TaxTMI 
TaxTMI 
2007 (8) TMI 480
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....cts are that the assessee carried out the work relating to manufacture of photo identity cards of voters according to the specifications of Chief Electoral Officer, Haryana. Apart from this, the assessee also undertook the manufacture of photo identity cards for other companies also. The assessee submitted that in order to manufacture the photo identity cards it had to process the data, print the same on the cards, put hologram containing the State emblem, take photograph of the voter, match the photo with voter's data, affix the same on the card and laminate the cards and take out the master copy duly laminated, consisting 40 miniatures per page of the above cards for the Election Department. The assessee claimed that in order to carry out the aforesaid exercise it had installed various computers and other plant and machinery and therefore it had to be considered as an 'industrial undertaking' for the purposes of section 80-IA of the Act and that the profits therefrom are eligible for the benefit of section 80-IA. 4. The claim of the assessee was that it satisfies all the conditions for claim of deduction under section 80-IA of the Act. The Assessing Officer has denied claim whic....
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....y the photographer is manufacture. Hence, the assessee was entitled to investment allowance and the Departmental appeal being without merits was liable to be dismissed'. 27. The Hon'ble Calcutta High Court in the case of CIT v. Air Survey Co. of India (P.) Ltd. (supra) has held that the ultimate photographs which came to be produced as a result of the business activity of the assessee came within the expression 'manufacture' or production of 'article' or 'thing' and as such, the assessee was entitled to investment allowance under section 32A of the Act. In that case, the assessee, an air survey company, which derived its income from surveying, mapping aerial photography and aero-magnetic photography done for the Surveyor General of India and the Atomic Mineral Division of the Government of India, claimed investment allowance, under section 32A of the Act in respect of the aircraft radio purchased in the relevant year. This activity of the assessee was regarded as, falling within the purview of the expression 'manufacture' or 'production'. 28. In the case of CIT v. Emirates Commercial Bank Ltd. (supra), the Hon'ble jurisdictional Bombay High Court has held as under : 'In order to....
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....ur Processors (supra). In the light of the above discussion, we, therefore, hold that the assessee's activity of producing identity card amounted to production or manufacture of article or thing for the purpose of section 80-IA of the Act. The Assessing Officer shall treat the same accordingly and consider the assessee's claim under section 80-IA in the light of the various other conditions and provisions contained in section 80-IA of the Act. The Assessing Officer shall provide reasonable opportunity of being heard to the assessee for the purposes of computing deduction under section 80-IA in the light of our order made above. We order accordingly." 6. Further it is submitted that the other objections raised by the Assessing Officer have been duly explained and that the lower authorities have erred in denying the deduction. The learned counsel explained that the assessee has established a separate industrial undertaking with the object of manufacturing of photo identity cards; that the machinery and equipments in the said industrial undertaking is new and that such a unit has not been set up by splitting up or reconstruction of a business or property already in existence. Learned....
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....haw Wallace & Co. Ltd. [1993] 201 ITR 17 (Cal.). ( ix)CIT v. Oswal Data Processors [1997] 223 ITR 735 (MP). ( x)Medical Genetic Clinic & Laboratory v. ITO [2001] 79 ITD 14 (Mum.). ( xi)CIT v. Professional Information Systems & Management [2005] 274 ITR 242 (Guj.). ( xii)Datamatics Financial Services Ltd. v. Jt. CIT [2005] 95 ITD 23 (Mum.). ( xiii)CIT v. Peerless Consultancy & Services (P.) Ltd. [2001] 248 ITR 178 (SC). ( xiv)CIT v. Emirates Commercial Bank Ltd. [2003] 262 ITR 55 (Bom.). ( xv)CIT v. Air Survey Company of India (P.) Ltd. [1998] 232 ITR 707 (Cal.). ( xvi)Asstt. CIT v. Soni Photo Films (P.) Ltd. [1998] 67 ITD 81 (Delhi) (SB). ( xvii)CIT v. Laxmi Art Studio [2002] 120 Taxman 23 (Raj.). (xviii )CIT v. Ajay Printery (P.) Ltd. [1965] 58 ITR 811 (Guj.). ( xix)CWT v. Smt. Pratima Bhargava [2001] 249 ITR 123 (Delhi) ( xx)CIT v. A.R.J. Security Printers [2003] 264 ITR 276 (Delhi). ( xxi)CIT v. Penwalt India Ltd. [1992] 196 ITR 813 (Mum.). ( xxii)CIT v. Rajamohan Gashews (P.) Ltd. [1990] 185 ITR 472 (Ker.). (xxiii )CIT v. Indian Resins & Polymers [1999] 235 ITR 5 (Ker.). (xxiv )Chillies Export House (P.) Ltd. v. CIT [1997] 225 ITR 814 (SC). ( xxv)Dabur India Lt....
