2010 (9) TMI 836

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....her, on the facts and in law, the hon'ble Income-tax Appellate Tribunal was justified in holding that the Commissioner of Income-tax has exceeded his jurisdiction which is not permissible under the provisions of the Act, ignoring the fact that the order of the Assessing Officer passed under section 143(3) on December 15, 2006, was erroneous in so far as it was prejudicial to the interests of the Revenue ?   (ii) Whether, on the facts and in law, the hon'ble Income-tax Appellate Tribunal was justified in observing that the income earned on job-work basis amounts to manufacturing ignoring the fact that the income earned on account of fabrication has no nexus with the business of the industrial undertaking of the assessee-company ? &nb....

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....006, at income of Rs. 36,43,252. The Assessing Officer had allowed the deductions under section 80-IB of the Act to the assessee and disallowed deduction on receipts of lease rent on machinery and interest income.   The Commissioner of Income-tax-I, Ludhiana (for short "the CIT") in exercise of powers under section 263 of the Act came to the conclusion that the assessee was not entitled to deduction under section 80-IB on the following amounts :     Rs. (i) Fabrication charges 2,98,25,810 (ii) Insurance claim 1,01,129   2,99,27,739 Accordingly, the Commissioner of Income-tax, while invoking the powers under section 263 of the Act, concluded that the order of the Assessing Officer was erroneo....

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....e worthwhile to delve into the merits of the issue as well.   As noticed earlier, the Commissioner of Income-tax had exercised the revisional jurisdiction in respect of the fabrication charges on account of job-work done for others and insurance claim.   Learned counsel for the Revenue could not point out any error in the order of the Tribunal whereby the fabrication charges received by the assessee on account of job-work done for others was held to be on account of business of the industrial undertaking of the assessee, more particularly in view of the decision of this court dated December 5, 2008, in I. T. A. No. 543 of 2008 (CIT v. Impel Forge and Allied Industries Limited reported in [2010] 326 ITR 27 (P&H)).   F....