High Court · 2012

THE HON’BLE MR. JUSTICE U.B.SAHA A.K.Goel, CJ. This appeal has been preferred by the Revenue under section 260A of the 1. Income Tax Act, 1961 against the order dated 19.03.2010 passed by the Income Tax Appellate Tribunal, Guwahati Bench, in ITA No.214 (Gau)/2007 for the assessment year 2004-05 claiming following substantial questions of law: Whether on the facts and in the circumstances of the case, the Tribunal (cid:28)1) was justified and correct in law in setting aside the order of the Commissioner passed u/s 263 of the Income Tax Act, 1961 ? 2) Whether on the facts and in the circumstances of the case, the responden t assessee can be said to be engaged in any production of manufacturing activity within the meaning of section 80 IC of the Income Tax Act, 1961? 3) t assessee is entitled to deduction u/s 80 IC of the Income Tax Act, 1961? (cid:29) Whether on the facts and in the circumstances of the case, the responden The assessee firm M/s. I. Tech Electronics located at EPIP, Amingaon, Gu The assessee claimed reduction under section 80 IC in respect of income 2. derived from assembly of colour TV which was claimed to be ’manufacturing activi ty’ falling under Section 80 IC(3) of the Act. The Assessing Officer allowed the said claim but the Commissioner, exercising jurisdiction under Section 263 of t he Act, set aside the said order and directing the Assessing Officer to disallow the claim of the assessee. It was held that assembling component and turning th em into T.V./computer/DVD did not amount to manufacture as no new article differ ent from the raw material came into being. Aggrieved thereby, the assessee carri ed the matter to the Tribunal by submitting that jurisdiction under section 263 of the Act could not be exercised on an issue on which two views are possible an d also by submitting that assembling of colour TV from different components and parts amounted to manufacture. Reliance was placed on decision of the Tribunal i n another identical case in Rajib Ranjan Pujari vs. I.T.O., Ward-2, Jorhat, I.T. A. 189(Gau) 2008. Reference was also made to the reasons given by the Assessing Officer as follows : (cid:28)6. wahati started assembling of Colour T.V. with effect from 23.10.03. Being an SSI unit, it obtained DIC Registration Certificate on 01.08.03. The assessee claime d 100% deduction of its profits and gains derived from the industrial unit under section 80IC of the I.T. Act for the assessment year 2004-05 being the initial assessment year. The assessee was asked vide this office letter dated 28.08.06 t o justify the claim of deduction. In response, the assessee’s A/R submitted that M/s. I. Tech Electronics begins its manufacturing activity with effect from 23. 10.2003 i.e. during the period beginning on the 24th day of December, 1997 and e nding before the 1st day of April, 2007 in an Industrial Area at village Numalij olah under Silasundarighopa mouza of North Guwahati circle in the District of Ka mrup, Assam. The location of the manufacturing unit falls under Khasra No.275 & 306 as notified vide notification No.32/99 dated 08.07.1999 of Central Excise. T he A/R further submitted that M/s I. Tech Electronics was covered under section 80-IC(2)(iii) of the I.T. Act and the amount of deduction in this case was accor dingly 100% of profits and gains derived by the unit for ten assessment years co mmencing with the initial assessment year 2004-05. I have gone through the submi ssion of the assessee’s A/R very carefully and also seen that the industrial uni t of the assessee is situated at Export Promotion Industrial Part (EPIP), Aminga on - Village Nualijolah, Mouza Silasundarighopa, District Kamrup, Assam, as noti fied by the Board in its notification No.116 dated 26.03.2004. Spot enquiry has also been made by the Inspector of Income Tax attached to this office to verify the existence/genuineness of the Industrial unit. His report is placed on record s. As the assembling of Colour T.V. from various component parts is a process of manufacture or production, I am of the opinion that the assessee firm is engage d in manufacturing activity and entitled to deduction as specified in sub-sectio n (3) of the section 80-IC of the I.T. Act. (cid:29)

3. The Tribunal upheld the plea of the assessee following its earlier order in Rajb Ranjan Pujari and also holding that exercise of revisional jurisdiction by the Commissioner was not called for.

4. We have heard learned counsel for the parties.

5. Learned counsel for the Revenue submits that the assessee was merely pur chasing different components from SALORA International Limited and after assembl ing the T.V./DVD, the same were sold back to the same party. Same was the positi on with regard to Kitchen Appliances India Limited from whom the assessee was pu rchasing different components and selling assembled products. These activities d id not amount to ’manufacturing’. Notice was issued and the assessee is represented by learned counsel, wh 6. o supports the view taken by the Tribunal. He also relies upon judgments of Punj ab and Haryana High Court in Commissioner of Income Tax vs. Shri Mahesh Chandra Sharma, (2009) 308 ITR 222 (P & H) and of Delhi High Court in Commissioner of In come Tax vs. Jackson Engineers Ltd., (2010) 36 DTR 168 holding that when a new a nd different article emerges having distinctive name, character and use, the pro cess could be held to be manufacturing. In Mahesh Chandra Sharma (supra), relian ce was placed, inter alia, on judgments of the Hon’ble Supreme Court in Gramopho ne Co. (India) Limited v. Collector of Customs, 1999 (114) ELT 770 SC) and Union of India v. Delhi Cloth and General Mills Co. Limited, 1973 ECR 56 (SC).

7. The Tribunal has upheld the view that producing of T.V. sets by purchasi ng items like cabinet, chasis, IC picture tube could be held to be manufacturing . It has not been shown that the view of the Tribunal in the case of Rajib Ranja n Pujari has been challenged by the Revenue. Moreover, the view taken by the Pun jab and Haryana High Court and Delhi High Court also supports the case of the as sessee. No contrary view has been shown.

8. us. No substantial question of law arises. In view of above, the order of the Tribunal cannot be held to be erroneo