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TMI Blog2019 (11) TMI 869X X X X Extracts X X X X X X X X Extracts X X X X ..... . Since issues common and facts and similar, these cases are being disposed of vide this consolidated order. In both these appeals, the only grievance of the assessee is that the Ld. CIT(Appeals) rejected the assessee's claim for deduction u/s.80-IA of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') in respect of profits derived from its new industrial undertaking of manufacturing surface coating systems. 3. The facts demonstrate that for the assessee, in the first round of litigation, the Tribunal had remanded the issue of deduction u/s.80-IA of the Act to the Assessing Officer for fresh adjudication. The relevant directions of the Tribunal are in Para 3.13 of its order. The case of the Department in the first round of li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0-IA of the Act to the assessee of Rs. 13,06,751/- for the assessment year 1995-96 and Rs. 40,42,621/- for the assessment year 1997-98 and the reasons for not granting of deduction u/s.80-IA of the Act by the Assessing Officer are as follows: (i) The assessee has failed to prove investment of fresh capital in the industrial undertaking; (ii) Assessee has nowhere claimed that it has set up a new industrial undertaking for manufacture of surface coating system; (iii) The assessee does not own plant and machinery but gets the equipment manufactured from others and does not itself directly manufacture the surface coating systems. (iv) The assessee has not given details of which type of' actual manufacturing work was being done by it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted only minor modifications of the existing product and therefore, the assessee is not eligible for claiming deduction u/s.80-IA of the Act. 6. We have perused the case records and analyzed the facts and circumstances in this case. We find that the Assessing Officer rejected the claim of deduction u/s.80-IA of the Act to the assessee on the ground that according to his analysis, most of the manufacturing works are outsourced by the assessee and that therefore, the criteria for claiming deduction u/s.80-IA of the Act has not been fulfilled by the assessee. The Ld. CIT(Appeals) on the other hand, though rejected the claim of deduction u/s.80-IA of the Act but on different premises that there was neither fresh manufacturing unit of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l nature of the end product which has to be integrated with the manufacturing set up of the buyer and the procurement, fabrication, manufacturing and assembly activities take place at different places within and outside the assessee's premises. Therefore, the location of the manufacturing action had to be therefore primarily outside the four walls of the assessee's establishment but by that fact the sanctity of the business of manufacturing is not lost. Thus, merely because some components are bought out or the parts are got fabricated under the direct supervision and control of the assessee on the basis of own drawing and designs cannot mean that the undertaking was not set up or it constitutes 'reconstruction of the existing business' rat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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