M/s. Plasto Pack Industries, New Delhi V. ACIT, New Delhi

CO 56/DEL/2016

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 3772 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 4 month(s) 15 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 30-05-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2006-2007
• Appeal Filed On: 15-01-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAHUL CHAURASIA; ASHWANI KR ADITYA KR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F NEW DELHI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI O.P. KANT, ACCOUNTANT MEMBER I.T.A. NO.215/DEL/2014 ASSESSMENT YEAR: 2009-10 ACIT, CIRCLE-24(1), 13 TH FLOOR, E-2 BLOCK, CIVIC CENTRE, NEW DELHI. V. M/S. PLASTO PACKS INDUSTRIES, 945, SEC-A, POCKET-B, VASANT KUNJ, NEW DELHI. TAN/PAN: AAFFP 3293F (APPELLANT) (RESPONDENT) ITA NOS.5151, 5152, 5153/DEL/2015 ASSESSMENT YEARS: 2006-07, 2007-08, 2008-09 ACIT, CIRCLE-33(1), NEW DELHI. V. M/S. PLASTO PACKS INDUSTRIES, 945, SEC-A, POCKET-B, VASANT KUNJ, NEW DELHI. TAN/PAN: AAFFP 3293F (APPELLANT) (RESPONDENT) CO NOS.56, 57, 58/DEL/2016 (ARISING OUT OF ITA NOS.5151, 5152, 5153/DEL/2015 ASSESSMENT YEARS: 2006-07, 2007-08 & 2008-09 ACIT, CIRCLE-33(1), NEW DELHI. V. M/S. PLASTO PACKS INDUSTRIES, 945, SEC-A, POCKET-B, VASANT KUNJ, NEW DELHI. TAN/PAN: AAFFP 3293F (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI ATIQ AHMED, SR.D.R. RESPONDENT BY: SHRI ASHWANI KR. ADITYA KR., FCA & SHRI RAHUL CHAURASIA, CA DATE OF HEARING: 23 05 2018 DATE OF PRONOUNCEMENT: 30 05 2018 I.T.AS. NO.215/DEL/2014, 5151 TO 5123/DEL/2015 & CO NO.56, 57 & 58/DEL/2016 2 O R D E R PER BENCH: THE AFORESAID APPEALS AND THE CROSS OBJECTIONS HAVE BEEN FILED BY THE REVENUE AS WELL AS BY THE ASSESSE E AGAINST THE SEPARATE IMPUGNED ORDERS DATED 23.10.2014 FOR T HE ASSESSMENT YEAR 2009-10, DATED 20.05.201 FOR THE ASSESSMENT YEARS 2006-07, 2007-08 AND 2008-09. SINC E COMMON ISSUES ARE INVOLVED IN ALL THE APPEALS ARISI NG OUT OF IDENTICAL SET OF FACTS, THEREFORE, THE SAME WERE HE ARD TOGETHER AND ARE BEING DISPOSED OF BY WAY OF THIS CONSOLIDAT ED ORDER. 2. SINCE LEAD CASE IS ASSESSMENT YEAR 2009-10 WHICH HAS BEEN FOLLOWED IN THE OTHER YEARS, THEREFORE, WE ARE TAKING UP THE CASE FOR THE ASSESSMENT YEAR 2009-10 AND FINDIN G THEREIN WILL APPLY MUTATIS MUTANDIS IN ALL THE OTHER APPEALS. THE REVENUE IS MAINLY AGGRIEVED BY DELETION OF ADDITION OF RS.1,09,84,998/- ON ACCOUNT OF CLAIM OF DEDUCTION U /S.810IC WHICH WAS DISALLOWED BY THE ASSESSING OFFICER. 