TaxTMI 
TaxTMI 
2015 (12) TMI 1704
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....O u/s 80IB of the Act. 2. Whether the CIT(A), Jammu was right in law in deleting the addition made by the AO u/s 80IB of the Act, as the conversion of 24K gold into 22K gold doesn't amount the manufacture and as is not entitled to deduction u/s 80IB of the Act. 3. Whether the CIT(A), Jammu was right in law in deleting the addition made by the AO u/s 80IB of the Act., in view of the judgment in the case of Delhi Cloth and General Mills Co. Ltd. Wherein it has been quoted that manufacture implies change but every change is not manufacture and yet every change of an article is the result of treatment labour and manipulation. 4. Whether the CIT(A), Jammu was right in law in deleting the addition made by the AO u/s 80I....
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....o placed reliance on various judicial pronouncements. The AO, after considering the submissions of the assessee and judicial pronouncements, held that conversion of 24 Kt Gold into 22 Kt Gold does not amount to manufacture and, as such, the assessee is not entitled to deduction u/s 80IB of the Act. Accordingly, the AO disallowed the deduction u/s 80IB of the Act, claimed by the assessee and an amount of Rs. 1,08,53,115/- was subjected to tax. The ld. CIT(A) deleted the disallowance. 3. The ld. DR placed reliance on the order of the Assessing Officer and contended that the conversion of 24Kt Gold into 22 Kt gold did not amount the manufacture and was not entitled to deduction u/s 80-IB of the Act. 4. The ld. counsel for the assessee, o....
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....eld that conversion of gold into ornaments amounted to 'manufacture'. In the case of M/s. Lovelesh Jain and others 204 Taxman 134 the issue was elaborately discussed by the Hon'ble Delhi High Court as under: "The activity for converting gold bricks, biscuits or bars, into jewellery amounts to "production or manufacture of a new article. The gold, silver or platinum in bar, biscuits or brick form, is converted by manual labour and by the use of implements/tools or by machinery, culminating into an entirely new article/thing called jewellery or ornaments. Jewellery is a wearable item and is used by both men and women. This process has been referred to above in paragraph 6.4, while adverting to the factual matrix in the case of Shashi....
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....rther, the definition of 'manufacure' is inserted w.e.f. 01.04.2009 in section 2(24BA) of I.T.Act as under: "Manufacture" with its grammatical variations means a change in non-living physical object or article or thing:- a) Resulting in transformation of the object or article or thing into a new and distinct object or article or thing having a different name, character and use, or b) Bringing into existence of a new and distinct object or article or thing with different chemical composition or integral structure. 4.4. The conditions are alternate to each other and on satisfying any one of the two the activity would be treated as 'manufacture' . In the present case 2(29BA)(a) of I.T. Act is clearly satisfi....