TaxTMI 
TaxTMI 
1996 (9) TMI 203
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....anufacturers and getting tanks, vessels, piping, etc., fabricated and rubber lined as per technical specifications/designs/drawings provided by the company, from our sub-contractors. The entire fabrication work is carried out under the constant supervision of the company's engineers. On completion of fabrication work, the equipment/components/materials are taken to customers' site for erection of plant which is also completed by company's engineers and employees. Therefore, the end product of materials subjected to manufacture is completely changed and modified by producing an article such as plant." 3. The assessee had made a claim for deduction under section 80-I before the Assessing Officer which has been rejected by him. The reason given by the Assessing Officer is that receipts by way of technical and consultancy services by the assessee exceeded the gross total income shown by the assessee. According to the Assessing Officer, the receipts by way of technical and consultancy services could not be treated as income derived from an industrial undertaking and, therefore, the same could not qualify for the deduction. He noted that the receipts by way of technical and consultanc....
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....cturer of water treatment plants was a manufacturer of chemicals machinery and therefore, entitled to concession under section 80-I of the Act, was dismissed by the Hon'ble Supreme Court. He also referred to the various details and statement of expenditure and accounts as well as the photographs of the plant manufactured by the assessee in support of his contention. He also referred to the decision of the Tribunal, Ahmedabad Bench in the case of Enviro Central Associates v. Asstt. CIT [IT Appeal No. 1650 (Ahd.) of 1990], a copy of which is enclosed in the paper book in support of the contention that the assessee is running an industrial undertaking. He also referred to the decision of this Tribunal in the case of Electrameric Systems (P.) Ltd. [IT Appeal No. 598 (Pune) of 1990, dated 10-1-1995] wherein it has been held that income arising out of erection work has to be treated as income arising out of the business of industrial undertaking and, therefore, entitled to the relief under section 80-I. 6. On the other hand, the learned departmental, representative has heavily relied upon the decision of the CIT(A). According to him, the so-called plant fabricated and manufactured by ....
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....ceed on this issue. There is no dispute by the lower authorities that the assessee is carrying on an industrial undertaking. Both the parties have accepted this proposition. The reasons given by them are entirely different. It is also not in dispute that the assessee is manufacturing various components though through sub-contractors which are used in the manufacture of the plant. It is also not in dispute that the fabrication work is done at the customers' site for the purpose of erecting the plant. Therefore, the only question before us is whether the so-called plant erected at the site of the customers by the assessee can be said to be an article or thing. After the decision of the Hon'ble Supreme Court in the case of N.C. Budharaja & Co., there cannot be now a dispute to the legal position that the assessee must be engaged in the manufacturing of an article or thing. The only reasoning given by the CIT(A) for holding against the assessee is that the plant as such is embedded to the earth and, therefore, ceases to be an article or thing. 9. After giving our due consideration, we are unable to accept the reasoning given by the CIT(A). This reasoning of the CIT(A) is not support....
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....cannot be said that the plant is embedded to the earth when it is erected at the site of the customers. The "embedded in the earth" have been meant as in the case of walls or buildings as per section 3 of the Transfer of Property Act. If this criteria is to be adopted then erection of plant cannot be equated with the wall or building. Merely the plant is attached to earth by fixing the same on the foundation by nut and bolts, it cannot be said that it is embedded in the earth or it is attached to the earth. It cannot be disputed that such plants can be shifted from one place to another by unscrewing the same. This submission of the assessee has not been disputed by the learned departmental representative. Therefore, we are of the considered view that the assessee is engaged in the business of manufacturing and fabricating of plant which is an article or thing as mentioned in section 80-I. 10. In the course of hearing, the learned departmental representative had made a reference to various details to show that the assessee is not a manufacturer since relevant expenditures like employees' remuneration, power and fuel expenses, etc., have not been shown by the assessee. According t....