which are as under: (i) H.V. and L.V. Leg Coil assembly- These are copper and aluminium wires which are transformed into coils and then it is assembled. (ii) H.V. and L.V. Transformer Bushing and Metal Part Assembly-Assembling of various bushes and metal parts. (iii) Conditioning of Transformer Oil Causing to Improve the Dielectric Strength Transformer Oil-Oil is purchased and then its conditioning and dielectric strength is done by assessee. Sri Amit Shukla, learned counsel for the assessee, submitted that the above components which are integral parts of an electrical transformer, are manufactured by the assessee with the aid and assistance of the plant and machinery. Sri Amit Shukla, learned counsel for the assessee, also submitted that the working/modus operandi of the assessee's unit is that it is provided only outer cover and inner core by the Power Corporation. All the internal damaged parts are retained by the Power Corporation and it supplies the assessee only a frame/outer steel tank, which normally can be made by any fabricator. After a long process of working, the assessee's unit converts it into full-fledged transformer which is ....
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.... to 1997-98. He, therefore, submitted that the learned CIT(A) was not justified in taking a different view only in respect of the present assessment year when from the asst. yr. 1992-93, deductions under ss. 80HH and 80-I were being allowed to the assessee consistently. It was also submitted that such deduction is allowable for a period of 8 years and the assessment year under consideration is the last year for claiming the deduction. Accordingly, it was submitted that the learned CIT(A) has wrongly withdrawn the deduction under ss. 80HH and 80-I of the Act. Reliance was placed on the following decisions: 1. Radhasoami Satsang vs. CIT (1991) 100 CTR (SC) 267 : (1992) 193 ITR 321 (SC), 2. CIT vs. Lagan Kala Upvan (2003) 179 CTR (Del) 243 : (2003) 259 ITR 489 (Del), 3. Director of IT vs. Lovely Bal Shiksha Parishad (2004) 186 CTR (Del) 384 : (2004) 266 ITR 349 (Del). In view of the above, Sri Amit Shukla, learned counsel for the assessee, submitted that the order of the learned CIT(A) on this issue may be reversed and that of the AO may be restored. 7. Sri Anadi Verma, learned senior Departmental Representative, strongly supported the order of the learned CIT(A). He fu....
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....under ss. 80HH and 80-I for the asst. yrs. 1992-93, 1993-94, 1994-95, 1995-96, 1996-97 and 1997-98. Even the AO has allowed deductions under ss. 80HH and 80-I to the assessee for the asst. yr. 1998-99. The deductions, in question, are available to an assessee for 8 years and the year under consideration is the last year. The learned CIT(A) has not brought any material on record to show that there was any change in the activities of the assessee as compared to earlier years. Thus it is clear that since asst. yrs. 1992-93 to 1997-98, the assessee has been consistently getting deductions under ss. 80HH and 80-I of the Act. In our considered view, the learned CIT (A) was not justified in withdrawing the deductions in question. In the case of CIT vs. Lagan Kala Upvan, Hon'ble Delhi High Court following the decision of the Hon'ble Supreme Court in the case of Radhasoami Satsang held as under: "We also find substance in the contention of learned counsel for the assessee that in the absence of any change in the objects and activities of the assessee, the AO was not justified in taking a different view only in respect of the present assessment year when from the asst. yr. 1970-71, exempt....