Alkraft Thermotechnologies Pvt. Ltd Vs DCIT (ITAT Chennai)
Assembly Held as Manufacture – Deduction U/s 80-IC Allowed – Expansion ≠ Splitting-Up of Business – Integrated Cooling System Module Is Distinct Product – ITAT Chennai
ITAT Chennai allowed deduction u/s 80-IC holding that assembly of components into an integrated engine cooling system module constitutes ‘manufacture/production’ where final product is commercially distinct from inputs. Tribunal rejected AO’s allegation that Uttarakhand unit was merely an assembly or packing unit and held that scientific processing, value addition of 35-40% & transformation into new product satisfies Sec 80-IC(2)(a). It further ruled that setting up satellite unit near OEM customer amounted to business expansion and not splitting-up of existing Chennai unit, especially where overall capacity and supplies increased. Relying on SC & HC rulings (India Cine Agencies, Arihant Tiles, Gemini Communication etc.), ITAT directed AO to allow 80-IC deduction for all years and delete disallowances. Appeals allowed in favour of assessee.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
These are appeals preferred by the assessee against the order of the Learned Commissioner of Income Tax (Appeals)/NFAC, (hereinafter referred to as ‘Ld.CIT(A)‘), Delhi, dated 09.05.2025 & 08.05.2025 for the Assessment Years (hereinafter referred to as ‘AY’) 2011-12 to 2013-14, 2017-18 & 2018-19. Since the issues involved are common, all the appeals for all the assessment years were heard together. Both the parties also argued them together raising similar arguments on these issues. Accordingly, for the sake of convenience and brevity, we dispose all the appeals by this consolidated order.
