TaxTMI 
TaxTMI 
TaxTMI 
2016 (3) TMI 918
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.... Act, 1961 (hereinafter referred to as 'the Act') vide his order dated 24.12.2011 for assessment year 2009-10. First we take up Revenue's appeal. 2. Revenue has raised following grounds:- "1. Whether on the facts and the circumstances of the case the Ld. CIT(A)-I, Kolkata has erred in deleting the disallowance u/s. 80 IB to the extent of Rs. 11,02,777/- although the assessee had no infrastructures to support it's manufacturing activity in respect of it's unit at Dadar, Silvassa? 2. Whether on the facts and the circumstances of the case the Ld. CIT(A)-I, Kolkata has erred in deleting the disallowance u/s. 10B to the extent of Rs. 61,23,963/- although the assessee had no infrastructures to support it's manufacturing activity in respec....
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....aking the generator sets can be sold in the open market. Therefore, the activity of assembling the different components for making the generator sets does not amount to manufacture. Besides, the above, AO also observed that the excise registration is not a deciding document to ensure whether there is a manufacturing activity or not. 4. Aggrieved, assessee preferred an appeal before Ld. CIT(A) and submitted that the activity of making generator sets has been accepted as manufacturing unit at SEZ in earlier year and subsequent year also relevant to the year under consideration. Ld. CIT(A) after considering the submission made by assessee deleted the disallowance made by AO by observing as under:- "Similarly, assessee claimed deduction u/s.....
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.... and function. However this entire process of assembling requires lot of technical and engineering expertise. Therefore, we hold that this activity of assembling amounts to a manufacturing activity. We also find that the issue is covered by the decision of Hon'ble Delhi High Court in the case of CIT v. Jackson Engineers Ltd. in ITA No. 251 of 2008 dated 23.12.2009, where the Hon'ble Delhi High Court exactly on similar activity has regarded as manufacturing activity and in the present case also assessee was manufacturing the diesel generating sets where assesseecompany assembles diesel generating sets. Several components go in relation to the making of diesel generating sets and some of the major components are engine, alternator, en....
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....he assessee, the Court explained the expression "manufacture" as under:- '13. The word "manufacture" has not been defined in the Act. In the absence of a definition of the words "manufacture" it has to be given a meaning as is understood in common parlance. It is to be understood as meaning the production of articles for use from raw or prepared materials by giving such materials new forms, qualities or combinations whether by hand labour or machines. If the change made in the article results in a new and different article then it would amount to a manufacturing activity. 14. This Court while determining as to what would amount to a manufacturing activity, held in CST v. Pio Food Packets, 1980 Supp. SCC 174 that the test for determina....
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....rinciple on the facts of the present case, the irrefutable conclusion would be that the respondent company is indulging in manufacturing activity. We, thus, answer the question formulated in favour of the assessee and uphold the view of the Tribunal on this aspect." From the above decision of Hon'ble Delhi High Court, in our opinion, that in the present case, assembling of different products which are giving rise to a new product and which has become a new name in the market and function will be regarded as "manufacturing activity". Relying on the above case (supra) and totality of the facts of the case, we do not find any reason to interfere in the order passed by Ld. CIT(A). Hence this ground of Revenue's appeal is dismissed. 6. Co....