Brief of the case:
The Hon’ble Himachal Pradesh High Court in the case of CIT vs. Pawan Agarwal and others that the activity of drawing wires of thinner gauges from wires and rods of thicker gauges amount to manufacture as the paper insulated wires and strips of copper and aluminum manufactured by the assessees were different from its raw material, having different use and also having different commercial identification.
Facts of the case:
- The assessees have industrial undertaking in backward area of Himachal Pradesh and have claimed deductions under Section 80 IC of the Act. The assessee was engaged in manufacturing of paper insulated wires and strips of copper and aluminum, which are used in the oil filled electrical transformers. During the course of assessment proceedings AO held that the activity of drawing wires of thinner gauges from wires and rods of thicker gauges does not amount to manufacture or production as wire did not undergo any change in the process and the resultant commodity was also wire, though of different dimensions.
- Accordingly AO disallowed the deduction claimed u/s 80IC as the process was not amounting to manufacture. The order of assessment was confirmed by CIT (Appeals). On appeal before tribunal , the assessee’s appeal was allowed by it by holding that the thin and thick wires cannot be said to be same products as both them have different use and have different commercial name. As such the process has brought a change in raw material resulting in a new product having different name, character and use.
Contention of the Assessee:
Learned counsel for the assessee simply supported the order of tribunal passed in his favour and not pleaded anything additionally.
Contention of the Revenue:
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