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TMI Blog2010 (11) TMI 976X X X X Extracts X X X X X X X X Extracts X X X X ..... -09-2010, the assessee filed an application for modification of the existing grounds and admission of additional grounds. The grounds now raised are as under: 1 "On appreciation of the facts and circumstances of the case and in law, the Learned Commissioner of Income Tax (Appeals) has erred in confirming the action of the Learned AO in not granting deduction u/s 80IB of the Income-tax Act 1961 to the appellant on the basis of the facts of the case as is evident from record. The action of the Learned Commissioner of Income Tax (Appeals) is contrary to the facts and law and deserves to be deleted. 2 On appreciation of the facts and circumstances of the case and in law, the Learned Commissioner of Income Tax (Appeals) has erred in ignoring the production of PVC / TPR insulated Wires and Cables with and without connectors / couplers, PVC Sleeves etc. having a value of ₹ 19,12,835 during the year at its industrial undertaking at Daman using the appellant's own machineries and power generated from Diesel Generator Set while upholding the action of the Learned AO denying of deduction u/s 80IB. 3 Alternatively and without prejudice to each other the Learned Commissioner of In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k from M/s. Nangalwala Chemical Industries at Alwar for copper drawing and making of rubber cables. To a query by the AO, the assessee submitted in para 3 of their letter dated 26-12-2006 that- "Initially our client do not have the facility for manufacturing of rubber cable but, it has best technical know how for manufacturing of rubber cable. It has taken the order and executed the same by way of manufacturing done by M/s. Nangalwala Chemical Industries of Alwar, under the direct supervision of one of the partner Mr. Naresh Agarwal. Mr. Naresh Agarwal is in this line since last 10 years. He is the main technical person of our client's unit. As the manufacturing process has been carried out by M/s. Nangalwala Chemical Industries, under the direct supervision and control and with the aid of technical know how of our client, our client is the manufacturer." 3.2 After considering the reply of the assessee, the AO concluded that the undertaking of the assessee was not doing any manufacturing activity and was getting job work done from M/s. Nangalwala Chemical Industries, a sister concern, the assessee having admittedly taken the order and executed the same by way of manufa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted its arguments by cogent facts that manufacturing is carried out under the supervision of its partner using his know how. I am constrained to agree with the assessing officer that M/s. Nangalwala Chemical Industries is doing manufacturing activity for the appellant and the appellant has not carried out any manufacturing activity. Thus I agree with the assessing officer that the appellant can not be said to have manufactured any article or thing within the meaning of the provisions of Section 80IB of the Income Tax Act. 12. Now I would like to delve into each of the grounds of appeal raised by the appellant; 13. Ground no. 1 is regarding the eligibility of the appellant for deduction U/s. 80IB of the Act. As discussed in paragraph 11 supra the appellant itself has admitted that no manufacturing or production activities has been carried out by it which is a mandatory condition for availing deduction U/s. 80IB of the Act. This ground of appeal is dismissed. 14.1 In ground no. 2 the appellant contend that the Assessing Officer erred in law and on facts in rejecting the claim of the appellant is manufacturer as the manufacturing has been carried out under its direct supervis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion at Alwar, which is 500kms away. Inviting our attention to page 29 of the paper book, the ld. DR pointed out that the assessee did not furnish copy of invoices for transportation of raw material purchased or transport of goods produced through job work or even for sale of goods.. He added that entire sale was shown in debtors and no amount was recovered. In the light of these facts, the ld. DR contended that the assessee is not entitled to any deduction. In his rejoinder the ld. AR submitted that issues now raised by the ld. DR do not emerge from the order of the AO. If plant and machinery was not installed, how the AO allowed depreciation. Since the AO himself accepted direct supervision of job work by the partner, there is no reason for denying deduction, the ld. AR added. 6. We have heard both the parties and gone through the facts of the case. A mere glance at the impugned order reveals that the ld. CIT(A) upheld the findings of the AO since the assessee did not furnish any details of diesel purchased for running generator or any other evidence that a portion of goods were manufactured in the assessee's own facility nor any evidence that goods manufactured in the facility ..... X X X X Extracts X X X X X X X X Extracts X X X X
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