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TMI Blog2022 (5) TMI 90X X X X Extracts X X X X X X X X Extracts X X X X ..... LAIYA, ACCOUNTANT MEMBER, AND MS. SUCHITRA KAMBLE, JUDICIAL MEMBER Assessee by: Shri Ashwani Kumar, Adv And Shri Aditya Kumar, CA Revenue by: Shri N.C. Upadhyay, CIT-DR ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER:- These three separate appeals by the assessee are preferred against three separate orders of the ld. CIT(A), Muzaffarnagar dated 06.09.2016 pertaining to A.Ys 2011-12, 2012-13 and 2013-14. 2. Since common grievances are involved in all these appeals, these were heard together and are disposed of by this common order for the sake of convenience and brevity. 3. The common grievances raised by the assessee read as under; 1) The Learned Commissioner of Income Tax (Appeals) Muzaffrnagar ( Ld. CIT (A) ) has erred on facts in law in disallowing the claim of the appellant for deduction u/s 80-IC of the Income Tax Act, 1961 ( The Act ) and confirming the addition of income of INR 1,84,28,269/- on account of deduction claimed under section 80IC as made by the Learned Joint Commissioner of Income Tax Range- 2, Dehradun, ( Ld. AO ). 2) The Ld. CIT (A) has erred on facts and in law in holding that the appellant is not rendering services in the fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . (1) Where the gross total income of an assessee includes any profits and gains derived by an undertaking or an enterprise from any business referred to in sub-section (2), there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction from such profits and gains, as specified in sub-section (3). (2) This section applies to any undertaking or enterprise,-- (a) which has begun or begins to manufacture or produce any article or thing, not being any article or thing specified in the Thirteenth Schedule, or which manufactures or produces any article or thing, not being any article or thing specified in the Thirteenth Schedule and undertakes substantial expansion during the period beginning- (i) on the 23rd day of December, 2002 and ending before the 1st day of April, [2007], in any Export Processing Zone or Integrated Infrastructure Development Centre or Industrial Growth Centre or Industrial Estate or Industrial Park or Software Technology Park or Industrial Area or Theme Park, as notified by the Board in accordance with the scheme framed and notified by the Central Government in this rega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and thereafter, twenty-five per cent (or thirty per cent where the assessee is a company) of the profits and gains. (4) This section applies to any undertaking or enterprise which fulfils all the following conditions, namely:-- (i) it is not formed by splitting up, or the reconstruction, of a business already in existence : Provided that this condition shall not apply in respect of an undertaking which is formed as a result of the re-establishment, reconstruction or revival by the assessee of the business of any such undertaking as is referred to in section 33B, in the circumstances and within the period specified in that section; (ii) it is not formed by the transfer to a new business of machinery or plant previously used for any purpose. Explanation.--The provisions of Explanations 1 and 2 to sub-section (3) of section 80-IA shall apply for the purposes of clause (ii) of this sub-section as they apply for the purposes of clause (ii) of that sub- section. (5) Notwithstanding anything contained in any other provision of this Act, in computing the total income of the assessee, no deduction shall be allowed under any other section contained in Chapter VIA or in sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt in the case of National Union of Commercial Employees Vs M. R. Meher, Industrial Tribunal, Bombay (supra) held that the concept of industry covers the production of goods as well as rendering of services, in the said case, it has been held as under: It would be realised that the concept of industry postulates partnership between capital and labour or between the employer and his employees. It is under this partnership that the employer contributes his capital and the employees their labour and the Joint contribution of capital and labour leads directly to the production which the industry has in view. In other words, the cooperation between capital and labour or between the employer and his employees which is treated as a working test in determining whether any activity amounts to an industry, is the co-operation which is directly involved in the production of goods or in the rendering of service. It cannot be suggested that every form or aspect of human activity in which capital and labour co-operate or employer and employees assist each other is an industry. The distinguishing feature of an industry is that for the production of goods or for the rendering of service, co-op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e accountable to the assessee and not to the clients and the assessee was responsible/accountable for the work done by its employees at the site of the clients who entered into agreements for providing the