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TMI Blog2016 (7) TMI 395X X X X Extracts X X X X X X X X Extracts X X X X ..... s undergone changes. This flow chart has been reproduced by the ld.CIT(A) while taking cognizance of the assessee’s written submissions. As far as the objection of the AO that the very meager machinery was being used by the assessee is concerned, the case of the assessee is that it requires only tools and not big plant to assemble parts. Similar, section 80IC nowhere laid down condition for employment of specific number of employees. Therefore, that objection of the AO is only irrelevant - Decided in favour of assessee - ITA. No. 2513/Ahd/2011 - - - Dated:- 4-7-2016 - Shri Rajpal Yadav, Judicial Member For the Revenue : Shri Dinesh Singh, Sr.DR For the Assessee : Shri A.P. Sandesara ORDER Revenue is in appeal before the Tribunal against the order of the ld.CIT(A)- XX, Ahmedabad dated 8.7.2011 passed for the Asstt.Year 2008-09. 2. Though the Revenue has taken three grounds of appeal, but its grievance revolves around single issue whereby it has pleaded that ld.CIT(A) has erred in allowing deduction of ₹ 44,94,463/- under section 80IC of the Income Tax Act. 3. Brief facts of the case are that the assessee has filed its return of income on 20.9.2008 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ked down (CKD) condition. It assembles the parts at its factory with the help of machinery. Products of the company, i.e. Electric bikes are falling under Chapter 87(entry No. 119091) of Central Excise Duty and Tariff. It enjoys exemption from excise duty by virtue of notification No.50/2003 CE dt. 10-6-2003. It was filing excise returns containing monthly information (regarding the value of production and amount of Excise duty exemption claimed) with the Central Excise Department. It procures the chasis from China in CKD condition as per the design provided by it with its logo. Front Shockers, Tyres Tubes, Nuts, Bolts and Screws are procured in India. After welding and assembling the bike, accessories are fitted. The resultant product is commercially distinct. The activity squarely falls under section 2(29BA)(a) (which defines manufacture) inserted w.e.f. 01-04-2009. During the course of hearing, the learned AR relied on the cases of CIT vs. Chiranjeevi Wind Energy Ltd. (333 ITR 192)(Mad.)(2011) and CIT vs. Mahesh Chandra Sharma (3.08 ITR 222)(P H). 4.3(ii) Having considered the facts of the case, I am inclined to accept the contentions of the appellant. The design of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a change in a non-living physical object or article or thing,- (a) resulting in transformation of the object or article or thing into a new and distinct object or article or thing having a different name, character and use; or (b) bringing into existence of a new and distinct object or article or thing with a different chemical composition or integral structure . 6. However, expression production has not been defined in the Act. The expression manufacture as well as production have fallen for their interpretation and construction not only at the level of ITAT but before the Hon'ble Supreme Court also and the Hon'ble Court has explained both these expressions in detail. A reference to the decision of Hon'ble Supreme Court in the case of CIT vs. M/s. Arihant Tiles Marbles Pvt. Ltd. reported in 320 ITR 79, India Cine Agency Vs. CIT reported in 308 ITR 98, CIT vs. Sesa Goa Ltd. reported in 271 ITR 331 and to the following decision of Hon ble Gujarat High Court can be made : (a) CIT vs. Neokarna reported in 137 ITR 879 (Bombay) (b) CIT vs. Anglo French Drug Co. Ltd. reported in 191 ITR 92 (Bom.) (c) CIT vs. Prabhudass Kishore Da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t can no longer be regarded as the original commodity but instead is recognized as a new and distinct article that a manufacture can be said to take place. Process in manufacture or in relation to manufacture implies not only the production but also various stages through which the raw material is subjected to change by different operations. It is the cumulative effect of the various processes to which the raw material is subjected to that the manufactured product emerges. Therefore, each step towards such production would be a process in relation to the manufacture. Where any particular process is so integrally connected with the ultimate production of goods that but for that process processing of goods would be impossible or commercially inexpedient, that process is one in relation to the manufacture. (See Collector of Central Excise v. Rajasthan State Chemical Works [1991] 4 SCC 473). x x x x x x x x x x x x x x x x x x x x x x 11. To put it differently, the test to determine whether a particular activity amounts to manufacture' or not is: Does a new and different good emerge having distinctive name, use and character. The moment there is transformation into ..... X X X X Extracts X X X X X X X X Extracts X X X X
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