The Commissioner Of Income Tax-9 v. M/S. Handy Tells Pvt. Ltd

ASN IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL (L) NO.1214 OF 2012 The Commissioner of Income Tax-9.v.M/s. Handy Tells Pvt. Ltd. ..Appellant. ..Respondent. Mr. Arvind Pinto for the Appellant.Ms.Aasifa Khan for the Respondent. CORAM : J.P. DEVADHAR AND M.S. SANKLECHA, JJ. DATE : 09TH JANUARY, 2013 PC: This appeal by the revenue under Section 260A of the Income Tax Act,1961 (“the Act”) has formulated the following questions of law for consideration by this Court. a)Whether the Tribunal was justified on the facts and circumstances of the case and in law in coming to the conclusion that the illumination of advertisement scrolling units be considered manufacture for the purposes of deduction u/s.80-IB? b)Whether on the facts and in the circumstances of the case the ITAT was right in upholding the directions of the CIT(A) to the AO to verify the number of employees in the company when the latter had already held that the number of workers were less than 10 on the basis of the employees registere that was impounded? c)Whether on the facts and in the circumstances of the case the order of the Tribunal was justified in remanding the question of the apportionment of profit to the file of the AO when it had already confirmed the levy of penalty for concealment on the very same issue? 2)So far as questions (b) and (c) are concerned, we do not see any reason to interfere with the order of the Tribunal which has merely upheld the order of the CIT(Appeals) remanding the matter to the Assessing officer for fresh decision . 3)So far as question (a) is concerned, it relates to the issue whether the illumination of advertisement scrolling units made by the respondent-assessee amounts to manufacturing activities so as to avail the benefit of deduction under Section 80IB of the Act. The Assessing Officer denied the respondent's claim under Section 80IB of the Act on the ground that the activity does not amount to manufacturing activity. In Appeal CIT(A) in its order dated 22/10/2007 records that process adopted by the respondent assessee in making of the illumination of Advertisement scrolling as under: “The process involved the following steps i.e. aluminium/brass metal purchased from the market and cut into appropriate sizes and then disjointed pieces are fixed with the support of angles and brackets by drilling holes and screwing then together, and thereafter appropriate lights are installed inside the boxes which basically give a back light to the advertisement material displayed in front of the boxes and specialized electric motors and rollers are installed whereby the principle advertised material is displayed by rolling motion caused by the electric motors installed inside the set boxes. The said scroll advertisement display units are then supplied to various companies who intend to display their products at various shopping centres and showrooms across India. The boxes are basically called scroll advertisement display units which have metal on all sides and the plastic print on the front side on which advertisement are displayed. From the other description of the process, it can be clearly seen that the raw material i. e. the brass/aluminium metal that is purchased from the market is different from the final product which is basically called scroll advertisement display units and therefore the A.O.'s stand that the appellant had not carried out any manufacturing activities cannot be accepted”. showrooms across India. The boxes are basically called scroll advertisement display units which have metal on all sides and the plastic print on the front side on which advertisement are displayed. From the other description of the process, it can be clearly seen that the raw material i. e. the brass/aluminium metal that is purchased from the market is different from the final product which is basically called scroll advertisement display units and therefore the A.O.'s stand that the appellant had not carried out any manufacturing activities cannot be accepted”. The Tribunal in the impugned order dated 28/3/2012 after examining the process records a finding of fact that a different commercial commodity emerges after carrying out the process on the raw material and hence the assessee is engaged in the manufacturing activity. This is a finding of fact and we find no fault in the order of the Tribunal granting consequent benefit under Section 80IB to the respondent. Therefore, question (a) does not raise any substantial question of law and thus, cannot be entertained. 4)The appeal is dismissed with no order as to costs. (M.S.SANKELCHA, J.) (J.P. DEVADHAR, J.)