3. THE FACTS IN BRIEF ARE THAT THE ASSESSEE-FIRM IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF PLASTIC PACKAGI NG MATERIALS SINCE 1998 AT ITS UNIT LOCATED IN BADDI, HIMACHAL PRADESH. SINCE ITS MANUFACTURING FACILITY WAS LOCAT ED IN BADDI INDUSTRIAL AREA WHICH WAS NOTIFIED BY THE MINISTRY OF COMMERCE & INDUSTRY, VIDE NOTIFICATION DATED 7 TH JANUARY, 2003, THEREFORE, ASSESSEE WAS ELIGIBLE FOR MAKING A CLAIM U/S 80IC FOR ITS MANUFACTURING ACTIVITY. IT WAS ALSO RE GISTERED WITH I.T.AS. NO.215/DEL/2014, 5151 TO 5123/DEL/2015 & CO NO.56, 57 & 58/DEL/2016 3 THE CENTRAL EXCISE DEPARTMENT AND HAS BEEN FILED CE NVAT RETURN AND ALSO RETURN UNDER THE VAT TAX ACT, BEFOR E HIMACHAL PRADESH AUTHORITIES. IN THE ASSESSMENT ORD ER, IT HAS BEEN NOTED BY THE ASSESSING OFFICER THAT TEAM O F INCOME TAX OFFICIAL HAS VISITED THE ASSESSEES PREMISES AN D GODOWNS WHERE THE BUSINESS ACTIVITIES OF THE ASSESSEE WAS B EING CARRIED OUT. ON INSPECTION THE SAID TEAM OBSERVED T HAT NO MANUFACTURING ACTIVITY IS DONE BY THE ASSESSEE FIRM . STATEMENT OF EMPLOYEE, SHRI GIRISH CHANDER AND SHRI MASOOD ALI BEG, PRODUCTION/QUALITY MANAGER WAS RECORDED ON OATH RELEVANT EXTRACT OF WHICH HAS BEEN INCORPORATED IN THE IMPUGNED ASSESSMENT ORDER. FROM THE SAID STATEMENT, HE OBSERVED THAT THE ASSESSEE IS ONLY ENGAGED IN PACKA GING FOR M/S. GILLETTE INDIA LTD. AND IT IS ONLY DOING A JOB WORK. THUS, HE HELD THAT ASSESSEE IS NOT ENGAGED IN ANY MANUFAC TURING ACTIVITY, AND THEREFORE, DEDUCTION U/S.80IC IS NOT APPLICABLE. IN RESPONSE TO SHOW CAUSE NOTICE, THE ASSESSEE HAS EXPLAINED THE ENTIRE PROCESS OF MANUFACTURING AND THE AGREEME NT BETWEEN THE ASSESSEE AND THE M/S. GILLETTE INDIA LT D. AND HOW SUCH PACKAGING INVOLVES MECHANICAL PROCESS. HOW EVER, THE ASSESSING OFFICER REJECTED THE ASSESSEES CONTE NTION THAT IT IS NOT ANY KIND OF MANUFACTURING ACTIVITY. 4. BEFORE THE LD. CIT (A), DETAILED SUBMISSION AND MATERIAL WERE PRODUCED AND THE FINDINGS OF THE ASSESSING OFF ICER WERE REBUTTED ON VARIOUS COUNTS. ASSESSEES SUBMISSION H AVE BEEN NOTED AND DEALT WITH BY THE LD. CIT (A) IN PARAGRAP H 4.2 TO I.T.AS. NO.215/DEL/2014, 5151 TO 5123/DEL/2015 & CO NO.56, 57 & 58/DEL/2016 4 4.5. LD. CIT (A) AFTER CONSIDERING THE ENTIRE FACTS AND MATERIAL ON RECORD AND THE FACT THAT SIMILAR ISSUE HAD ARISE N IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2005-06 , WHEREIN LD. CIT (A) AFTER DETAILED DISCUSSION HAS A LLOWED THE CLAIM OF DEDUCTION U/S.80IC. THE RELEVANT OBSERVATI ON AND FINDING OF THE LD. CIT (A) READS AS UNDER: 4.6 I HAVE CAREFULLY CONSIDERED THE ARGUMENTS AND ASSER TIONS OF THE AO. AS ENUMERATED IN THE ASSESSMENT ORDER. I HA VE ALSO CAREFULLY CONSIDERED THE SUBMISSIONS MADE BY THE ID . AR AND THE POINT WISE REPLY GIVEN BY HIM. I HAVE ALSO CONSIDER ED THE EVIDENCES PLACED ON RECORD BY THE ID. AR. I HAVE TAKEN NOTE O F THE FACT THAT THE ISSUE REGARDING ALLOWABILITY OF