TaxTMI 
TaxTMI 
2015 (1) TMI 105
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....e of 40%. 2. The assessee company is a company engaged in business of manufacturing of Electronic Circuit Boards (ECB). On presentation of the return of income, the assessee was permitted to avail depreciation at the rate of 25% and the claim for allowing depreciation at higher rate i.e 40% was rejected by the assessing officer. An appeal was carried by the assessee company to CIT (Appeals) and on consideration of the contentions raised by the assessee the appeal came to be allowed. The appellate authority held that the product manufactured by the assessee i.e Electronic Circuit Board (ECB) is a semi-conductor device and as such, the assessee is entitled to depreciation at the rate of 40%. An appeal preferred by the Revenue to the ITAT cam....
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....nior Director, Department of Information Technology, Ministry of Communications and Information Technology, Government of India addressed to the assessee wherein it has been clarified that the activity undertaken by the assessee of mounting silicon chips on printed IC, ECB circuit boards is similar to manufacturing of IC i.e. ECB which are undoubtedly the semi conductor device. It is also observed by the Commissioner (Appeals) that special equipment is required in mounting of silicon chips on PCB which are the same as required in any IC manufacturing industry and as such, the chip bonding operation in ECB assembly is 1st part of the manufacturing process. 6. The question as to whether the activity amounts to manufacture is primarily a ques....
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....d support to the view taken by the CIT (Appeals) and the Appellate Tribunal, the respondent/assessee has placed reliance on the Judgment in the matter of "Commissioner of Income Tax-V, New Delhi Vs. Oracle Software India Limited", reported in (2010) 2 Supreme Court Cases 677. The assessee Oracle Corporation imports master media software from Oracle Corporation USA, which is duplicated on blank discs, packed and sold in market with relevant brochures. According to assessee, it uses machinery to convert blank CDs into recorded CDs, which along with other processes become a software kit. The making of a copy which constitutes manufacture or processing goods in terms of section 80-IA and consequentially the assessee is entitled to deduction und....
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.... of Section 80-IA of the Income Tax 1961. The Supreme Court referring to the earlier judgment in the matter of "Oracle Software" held in the affirmative. It was observed in the aforesaid judgment that POY is a semi-finished product. It is a raw material/input. The raw material or input gets converted into a texturized yarn by reason of the thermo mechanical process. POY is unfit for the manufacture of fabric. POY, as stated above, means partially oriented yarn whereas a cellulosic filament yarn is a final product in the sense after processing can be used directly for the manufacture of fabric. Thus, considering the ratio of the judgment cited above in the matter of "Oracle Software India Ltd.", we are of the considered view that the reasons....