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TMI Blog2009 (7) TMI 1261X X X X Extracts X X X X X X X X Extracts X X X X ..... 08. However on the hearing date, none was present and the case was adjourned to 17/7/08 at the request of the Ld. D R. On the appointed date of hearing, i.e., on 17/7/08, there was no compliance from the assessee company. Considering the facts and in view of the provisions of Rule 19(2) of the Appellate Tribunal Rules and in conformity with the finding in the case of CIT vs. Multi Plan India Pvt. Ltd reported in 38 ITD 320, the appeal was dismissed on 25/7/08. 3.1. On 2/2/2009, the assessee company came up with a Misc. Petition [M.P.No.5/B/09 dated 2/2/2009 accompanied by an affidavit furnished by its A.R. with a prayer to recall the Tribunal's order dated 25/7/08 and restore the main petition for the reasons set out in the affidavit. 3.2. After hearing both the parties and the perusal of the submissions made by the Ld. A R., the Hon'ble Tribunal, had, in its order dated 20/3/2009, recalled its earlier order dt.25/7/08-dismissing the appeal - and directed the Registry to post the case for fresh hearing. Accordingly, this appeal is taken for adjudication. 4. The facts of the case, in brief, are that the assessee company engaged in the business of buying, selling, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, is associated with installation, commissioning and servicing of the equipments; (iii) that the system integration, of communication-equipments, is essentially a process of installation and, therefore, is not in the nature of such assembling-activity which, in turn can be considered to treat it as a manufacture. 5.1. With regard to the reliance on various judicial pronouncements, he was of the view that they are distinguishable from the assessee company's case. In conclusion, he had observed that in the light of the foregoing finding of the facts, of the case on hand, it becomes more than evident that the appellant's business activity is of trading/distribution, installation, commissioning and servicing of communication-equipments, in India which does not amount to assembling-activity, so as to consider the same for treating as a manufacture for qualifying profits derived therefrom for deduction u/s 80-IB... ... ... ... 6. Agitated over the stand taken by the Ld. CIT(A), the assessee company has come up with the present appeal. The Ld. A R had forcefully argued that section 80-IB provides for deduction in respect of profits and gains from certain industria ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 'manufacture' and 'produce' have not been defined in the Act, but, the judiciary has defined and interpreted in various decisions. (viii) Reliance was placed on the following case laws: (a) Empire Industries Ltd. vs. Union of India-AIR (1986) SC 662; (b) CIT vs J B Khawar and Sons 163 ITR 394 (Guj); (c) M/s Sonebhadra Fuel vs Commissioner of Trade Tax - AIR 2006 SCW 3884; (d) CIT vs Tata Locomotives and Engg Co Ltd 68 ITR 325 (Bom); (e) Ship Scrap Traders vs CIT 251 ITR 806 (Bom); (f) Aspinwall and Co. Ltd vs CIT 251 ITR 322 (SC); (g) CIT vs. Gogte Minerals (2) (1997) 225 ITR 60; (h) CIT vs. Oswal Data Processors (1997) 223 ITR 735 (Kar). 6.1. It was prayed that since various judicial pronouncements are in favour of the assessee company for deduction u/s 80IB of the Act which may be ordered to be allowed. During the course of hearing, the equipment itself was brought before this Bench and with the permission of the Bench, a demonstration was conducted to exhibit the assessee company's claim that it indulges in manufacturing activity. 6.2. On the other hand, the Ld. D R was of the view that the lower ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us and do not fall under item No. 22 of the Eleventh Schedule. The assessee which was manufacturing wireless sets was entitled to investment allowance. (c) The Hon'ble Rajasthan High Court in the case of Arihant Tiles and Marbles P.Ltd. vs. ITO reported in (2007) 295 ITR 148 was pleased to observe that:- Under section 80-IB of the Income-tax Act, 1961, an industrial undertaking which manufactures or produces articles or things not being any article or thing specified in the list in the Eleventh Schedule would be entitled to special deduction under the provision. The expression production has a wider meaning than the word 'manufacture'. The word 'production' includes the activity of manufacturing by applying human endeavour on some existing raw material................ (d) The Hon'ble Authority for Advance Rulings reported in (2009) 309 ITR 344 (AIR) has ruled that:- That the mechanical process to be applied to raw castings would bring into existence commercially new goods called 'machined castings' which fit compatibly into a tractor. The raw castings passed through the inspection drill, tooling and milling processes on ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iance. However, they are distinguishable and are not directly applicable to the facts of the issue before us. 7.5. To top it all, this Bench was very much impressed and rather convinced after witnessing the demonstration of the equipment that the assessee company indulges in manufacturing activity. Ld. AR demonstrated before us how the various electrical and electronic components are integrated by an indigenousness designed circuit and assembled in a box, thereby bringing out into existence a new product, the utility and function being altogether different from the inputs. 7.6. In over all consideration of the facts and circumstances of the issue and the various judicial pronouncements discussed supra which are directly on the point, we are of the considered view that the assessee company is entitled for deduction u/s 80-IB of the Act. The AO is directed to allow deduction u/s 80-IB of the Act. 7.7. Before parting with, we record our sincere and warm appreciation to the Ld. AR, Mr. Atul Alur, for having brought the equipment itself and conducted demonstration before the Bench to prove its mettle that the assessee company involves in manufacturing activity. Kudos to the Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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