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TMI Blog2007 (3) TMI 410X X X X Extracts X X X X X X X X Extracts X X X X ..... ows. The assessee is an individual who is carrying on business in two units. In Unit-I the assessee derives income from undertaking job work for others. In this unit the assessee undertakes manufacture of motorcycle wheels for M/s. Bajaj Auto Ltd. In Unit-II the assessee undertakes activity of Press shop, sheet metal welding. The assessee initially filed return of income on 31-10-2001 declaring an income of Rs. 8,81,363. No deduction under section 80-IB was claimed originally. In the revised return of income filed on 23-7-2002, the assessee claimed deduction under section 80-IB of Rs. 2,16,977 in relation to profits of Unit-I. In Unit-II the assessee had suffered a loss, whereas in Unit-I it had profits. The Assessing Officer rejected the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntity on a job work basis cannot disentitle the assessee from the claim of deduction under section 80-IB of the Act. The learned counsel relied upon the following decisions in support of his submissions : ( i ) CIT v. Jamal Photo Industries (I) (P.) Ltd. [2006] 203 CTR (Mad.) 256. ( ii ) IAC v. Varistha Udyog Ltd. [1990] 34 ITD (Delhi) 10. ( iii ) CIT v. J.B. Kharwar Sons [1987] 163 ITR 394 (Guj.). 5. Regarding non-claiming of deduction in the past, it was submitted that the same by itself cannot be a justifiable ground to reject the claim of the assessee. According to him, the assessee fulfils all the conditions prescribed under section 80-IB of the Act and, therefore, the claim of the assessee should succeed. 6. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the paper book on record : "1. Drum Assembly - In this process the Collar Bearings are Pressed in the Drum with the help of Pneumatic Press. 2. Drum spoke Assembly - 18 No. each of outer inner spokes are assembled with the Drum on Assembly stands. 3. Rim Drum Assembly - In this process the drums assembled as per process No. 2 is assembled with the Rim by tightening Nipples with Spokes and Rim with the help of Pneumatic Gun. 4. Tightening Operation - The Rim Drum assembled as per operation No. 3 are put on the tightening machine for tightening the Nipples with Spokes with the help of Pneumatic Guns. 5. Balancing Operation - The Rim Drum assembly after tightening operation as per Process No. 4 is put on Ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which gives rise to an article which is totally different from the parts, amounts to manufacture or not ? This proposition has been directly answered by the Hon ble Bombay High Court in the case of CIT v. Tata Locomotive Engg. Co. Ltd. [1968] 68 ITR 325 . The following extract of the head note of the judgment is worthy of notice : "The word "manufacture" has a wider and also a narrower connotation. In the wider sense it simply means to make, or fabricate or bring into existence an article or a product either by physical labour or by power, and the word "manufacturer" in ordinary parlance would mean a person who makes fabricates or brings into existence a product or an article by physical labour of power. The other shade of meaning ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing of a final product. The parts or components utilized by the assessee in its assembling process undergo a transformation and result into a product namely motorcycle wheel, which is distinct and separate commodity in character, name and use than each of the parts or components. Therefore, on the basis of the principles referred to above, in the instant case, it is safe to deduce that the process of assembling carried out by the assessee is to be understood as amounting to manufacture or production of an article. Therefore, the profits derived from such activity is eligible for the claim of benefit under section 80-IA of the Act. 12. The other objection of the revenue is that the assessee does not manufacture on its own account but d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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