2014 (1) TMI 1037

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....ned in mixing of rubber compound is eligible for deduction u/s. 80IB of the Act. 3. The facts relating to the issue are stated in brief. The assessee-company is engaged in manufacturing of pre-cured tread rubber and rubber compound. The assessee also earns job work charges on the job work undertaken by it for converting raw materials belonging to other parties into rubber compound. The assessee has accounted the job work income under the head "Mixing charges". The assessee claimed deduction u/s. 80IB of the Act on job work income also. The Assessing officer took the view that the job work income earned by the assessee is not eligible for deduction u/s. 80IB of the Act on the reasoning that it is only one of the several processes and furt....

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....ing" in order to become eligible for deduction u/s 80IB of the Act. We notice that the assessee as well as the Ld CIT(A) has placed reliance on the decision of Hon'ble jurisdictional High Court in the assessee's own case (referred supra). For the sake of convenience, we extract below the relevant observations made by the Hon'ble Kerala High Court in the assessee's own case referred supra. "1..... However, the Division Bench prima facie doubted whether processing of goods done for another party by the assessee could be treated as manufacture or production of any article or thing for the purpose of deduction under section 80IB of the Act. Accordingly, for a detailed consideration of correctness of said decision, the matter was referred to ....

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....uction of any article or thing", occurring in section 32A, 80IB, etc. In the Sesa Goa Ltd.'s case (supra), the Supreme Court held that processing of iron ore amounts to manufacture or production of any article or thing. In N.C. Budharaja & Co.'s case (supra), the Supreme Court held as follows: "The word "production" or "produce" when used in juxtaposition with the word manufacture" takes in bringing into existence new goods by a process which may or may not amount to manufacture, it also taken in all the by-products, intermediate products and residual products which emerge in the course of manufacture of goods." What is made clear by the Supreme Court is that even production of intermediary products is sufficient to entitle the assess....