2014 (4) TMI 625

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....Assessing Officer to allow the assessee claim for deduction u/s.801B of the IT. Act, even though the assessee did not employ 20 or more workers in the process carried on by the assessee without the aid of power. 2. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in directing the Assessing Officer to allow the assessee's claim for deduction u/s.801B of the IT. Act, without appreciating that the process carried out by the assessee did not amount to manufacturing as stipulated in provision of Sec.801B(2)(iii) of the IT. Act. 3. On the facts and in the circumstances of the case and in law the Ld.CIT(A) has erred in allowing the assessee claim for deduction u/s.801B of the I.T. Act on the basis of appellate or....

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....there before the Ahmedabad Bench wherein the Tribunal has held as under: "The expression 'manufacture' involves the concept of changes effected to a basic raw material, resulting in the emergence or transformation into a new commercial commodity. By process of manufacture, something is produced and brought into the existence which is different from that, out of which it is made in the sense that the produce is by itself a commercial commodity capable of being sold or supplied. The material, from which the thing or product is manufactured, may necessarily lose its identity or may be transformed into basic or essential product. Manufacture is a transformation of an article which is commercially different from one which is converted. The mome....

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....in the trapezodical shape by employing hydraulically operating guillotine machines. After guillotine operation, the piercing operation takes place in which the holes are punched. During these processes of slitting, cutting and piecing of lamination, the cut edges get some burrs. These burrs are removed by passing the lamination through during operation. The presence of burrs impairs, increases the loss. During the course of these processes, the mechanical stresses are developed inside the lamination. It is tested to find out as to how much stress has developed and how much losses will be increased. It is to be done so as to find out as to whether with these stresses, the transformer core will give desired result as per technical specificati....

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....ssee for making the transformer core were manufacturing activity. Nothing was brought to notice to take a different view in that regard. Some of the assessees, while manufacturing transformer core, did not carry annealing process. Still core made by them was used in the transformers. Annealing process is not essential process for manufacture of transformer core. Only where the assessee finds that there is decrease in inherent characteristics of the product, which is required to be corrected, this process is adopted. Otherwise even without annealing process, transformer cores have all the qualities, which are essential to use it in the transformer for controlling supply of electricity. Therefore, this is not essential process of manufacturin....