TaxTMI 
TaxTMI 
2013 (9) TMI 197
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....claimed under section 10B of the Income Tax Act, 1961 as a speaking order has not been passed by Ld. CIT(A) on the facts that have been brought out by the Assessing Officer to support the contention that no manufacturing activity was carried out by the assessee. 2. The appellant craves leave for reserving the right to amend, modify, alter, add or forego any ground(s) of appeal at any time before or during the hearing of this appeal." The grounds in assessee's cross objection no.51/Del/2011 read as under :- "1. That having regard to the facts and circumstances of the case, Ld. CIT (A) has erred in law and on facts in rejecting the admission of additional evidences filed by the assessee under rule 46A of Income Tax Rules. 2. That having regard to the facts and circumstances of the case, Ld. CIT (A) has erred in law and on facts in not deleting the addition of Rs.46,643/- made by Ld. AO on account of short term capital gain. 3. That the cross objector craves the leave to add, amend, modify, delete any of the ground(s) of cross objection before or at the time of hearing." The revenue has taken the following grounds o....
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....ure on the electricity for the year was nominal. Such small expenditure on the electricity shows that there was no manufacturing activity carried out at NSEZ. There was no business promotion expenses debited in the profit & loss account. She vehemently pleaded that the CIT (A) was not justified in granting the relief to the assessee. She finally relied on the order of the Assessing Officer. 5. While pleading on behalf of the assessee, the learned AR submitted that assessee is engaged in the business of manufacturing of engineering items, machines ands equipments for various kinds of projects. The assessee company is 100% EOU situated at Noida Export Processing Zone, Noida (U.P.). It is a custom bounded area. A legal agreement has been entered into between the manufacturing units situated in SEZ and the President of India through Development Commissioner (NEPZ), SEZ Noida. The assessee was carrying out activities since many years and deduction u/s 10B was allowed in earlier years. The claim of exemption was made u/s 10B in the return of income. It was supported by audited report. The assessee is engaged in the manufacturing of special purpose plant. This aspect is supported by th....
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.... installation. The Assessing Officer's contention that trial runs are conducted at customer site is not having any relevance for granting the exemption u/s 10B for manufacturing the items at the eligible unit. The learned AR submitted that the assessee manufactures the special purpose high precision machines and designed as per the specific requirements of the customers and manufacturing succeeds the engineering evaluation of the technical needs of the customers. Ld. AR submitted that the assessee requires lathe, welding, cutting, cranes, electrical hoists, chain pulley and various tools which are used in manufacturing of these machines. The Assessing Officer's observation that assessee has not more machines is baseless. The requirement of the machine is minimum due to the fact that most of the work is done manually by labourers whose wages had been paid to the tune of Rs.23 lakhs in the profit and loss account. The consultancy charges were debited of Rs.28 lakhs towards engineers and consulting companies. Therefore, lower expenditure debited for electricity will not give the scope for taking adverse inferences against the assessee. The assessee also put his evidences in the form o....
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....ng zone in view of the Export Import Policy 1997-2002 for the establishment of an undertaking for manufacturing of engineering products with a condition that entire production excluding rejects and sales in the Domestic Tariff Areas per provisions of Export an import policy. The assessment for the Assessment Year 2006-07 was completed u/s 143(3) of the Income-tax Act, 1961 and deduction u/s 10B was allowed. The assessee is engaged in the manufacturing of special purpose plants. This contention of the assessee was supported by invoice of raw material, freight and courier charges for receiving the raw material and explaining the manufacturing process. The process flow chart was filed before Assessing Officer where in the nature of the business and manufacturing activities are described. The chart is as below :- Further the flow chart was explained as under :- S.No. Description of Component Manufacturing Process performed by the Appellant 1. AC Frequency Drive The AC Frequency drive was purchased as per Assessee's design specifications & integrated with a squirrel cage motor by programming its Programmed Logic Controller (PLC) to requ....
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....they prevent wear of the mill shell. The large sections are then disassembled into subassemblies, packed and containerized for shipment. For details please refer to the Appendix 3. 5. Cyclone The equipment mentioned in the Column "A" of this table was purchased by assessee as per its technical specifications and drawings and after inspection it was assembled with a Hammer Mill using support and frame; it works to reduce pollution by trapping dust generated by the Hammer Mill. After testing it is disassembled from the Hammer Mill and dispatched as Cyclone Separator with support and embedded frame. For details please refer to the Appendix 4 6. (a) Bucket Elevator Parts (b) Chain for the Bucket Elevator The equipment mentioned in the Column "A" of this table were purchased by assessee as per its technical specifications and drawings and after inspection they ware assembled together to make a bucket elevator, the elevator was tested for conformance with the design parameters and thereafter disassembled to shippable size for shipment. For details please refer to Appendix 5 ....
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....site. For details please refer to the Appendix 9. The equipment mentioned in the Column "A" of this table were purchased by assessee as per its technical specifications and drawings and after inspection they was assembled together to make a Down Shop Lead for the Electrically Operated Travelling Crane (EOT). After testing for current carrying capacity and other factors they were disassembled and properly packed as there are number of small components which may get misplaced during transit. It is then installed on the EOT at the Plant site. For details please refer to the Appendix 9. Thus, facts show that the plants are supplied in the form of sub-assemblies and components manufactured or after getting manufactured as per the prescribed specifications. These sub-assemblies and components were manufactured outside transported to the NSEZ, Noida and thereafter, certain operations are carried out and disassembling was done prior to export the subassemblies and components to the ultimate destination. This process is also required for containerization and packing of these items on account of size which is necessary for transportation and installation. In the case of CIT v....
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....C of the Act. The Assessing Officer allowed the claim but the commissioner, exercising jurisdiction under section 263 of the Act, set aside the order directing the Assessing Officer to disallow the claim of the assessee on the ground that assembling components and turning them into television sets/computers/DVD did not amount to manufacture as no new article different from the raw material came into being. The Tribunal upheld the view that producing television sets by purchasing items like cabinets, chasis, integrated circuit picture tubes, could be held to be manufacturing. On appeal Held, dismissing the appeal, that the view of the Tribunal was correct." In the case of CIT vs. Chiranjjeevi Wind Energy Ltd., cited supra, the Hon'ble Madras High Court has held as under :- "The different parts procured by the assessee by themselves cannot be treated as a windmill. Those different parts bear distinctive names and when assembled together, thereafter it gets transformed into an ultimate product which is commercially known as a "windmill". There can, therefore, be no difficulty in holding that such an activity carried on by the assessee would amount to "manufacture" a....
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....- "The manufacturing processes of cross flow and counter flow types of cooling towers are wet type of cooling towards manufactured in technical collaboration with GEA. The import of know-how and the establishment of the new unit was technically for the production of the XE series and CM series of cooling towers which as claimed by the assessee company are being manufactured in technical collaboration with GEA, whereas the round bottle cooling towers are being manufactured independent of the collaboration with GEA thereby using its old plant and machinery and moulds shifted from Odhav unit. The manufacturing process of components for round bottle cooling towers and counter flow/cross flow cooling towers are distinct and independent as the items manufactured by each type go to assemble different types of cooling towers. Same is corroborated by the fact that the assessee has entered into a collaboration agreement with GEA for the manufacture of cross flow and counter flow types of cooling towers. The technical know-how has been obtained for the purpose of manufacture of components of cross flow and counter flow types of cooling towers for the purpose of which GEA stand....