services with the assessee and not with the personnel deputed by the assessee. The copy of the agreement entered into by the assessee with M/s Tech Mahindra is placed at page nos. 251 to 257 of the assessee's paper book, in the said agreement, it is clearly mentioned at page no. 252 253that the assessee will provide the services of technically qualified and experienced personnel to Tech Mahindra Ltd. for working and assigning as may be desired by Tech Mahindra ltd. on time and material basis on offshore as well as onsite assignments and that the assessee shall ensure that personnel engaged under this agreement must have appropriate qualifications competence and in all respects acceptable to Tech Mahindra Ltd. and that the assessee company shall be responsible for making appropriate deduction in respect of Income Tax and other statutory deductions under laws in which the services are provided, meaning thereby all the payments of salaries, related taxes and other statutory ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s (a) Sauces, ketchup, etc 21.03 15135 to 15137 and 15139 (b) Fruit juices and fruit pulp 2202.40 (c) Jams, jellies, vegetable juices, puree, pickles, etc. 20.01 (d) Preserved fruits and vegetables (e) Processing of fresh fruits and vegetables including packaging (f) Processing, preservation, packaging of mushrooms 5. Food Processing Industry excluding those included in the Thirteenth Schedule 19.01 to 19.04 6. Sugar and its by-products - - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dule Fourteenth of the Income Tax Act. In the present case, the AO while disallowing the claim of the assessee riled upon the decision of the Hon'ble Supreme Court in the case of MSCO Pvt. Ltd. Vs Union of India AIR 1985 SC 76. However, in the said decision, the Hon'ble Supreme court observed that the word industry has many meaning and that it is hazardous to interpret a word in accordance with its definition in another statute or statutory instrument and more so when the word to be construed is to be used in a taxing statute or a notification issued thereunder, it should be understood in its commercial sense. From the judgment of the Hon'ble Supreme Court in the said case, it is clear that the principles laid down therein are that the term industry has many meanings and the meaning must be given which it receives in ordinary parlance or understood in the sense in which people conversant with the subject matter of the statute or statutory instrument understand it. In the aforesaid referred to case, the Hon'ble Supreme Court held as under: The expression 'industry' has many meanings. It means 'skill', 'ingenuity', 'dexterity' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed datacom links by us referred in para 4 of Back-up Form. The link is being used by them for transmission of data for development of Software for export purposes since 17 Jan. 2006. Sd/- J.T.O. Telephones Clement Town Dehradun Sd/- S.D.E Telephones Clement Town Dehradun 33. The assessee situated at Dehradun is also having electricity meter in its name which is evident from page nos. 214 215 of the assessee's paper book which is the copy of the electricity bill for the period 28th January 2006 to 10th March 2006 and due date of payment was 31st March 2006. In the present case, it is also relevant to point out that nothing is brought on record to substantiate that the assessee was not situated at Dehradun and having its registered office there, copy of the Income Tax Return of the assessee for the year under consideration is placed at page nos. 55 to 95 of the assessee's paper book, in the said return the address mentioned is .... Express Business Park Subhash Road, Dehradun, Uttaranchal . Therefore, it is clear that assessee is situated at Dehradun in State of Uttaranchal. 34. The CBDT issued a Circular No. 694 da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent Fund, Dehradun. 36. In this present case, the assessee controlled and provided all the facilities to its clients from Dehradun and the activities undertaken by the assessee falls in Item No. 13 of Part C of Schedule Fourteenth to the Income Tax Act, 1961. The assessee has its operational unit at Dehradun, paying taxes in Uttaranchal, creating jobs in the said State, bringing new IT call centres and BPO companies to Dehradun to deliver IT services. Therefore, it fulfills the conditions to claim the deduction u/s 80IC of the Act. We, therefore, by considering the totality of the facts as discussed hereinabove, are of the view that the assessee rightly claimed the deduction u/s 80IC of the Act and the AO was not justified in denying the said claim. In that view of the matter, we set aside the impugned order and direct the AO to allow the claim of the assessee. 37. Identical issue is involved in ITA Nos. 4277 5744/Del/2012 and ITA No. 2506/Del/2013 for the Assessment Years 2008-09, 2009-10 2010-11 respectively. Therefore, our findings given in the former part of this order in ITA No. 5856/Del/2011 for the assessment year 2007-08 shall apply mutatis mutandis for the remai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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