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TMI Blog2016 (6) TMI 594X X X X Extracts X X X X X X X X Extracts X X X X ..... 016 - Shri I. C. Sudhir And Shri O. P. Kant For the Assessee : Shri Ved Jain Ashish Chadha, Adv For the Department : Shri BK Singh, CIT ( DR ) ORDER Per I. C. Sudhir: Judicial Member The revisional order under section 263 of the Income-tax Act, 1961 passed on 25.3.2013 has been impugned by the assessee. 2. The original assessment was completed by the Assessing Officer under Section 143(3) vide its order dated 30th December, 2010 wherein he has allowed the deduction of ₹ 31,11,096/- claimed by the assessee under Section 80-IC of the Income Tax Act. 3. Thereafter the assessment record was examined by the learned CIT. The learned CIT was of the view that assessee did not manufacture any article or thing which is a precondition for claiming exemption under Section 80-IC of the Act. Accordingly, he issued a show cause notice. In response thereto the assessee submitted its reply and contended that it is eligible for claiming exemption under Section 80-IC of the Act. The learned CIT, however, was of the view that assessee is engaged only in printing and it cannot be called as manufacturing and processing. Accordingly, he held that the order passed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... grounds of appeal. 5. The learned AR submitted that in this case the assessment has been completed by the Assessing Officer under Section 143(3) of the Act. During the course of the assessment proceedings the assessee has submitted all the details and the explanation as was called for by the Assessing Officer. Attention was invited to the questionnaire dated 5thAugust, 2010 at PB Pg. 38 whereby the Assessing Officer has asked the assessee to explain the nature of the business activities carried on by it. 6. It was further submitted that vide letter dated 3rd December, 2010 at PB Pg. 51 the assessee has explained before the Assessing Officer the eligibility of its claim under Section 80-IC of the Income Tax Act. All the necessary details in support thereof were filed including the details of the plant and machinery totaling ₹ 87,24,753/- at PB Pg. 97 installed by it for carrying out the manufacturing process. 7. It was further submitted that the Assessing Officer has examined the manufacturing process carried on by the assessee and in this regard explanation was submitted vide letter dated 15th December, 2010 at PB Pg. 107. 8. It was the contention of the learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uring activities being carried on by it. 11. Further reliance was placed on the judgment of Chennai Bench of CEGAT in the case of Sri Kumar Agencies Others V. CCE 2000 taxmann.com 849 (CEGAT Chennai) whereby it has been held that products which emerged after printing on paper, polyethylene coated paper and on PVC films is to be treated as products coming out of manufacture. 12. Attention was also invited to the judgment of the Hon ble Supreme Court in the case of ITO, Udaipur vsArihant Tiles and Marbles Pvt. Ltd., Civil Appeal No. 8037 to 8044 of 2009 wherein it has been held that cutting of bigger pieces of marbles/tiles into smaller sizes will amount to manufacture. 13. It was also submitted by the learned AR that various judgments relied upon by the learned CIT are not on the issue and hence not relevant for the present case and learned CIT has wrongly applied these judgments in this case. 14. The learned CIT(DR) supported the order passed by the learned CIT. It was submitted that the learned CIT has examined the details and has passed a reasoned order. The assessee cannot be said to be engaged in the manufacture and hence not eligible for deduction claimed by it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Nos.2 3. We are unable to accept the contention that the printing does not alter the character of the paper used and there is no distinction between the raw paper and the resultant product. The purpose and usage of a blank paper is completely different from the use and purpose of a printed magazine or periodical. Once the blank paper undergoes a process of printing, the character of blank paper changes completely and the content of the printed material now becomes the identity of a printed paper. No one can say that blank paper and printed article are one and the same and in our opinion it can hardly be said that printing carried out in an industrial undertaking would not amount to manufacturing. A printed magazine or periodical even if it is not bound has a definite identity and its usage is completely different from a blank paper on which it is printed. 53. Having stated above we must add that the expression used in Section 80-I (2)(iii) of the Act is manufacture or produce any article or thing . The word 'produce' has wider meaning than the word manufacture . The meaning of the word 'produce' is similar to the word production and it has been held by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing is extremely wide. The question thus arises is whether the printed paper which is produced in Unit Nos.2 3 falls within the sweep of the expression 'article' or 'thing'. We are unable to think of any reason to exclude the printed paper produced by the assessee in Unit Nos.2 3 from the ambit of the expression 'article' or 'thing'. The language of Section 80-I (2)(iii) of the Act, thus clearly, indicates that Unit Nos.2 3 do manufacture or produce an article or thing . 57. The Supreme Court in the case of Commissioner of Income Tax v. SESA Goa Limited: (2004) 271 ITR 331 (SC) considered the question whether extraction and processing of iron ore amounted to manufacture or not in the context of availability of investment allowance under section 32(A) of the Act in respect of machinery used in the mining activity. In that case, revenue contended that processing of iron ore did not produce any new product and thus the benefit of Section 32(A) of the Act was not available to the assessee. As per section 32(A)(2)(b)(iii) of the Act, deduction on account of investment allowance is available to the assessee in respect of a plant owned by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Goa Limited (supra) have been followed by the Supreme Court in the later decision of India Cine Agencies v. Commissioner of Income Tax: (2009) 308 ITR 98. In this case the Supreme Court accepted that the meaning of the word production or produce was wide enough to include conversion of jumbo rolls of photographic films into small flats and rolls in the desired sizes and held that the benefits of section 80-I of the Act would be available in respect of an industrial undertaking engaged in such activity. 59. We, accordingly, reject the contention of the revenue that Unit Nos.2 3 fail to fulfill the conditions as specified in Section 80- I(2)(iii) of the Act. 18. The above judgment is squarely applicable to the facts of the present case. The condition for claiming exemption under Section 80-IC so far manufacturing or produce any article or thing is concerned is paramateria the same as under Section 80-I which was being examined by the Hon ble Delhi High Court. The Hon ble High Court has categorically held that the word produce has wider meaning than the word manufacture . Similarly the Hon ble High Court has held that the expression article or thing is also ext ..... X X X X Extracts X X X X X X X X Extracts X X X X
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