2008 (12) TMI 746

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....rcumstances of the case and in law, the ITAT was correct in holding that business carried out by the assessee amounted to manufacturing of article or things for the purposes of deduction under section 80-IA of the Income-tax Act, 1961?" 2. The assessee has a factory in backward area where the assessee produces Automobile Filter elements for M/s. Puralator India Limited, which are further used for manufacture of Automobile Filters. The assessee claimed deduction under section 80-IA of the Act, which was disallowed by the assessing authority on the ground that the process carried out by the assessee did not yield commercially any new or different commodity and thus, the assessee could not be held to be engaged in production or manufacture. T....

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....ap with the help of PVC dispenser machine. uPlace cap on one end of sub-assembly and passes it through jeller having a constant temperature for curing of adhesive. uFill another cap with adhesive with the help of dispenser, place on the other end and passes if through FCO at specified temperature of curing of PVC adhesive and paper. uFind Product-Semi-finished Automotive filter. 9. The finished product of the assessee i.e., Automobile Filter element is a semi-finished automotive filter, which is supplied to the original equipment manufacturer in Automotive Filter industry i.e., M/s. Purolator India Limited. 10. Having noted the process which is involved, we have to examine whether the activity carried out by the assessee amounts t....

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....o the automobile manufacturer. The assessee brings together various raw materials and after carrying out process, assembles the same leading to the equipment being produced. It is well settled that every change or process cannot be termed as manufacture or production. Well known tests applied for determining whether a process amounted to manufacture or production are that a new and distinct commercial product is produced. In each case, it may be a question of fact whether a particular process involves manufacture or not. The question may be of degree and extent of change and though, the issue may at times be debatable, by applying the relevant tests, the Tribunal has recorded a finding and such finding cannot be held to be perverse, it cann....