TaxTMI 
TaxTMI 
2016 (7) TMI 395
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.... Act. 3. Brief facts of the case are that the assessee has filed its return of income on 20.9.2008 declaring total income at Rs. 2,00,211/-. The case of the assessee was selected for scrutiny assessment and notice under section 143(2) of the Act was issued and served upon the assessee. On scrutiny of the accounts, it revealed to the AO that the assessee has claimed deduction under section 80IC(2)(a) of the Act of Rs. 44,94,462/-. In support of its claim, the assessee has filed a report in Form no.10CCB. The assessee-company was manufacturing electric bike at the relevant time. The ld.AO has disallowed claim of the assessee on ground that the assessee-company was not manufacturing electric bike, rather, it was assembling parts procured fr....
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....ts with the Controller General of Patents, Design and Trademarks. It is registered as manufacturing unit with Commercial Tax Office and District Industries Center. It imports spare-parts of electronic bikes from china in completely knocked down (CKD) condition. It assembles the parts at its factory with the help of machinery. Products of the company, i.e. Electric bikes are falling under Chapter 87(entry No. 119091) of Central Excise Duty and Tariff. It enjoys exemption from excise duty by virtue of notification No.50/2003 CE dt. 10-6-2003. It was filing excise returns containing monthly information (regarding the value of production and amount of Excise duty exemption claimed) with the Central Excise Department. It procures the chasis from....
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.... (which in turn referred to various latest caselaws cited at 308 ITR 98(SC); 314 ITR 309(SC); 321 ITR 431(P&H), by observing that- "Applying the above test to the case on hand, the different parts procured by the respondent - assessee by themselves cannot, be treated as a Wind Mill. Those different paerts bear distinctive names and when assembled together, thereafter it gets transformed into an ultimate product which is commercially known as a "Wind Mill". There can, therefore, be no difficulty in holding that such an activity carried on by the respondent- assessee would amount to "manufacture" as well as "production: of a thing or article as set out in Section 80IB(2)(iii) of the Income-tax Act. In such circumstances, the conclusi....
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....nd the Hon'ble Court has explained both these expressions in detail. A reference to the decision of Hon'ble Supreme Court in the case of CIT vs. M/s. Arihant Tiles & Marbles Pvt. Ltd. reported in 320 ITR 79, India Cine Agency Vs. CIT reported in 308 ITR 98, CIT vs. Sesa Goa Ltd. reported in 271 ITR 331 and to the following decision of Hon'ble Gujarat High Court can be made : (a) CIT vs. Neokarna reported in 137 ITR 879 (Bombay) (b) CIT vs. Anglo French Drug Co. Ltd. reported in 191 ITR 92 (Bom.) (c) CIT vs. Prabhudass Kishore Dass Tobacco Products reported in 282 ITR 568 (Gujarat). 7. Let us bring at home the meaning of expression "manufacture and production" as propounded in the various authoritative p....
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...., yet every change of an article is the result of treatment, labour and manipulation. Naturally, manufacture is the end result of one or more processes through which the original commodities are made to pass. 10. The nature and extent of processing may vary from one class to another. There may be several stages of processing, a different kind of processing at each stage. With each process suffered, the original commodity experiences a change. Whenever a commodity undergoes a change as a result of some operation performed on it or in regard to it, such operation would amount to processing of the commodity. But it is only when the change or a series of changes takes the commodity to the point where commercially it can no longer be regarded....
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....ss cover the transformation. It is the transformation of a matter into something else and that something else is a question of degree, whether that something else is a different commercial commodity having its distinct character, use and name and commercially known as such from that point of view, is a question depending upon the facts and circumstances of the case. (See Empire Industries Ltd. v. Union of India [1985] 3 SCC 314). 12. Apart from the above, the assessee has relied upon the judgment of the Hon'ble Madras High Court as well as Hon'ble Punjab and Haryana High Court discussed by the ld.CIT(A) in the finding extracted supra. In the light of the above, if the activity of the assessee is being examined, then, it would reveal that....