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TMI Blog2006 (11) TMI 140X X X X Extracts X X X X X X X X Extracts X X X X ..... A. Sinha (Member) Present for the Department Shri Harinder Kumar Addl. C.I.T., Chandigarh Present for the Applicant Shri Kanwaljit Singh Jolly, FCA RULING (By Mr. A.S.Narang) - Ms. Meenu Sahi Mamik a resident of Amsterdam, Netherlands has filed an application under section 245Q(1) of the Income-tax Act, 1961 (for short the Act) on March 10, 2006 in Form No.34C (meant for non-resident applicants). The applicant wants to establish a manufacturing facility for the formulation of pharmaceuticals in partnership with one of her family members in the state of Himachal Pradesh, India to avail of the tax holiday under section 80-IC of the Act. The Central Government has declared Income Tax Holiday for a 10 years' period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mments has stated that the applicant has not given any details regarding nature of the direct business, which would be procured by the applicant's firm. The direct business may or may not involve manufacturing, which is the basic condition for claiming exemption under section 80-IC of the Act. Therefore, it is not possible to say that the applicant would be entitled to the claim of deduction under the said section. That for claiming the benefit, the industrial undertaking/enterprise, is required to be situated in a specified area. The proposed firm (undertaking), situated in Himachal Pradesh, would belong to the applicant and not to M/s. Bayer Health, Mumbai. By no stretch of imagination M/s. Bayer Health located at Mumbai can claim the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er it is functioning as industrial undertaking or an enterprise provided the conditions prescribed in the section are fulfilled. As per the rejoinder, Bayer Health Care Pharmaceuticals would establish a place of business in the State of Himachal Pradesh as an 'enterprise' and would carry out manufacturing activities on their own by procuring raw material and using labour with their own quality control. ……….. It may, however, be mentioned here that these facts, as stated in the rejoinder, are contrary to the facts stated in the original application which read as under: "The finished products would be produced by the firm under the direct control and supervision of Bayer Healthcare Pharmaceuticals." Whereas now, it is stated that Bayer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ured by the applicant's firm under their own trademark, and they are also entitled to exemption under section 80-IC on the profits earned on sale of the finished products. That applicant is seeking exemption under section 80-IC only in respect of formulation charges received from Bayer Health. 7. We have given careful consideration to the rival contentions of the counsel for the applicant, Commissioner and also examined the deed of partnership executed on 4th day of October 2006 between the applicant and her husband Mr. Vikramjeet Singh Mamik. It is seen that the deed has not been registered and it is also not mentioned whether the partners and the witnesses signed it in India or Netherlands. The deed is silent as to the place where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uated in India is said to be resident in India in any previous year in every case, except where during a particular year the control and management of its affairs is situated wholly outside India. Section 6(2) is in following terms: "Residence in India. For the purpose of this Act, - (1) xx xx (2) A Hindu undivided family, firm or other association of persons is said to be resident in India in any previous year in every case except where during that year the control and management of its affairs is situated wholly outside India." The word "affairs" must mean affairs which are relevant for the purpose of the Act and which have some relation to income. It is settled, that the expression "control and management" means ..... X X X X Extracts X X X X X X X X Extracts X X X X
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