Delhi High Court
Commissioner Of Income Tax vs Northern Aromatics Ltd. on 28 February, 2005
Equivalent citations: (2005)196CTR(DEL)479
Bench: Swatanter Kumar, Madan B. Lokur
ORDER
1. We have heard the learned counsel for the appellant at some length. The argument before us is that the assessed had received a sum of Rs. 5,61,700 on account of processing charges and as such they were not involved in the activity of manufacturing. Thus, the benefit of Section 80-IA would not be available to the assessed. This question is primarily- a question of fact and has been answered by the Tribunal as follows :
"The assessed was deriving processing charges as a result of products manufactured on job work basis for outsiders. The only grievance of the Revenue is that the processing charges so received would be outside the purview of the Section 80-IA in so much as that the manufacturing activity which resulted in receipt of such charges was not done by the assessed for itself but for others. The stand of the Revenue is clearly in variance with the views of the Hon'ble jurisdictional High Court in the case of Nu-look (P) Ltd. v. CIT (1986) 157 ITR 253 (Del). The activity of the assessed is liable to be regarded as manufacturing activity irrespective of the fact whether the products manufactured therein are for its own business or it is done for others on job work basis. Evidently, Section 80-IA does not distinguish between the activity involving manufacturing on own account and situation is the same. The only essential prerequisite under Section 80-IA is that the eligible industrial undertaking should be carrying out the manufacture or production of articles or things, an issue which presently is not in dispute before us. It is also noteworthy that the assessing authority in the earlier assessment year i.e., 1995-96 has allowed the claim of the assessed for deduction under Section 80-IA. Therefore, having regard to the parity of reasoning initiated in the case of CIT v. J.B. Kharwar & Sons (1987) 163 ITR 394 (Guj) and Nu-look (P) Ltd. (supra), in our view, the assessed could not be denied the benefit of deduction under Section 80-IA on the incomes represented by processing charges. Hence, in our view, the conclusions drawn by the CIT(A) do not require any interference from our side."
2. We have also perused the order passed by the AO. There is no discussion, much less a plausible evidence before the AO to show that the unit of the assessed was not involved in manufacturing activity. In any case it is a finding of fact which we are not called upon to interfere under the provisions of Section 260A of the Act.
Dismissed.