The Commissioner Of Income Tax-4 v. M/S. Harijivandas Gordhandas & Co. Pvt. Ltd

ASN IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.1062 OF 2011 The Commissioner of Income Tax-4. v.M/s. Harijivandas Gordhandas & Co. Pvt. Ltd. ..Appellant. ..Respondent. Mr. Vimal Gupta, Sr. Advocate along with Ms. Padma Divakar for the Appellant.None for the Respondent. CORAM : J.P. DEVADHAR AND M.S. SANKLECHA, JJ. DATE : 09TH JANUARY, 2013 PC: This appeal by the revenue challenges the order dated 20/8/2010 of the Income Tax Appellate Tribunal relating to the assessment year 2005-06. 2)revenue for the consideration of this Court. Following question of law has been formulated by the Whether on the facts and circumstances of the case and in law the Tribunal was justified in holding that the activity of the assessee of designing jacquard cards amounts to manufacturing activity and eligible for deduction u/s.80IB? 3)The issue involved in this appeal is whether the assessee is entitled to benefit of Section 80IB of the Act. According to the revenue, the activity of making jacquard cards is not a manufacturing activity. The Tribunal in the impugned order records an extract from its order for the assessment year 2002-03 in the assessee's own case that jacquard card is distinct from a simple card as under: “The assessee prepares a design either manually or on a computer. This design is punched on a plain card. Plain card is a raw material. Punched card is fed into the machine manufacturing textile and the design punched in the card is reflected in the ultimate textile manufactured. Cards prepared by the assessee are used to the manufacturing of the textile, they are called jacquard card. These cards are compatible with the machinery manufacturing textiles. The end product is distinct from a simple card. The details of the manufacturing process as explained by the assessee before the AO shows that the raw material being a plain card gets converted into a jacquard Card which is distinct and different from the raw material. It is meant for specific use in textile industry. We have also perused the documents listed in para-5 of this order which were filed by the assessee before the Assessing officer and are of the view that the assessee was engaged in the activity of manufacture and was therefore entitled to claim deduction u/s,. 80IB of the Act. We therefore confirm the order of learned CIT(A) and dismiss this appeal by the revenue”. 4)The above extract in the impugned order is taken from the order passed by the Tribunal for the earlier assessment year 2002-03. We are informed that the revenue has not filed any appeal against the order of the Tribunal for the assessment year 2002-03 as the tax effect was less than 4 lacs. In any event, we agree with the reasoning given by the Tribunal to hold that the process of making jacquard card is a manufacturing process as a commodity distinct and different from cards emerges. Thus, the respondent assessee is entitled to benefit under Section 80IB of the Act. No fault can be found with the finding of fact recorded by the Tribunal. 5)In the circumstances, no substantial question of law arises. Therefore, the appeal is dismissed with no order as to costs. (M.S.SANKELCHA, J.) (J.P. DEVADHAR, J.)