TaxTMI 
TaxTMI 
2015 (2) TMI 625
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.... It was claimed that electronic and electrical components are received in the form of cards with suitable connectors and all the required cards are connected using connectors. For the manufacturing process tools and equipments were purchased and used. The air purifier manufactured by the assessee are health care products. During the previous year 1.4.2005 to 31.3.2006 relevant to the assessment year 2006-07 the assessee set up a new industrial undertaking / manufacturing unit in Salempur Rajputan, Roorkee, Distrr. Haridwar, Uttranchal and began to manufacture / produce air purification system, not been any article or thing specified in the schedule to the I.T. Act 1961. During this year the assessee declared profit earned at Rs. 4290162/- from its Roorkee Division (manufacturing) and claimed deduction u/s 80IC of the Act 1961 at 100% of such profit i.e. Rs. 4290162/-. The total income in its return declared was Rs. 26,25,230/- after claiming the above deduction u/s 80IC of the Act. The AO disallowed the entire claim of deduction u/s 80IC of Rs. 42,90,162/- stating that no manufacturing expenses have been incurred or machineries available while simultaneously allowing all expenses a....
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....the contents of page Nos. 114 and 175 of the paper book which are copies of cash vouchers and bill of purchasing of wire to support her submission that no manufacturing activities were there at the unit of the assessee. The Ld. Sr. DR submitted further that almost similar are the facts in the remaining assessment years involved. 6. Ld. AR on the other hand tried to justify the first appellate order on the issue. He submitted that the AO has not denied this material fact that the assessee has involved in assembling different components to make the product 'air purifier'. He submitted that the photographs and other documents mentioned in the paper book were filed before the AO to support the claim of the assessee that it was involved in manufacturing. To support his arguments that assessee is very well involved in manufacturing of the claimed products, he referred contents of para No. 3 page 2 of the assessment order and page 57 of the paper book filed for the assessment year 2008-09. He also referred page Nos. 57, 58 of the paper book filed for the assessment year 2006-07 to narrate the actual function involved by the assessee in manufacturing. He also referred page Nos. 59, 78, ....
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....the final product is ready. The appellant in this regard also furnished a flow chart depicting various processes and submitted compilation of photographs depicting the various processes involved. The appellant has also relied upon various decisions of the Supreme Corut and other High Cosurts to contend that the test to determine whether processes amounts to manufacture is whether after putting the raw material through such processes, whether a new and distinct product is generated or not. If the answer to the aforesaid is in affirmative, then said processes, it was submitted, would amount of manufacture/production. The appellant specifically referred to the decision of the Supreme Court in Union of India vs. Delhi Cloth * General Mills : AIR 1963 (SC) 781 and Dy. CST vs. PIO Food Packers : 46 STC 63. Based on the aforesaid, it was the submission of the appellant that the process of manufacturing of an air purifier amounted to manufacture/production for the purpose of section 80IC of the IT Act. The appellant has also relied upon the recent decision of the Supreme Court in the case of ITO vs. Arihant Tiles & Marbles (P) Ltd. in Civil Appeal No. 8036 of 2009, arising out of S.L.P.....
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....areas of a hospital of a continuous 24 x 7 basis. Manufacturing of Steri-Air is an assembly process, where various parts/components of the system are procured from different vendors and assemble the same at factory. In the aforesaid facts, the inputs, gets converted into an altogether different commercial existence and utility. The observations of the AO that there is only assembling of various products are not supported by any documentary evidence whereas the appellant has been able to successfully demonstrate that various processes are undertaken in the manufacture /production of the air-purifier. Even otherwise, the decisions of the Punjab and Haryana High Court in the case of Anand Affiliates & Mahesh Chand Sharma and the decision of the Madras High Court in the case of Tata Locomotive clearly lays down that even assembling of various parts amounts to manufacture for the purposes of sections 80IB/80IC of the I.T. Act if such processes results in formation of a commercially new and distinct product from the inputs used in its manufacture/production. In the present case, it is noticed that the base, motors, filter, U.V. Light etc. which are used as inputs in the manufact....