TaxTMI 
TaxTMI 
2016 (6) TMI 594
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....he learned CIT, however, was of the view that assessee is engaged only in printing and it cannot be called as manufacturing and processing. Accordingly, he held that the order passed by the Assessing Officer is erroneous in so far as it was prejudicial to the interest of the Revenue. The assessment order passed by the Assessing Officer, accordingly, was directed to be framed afresh. 4. Aggrieved by the order of the learned CIT, the assessee is in appeal before us and has raised the following grounds of appeal:- "1. On the facts and circumstances of the case, the order passed by the learned Commissioner of Income Tax (CIT) under Section 263 of the Act is bad, both in the eye of law and on facts. 2. On the facts and circumstances of the case, the order passed by the learned CIT cancelling the assessment order passed by the A.O. is untenable in the absence of order of the A.O. being erroneous as well as prejudicial to the interest of the Revenue. 3. On the facts and circumstances of the case, the learned CIT has erred both on facts and in law in ignoring the fact that the issue raised by him in notice under Section 263 was before the A.O. and as such the ....
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....r has examined the manufacturing process carried on by the assessee and in this regard explanation was submitted vide letter dated 15th December, 2010 at PB Pg. 107. 8. It was the contention of the learned AR that the Assessing Officer has thoroughly examined this issue and thereafter only he has allowed the deduction after being satisfied about the eligibility of the assessee. It was further contended that the learned CIT was not justified in setting aside the order passed by the Assessing Officer and sitting over the judgment of the Assessing Officer. It was further submitted that in a proceeding under Section 263 the learned CIT has to give a categorical finding and he cannot set aside the order passed by the Assessing Officer where the Assessing Officer has passed the order after carrying out necessary enquiry. 9. On merit it was contended by the learned AR that assessee is engaged in the business of manufacturing aluminium foils by slitting, printing and air drying the same. It was submitted by the learned AR that assessee purchases rolls of aluminium foils which are of standard length and width. These rolls are cut into strips of required width. These strips are thereaf....
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....t was submitted that the learned CIT has examined the details and has passed a reasoned order. The assessee cannot be said to be engaged in the manufacture and hence not eligible for deduction claimed by it. 15. We have considered the above submissions and perused the order passed by the learned CIT as well as the paper book filed by the assessee. The issue in the appeal is whether the assessee can be said to be engaged in the manufacture or processing of a thing and hence eligible for claiming deduction under Section 80-IC of the Act. As per learned CIT the assessee is not engaged in the manufacture or producing a thing and hence it is not eligible for deduction. In this regard we have examined the process being followed by the assessee in carrying out its manufacturing activities. On going through the process we note that assessee is buying raw material in the form of aluminum foils which are in jumbo rolls. These rolls are being cut into strips of different seizes. Further these strips are converted into round shape. After such conversion these round strips are printed after loading on to the printing machine. The printed aluminium foils are thereafter run through air drying ....
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....ure or produce any article or thing". The word 'produce' has wider meaning than the word "manufacture". The meaning of the word 'produce' is similar to the word "production" and it has been held by the Supreme Court in the case of CIT v. N.C. Budharaja& Co.: (1993) 204 ITR 412 (SC) that while every manufacture can be characterized as production, every production need not amount to manufacture. The quoted passage from the said decision of the Supreme Court is as under: "The word 'production' has a wider connotation than the word 'manufacture'. While every manufacture can be characterized as production, every production need not amount to manufacture........ The word 'production' or 'produce' when used in juxtaposition with the word 'manufacture' takes in bringing into existence new goods by a process which may or may not amount to manufacture. It also takes in all the by-products, intermediate products and residual products which emerge in the course of manufacture of goods". 54. The expression used in Section 80-I(2)(iii) of the Act is much wider and, thus, would take in its sweep any article that may be manu....
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.... the benefit of Section 32(A) of the Act was not available to the assessee. As per section 32(A)(2)(b)(iii) of the Act, deduction on account of investment allowance is available to the assessee in respect of a plant owned by the assessee which is wholly used for the purpose of assessee's business in an industrial undertaking for the purposes of the business of "construction or manufacture or production of any article or thing". The Supreme Court noted that the meaning of the word production was defined only in the Oxford English Dictionary as "amongst other things that which is produced; a thing that results from any action, process or effort, a product; a product of human activity or effort" and this definition has been accepted by the Supreme Court in an earlier decision in the case of Chrestian Mica Industries Ltd. v. State of Bihar: [1961] 12 STC 150. The Court further held that the definition of the word 'production' was wide enough to include the production of mineral ores and ores would fall within the expression "a thing". Having held that the word "production" was much wider than manufacture, the Supreme Court felt that it was not necessary to examine the quest....