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.... and address of the voters constituency-wise in bilingual language. (b)Photography of the individual voter-wise is carried out with the help of cameras, attendant equipment viz., TV, VCR generator, monitor, video tapes etc. (c)Feeding the data from video tapes to the computer machine for onward processing of identity cards. (d)Application of hologram of the State on each such card and appending the signatures of the issuing authority etc. (e)Printing and lamination of the identity cards. (f)Miniature printing for onward transmission to the Election Department." Now the assessee contends that the photo identity card which it so manufactures as a final product is a completely new product in comparison with data from which it started the entire process of its manufacture. On this aspect, we have considered the decision of the Pune Bench of the Tribunal in the case of V.M. Jog Engg. Ltd. (supra). Relevant portion we have already extracted in the earlier part of this order. Under identical circumstances, the Tribunal by relying upon the decision of the Special Bench of the Tribunal in the case of Asstt. CIT v. Soni Photo Films (P.) Ltd. [1998] 67 ITD 81 (Delhi) and also the decisi....
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....ould be existence of plant and machinery in an "industrial undertaking" for the purposes of business of 'manufacture' or 'production' of any article or thing. It was argued that the assessee was a banking business and could not be construed as an "industrial undertaking". In this context, the Hon'ble High Court noted that the computers were used to process the customer's data and the output which resulted from the computers consisted of management reports. That even a bank would constitute an "industrial undertaking" in the sense that although it was rendering services, still in the course of its business, it produces articles and things. It was, therefore concluded that the conditions of section 32A(2)(b)( iii) are satisfied. The Hon'ble High Court specifically noted that the nature of service rendered by the bank to its customers involved the work of data processing and on the basis of such processing, information was provided to the customers. 13. In our view the parity of reasoning weighing with the Hon'ble Bombay High Court in the case of Emirates Commercial Bank Ltd. (supra) clearly applies in the instant case for the purposes of construing the eligibility of assessee's indu....
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.... the interpretation of words 'manufacture' or 'produce' appearing in section 80HH and another section 32A of the Act. In this context, the Hon'ble Supreme Court has laid down certain principles to adjudicate whether or not a particular activity is one of manufacturing or producing articles. The activity before the Hon'ble Apex Court was construction of a dam and it was held that the same could not be characterized as 'manufacture' or 'production of an article' within the meaning of section 80HH(2)(i) of the Act. In our view none of the decisions and the basis discussed by us in the earlier paragraphs are in dispute with the judgment of the Apex Court in the case of N.C. Budharaja & Co. (supra). The said judgment, in our view cannot be applied in the instant case to support the case of the revenue. We, therefore, deem it fit and proper to hold that the assessee is eligible for claim of deduction and accordingly set aside the orders of the CIT (Appeals) on this issue and direct the Assessing Officer to allow the claim of the assessee under section 80-IA in the above context. The Assessing Officer shall compute the claim of the assessee for relief under section 80-IA as above after af....
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.... assessee is that the notice under section 148 has been issued merely to cover up the non-issuance of a notice under section 143(2) within specified period. According to the learned counsel, the return of income of the assessee contained its claim for benefit under section 80-IA and the same was processed under section 143(1)(a) on 25-1-2001. According to him : the Assessing Officer was to disallow the claim of deduction under section 80-IA, it was permissible for him to issue notice under section 143(2) within the period specified and make scrutiny assessment in terms of section 143(3) of the Act. Having failed to do so, no fresh facts came to light and therefore according to him the mere claim of section 80-IA made in the return cannot be construed as an escapement of income so as to justify notice under section 148 of the Act. The learned counsel further submitted that the provisions of section 148 cannot be invoked as a mere device to overcome the non-issuance of notice under section 143(2) of the Act. The learned counsel placed reliance on various decisions viz., Babulal Lath v. Asstt. CIT [2002] 83 ITD 691 (Mum.), Bibi Gurdarshan Kaur v. CIT [1964] 51 ITR 1 (Punj.), CIT v. Ta....