Case Law Details
Brief Facts of the case
1. There are two appeal that need to be answered (i) For AY 2007-08 assessee had had claimed deduction/exemption under Section 10B of the Income Tax Act, 1961 (Act, for short) on profit of Rs.69,69,429/- from the Noida Unit. The Assessing Officer did not allow deduction under Section 10B on the ground that the assessee had not manufactured any goods in the Noida Unit. He referred to reply received from R.N. Metals, Jaipur, M/s Sustul Engg. Corp. Mumbai, M/s Chanderpur Works Yamuna Nagar (Haryana) to the effect that they had manufactured and exported various goods on behalf of respondent assessee. (ii) For the assessment year 2008-09, The assessee had claimed exemption/deduction under Section 10B of Rs Rs.12,17,41,816/-.
2. The assessee had claimed for AY 2008-09 that they had earned exempt income as they had carried out upgradation of cement plant in Zambia and also received consideration for design, fabrication and commissioning of a steel rolling mill in Kazakhastan. The assessee had filed a flow chart to explain the nature of work undertaken to support their claim under Section 10B of the Act.
3. The Assessing Officer for AY 2008-09, also held that the assessee was not carrying on manufacturing and assembling activities as they had erected the steel rolling mill and the cement plant abroad. The assessee himself did not manufacture any goods but had removed various parts after testing and disassemble them for the purpose of export. Testing, painting or pre-packaging for export cannot be construed as manufacture or assembling activity. The assessee himself did not possess adequate plant, machinery or infrastructure to carry out manufacturing activities.
4. CIT(A) allow assessee appeal on the ground of consistency, ITAT also affirmed in favour of the assessee. Therefore, aggrieved by the decision of the ITAT, revenue has preferred an appeal before High Court.
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