2004 (8) TMI 720

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....RDER Per A.D. Jain, Judicial Member. - Department has raised the following grounds: " 1. On the facts and in the circumstances of the case and in-law, the learned CIT(A) erred in directing the Assessing Officer to allow the deduction under section 80-IA on the service charges by holding that the same forms part and parcel of manufacturing activity ignoring the reasons given by the Assessi....

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....manufactured by the assessee. The Assessing Officer held that this service charges related to preparing project evolution report, technical feasibility and planning etc., which were not coming in the manufacturing activity. These service charges were further held not subjected to excise duty and sales tax, which indirectly proved that they were not part of manufacturing activity. These charges, we....

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....ients, for which, it charged service and maintenance charges.Therefore, there was a direct nexus between the receipts fromrendering services and maintenance facility to its clients and lease rent and the main business activity of the assessee. Thus, the assessee was entitled to deduction under section 80-I in respect of that income. The learned DR object in that case, a direct nexus wasproved. It ....

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.... bifurcated, as being in the nature of lab our charges, they are not subjected to sales tax or excise duty. That being so, they are nothing but part of the sales. Hence, they cannot be segregated from the manufacturing activity. It has been noticed a sun-refuted fact that the service charges were received from only very few concerns to whom manufactured items were supplied, and not others to whom ....