DEDUCTION U/S 801C WAS CONSIDERED IN APPEAL IN THE EASE OF THIS APPELLANT DURING A.Y. 2005-06, WHEREIN THE THEN CIT(A)-XX1II, NEW DELHI GIVE A FINDING THA T THE CLAIM OF THE APPELLANT W AS CORRECT AND ALLOWABLE. I HAVE ALSO T AKEN NOTE OF THE FACT THAT THE CRUCIAL EVIDENCE PUT FORTH BY THE AO FOR DENYING DEDUCTION U/S. 80IC TO THE APPELLANT WAS THE STATEM ENT RECORDED UNDER OATH FROM THE PRODUCTION MANAGER OF THE APPEL LANT AT ITS BADDI FACTORY, SH. GIRISH CHANDER. IT IS PERTINENT TO NOTE THAT IN REPLY TO THE VERY FIRST QUESTION, SH. GIRISH CHANDE R STATED THAT HE WAS WORKING IN THE BADDI FACTORY OF THE APPELLANT S INCE JUNE 2009. THIS STATEMENT OF SH. GIRISH CHANDER HAS BEEN REPRO DUCED BY THE AO ON THE FIRST PAGE OF THE ASSESSMENT ORDER. THIS GIVES CREDENCE TO THE ASSERTION OF THE ID. AR THAT SH. GIRISH CHANDER HAD JOINED THE BADDI FACTORY AFTER THE END OF FINANCIAL YEAR 2008- 09, RELEVANT TO AY 2009-10, WHICH IS UNDER CONSIDERATION AND THEREF ORE, HE WAS NOT PRIVY TO THE BUSINESS ACTIVITIES BEING CARRIED OUT PRIOR TO HIS APPOINTMENT. IN THE LIGHT OF THE ABOVE DISCUSSION AND AFTER CARE FUL CONSIDERATION OF ALL THE FACTS OF THE CASE AND EVID ENCES ON RECORD. I AM OF THE OPINION THAT THE APPELLANT CANNOT BE DENI ED DEDUCTION I.T.AS. NO.215/DEL/2014, 5151 TO 5123/DEL/2015 & CO NO.56, 57 & 58/DEL/2016 5 U/S. 80IC OF THE ACT. THE ADDITION ON THIS GROUND A MOUNTING TO RS. 1.09.84.998/- IS HEREBY DELETED. 5. BEFORE US, THE LEARNED DEPARTMENT REPRESENTATIVE REFERRED TO THE ORDER OF THE ASSESSING OFFICER AND SUBMITTED THAT THE STATEMENT OF THE EMPLOYEES MAKES IT VERY C LEAR THAT THE ASSESSEE WAS DOING JOB WORK FOR PACKAGING OF PRO DUCTS IN SMALL AND LARGE BOXES FOR WHICH IT WAS PAID JOB WORK CHARGES FROM M/S. GILLETTE INDIA AND HENCE SUCH PACKAGING D OES NOT AMOUNT TO MANUFACTURING, AND THEREFORE, CLAIM OF DE DUCTION U/S.80IC HAS RIGHTLY BEEN DENIED. 6. ON THE OTHER HAND, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THIS PRECISE ISSUE HAD COME UP FOR CONSIDERATION IN THE ASSESSMENT YEAR 2005-06, WHERE IN DETAILED INQUIRY WAS MADE BY THE ASSESSING OFFICER IN THE REMAND PROCEEDINGS AND BASED ON THE REMAND REPORT O F THE ASSESSING OFFICER, THE LD. CIT (A) HAS HELD THAT TH E ASSESSEE SATISFIED THE CONDITIONS LAID DOWN IN SECTION 80IC AND ASSESSING OFFICER HAS ACCEPTED THAT THERE WAS A MAJO R EXPANSION OF MORE THAN 50% IN THE ASSESSMENT YEAR 2 005- 06. SINCE, SIMILAR CLAIM OF DEDUCTION U/S.80IC HAS BEEN ALLOWED IN THE ASSESSMENT YEAR 2005-06 BY THE LD. C IT (A) AGAINST WHICH NO APPEAL HAS BEEN FILED BY THE DEPAR TMENT, THEREFORE, THE CLAIM OF DEDUCTION CANNOT BE DENIED IN THE SUBSEQUENT YEARS. HE FURTHER DREW OUR ATTENTION TO THE RELEVANT PARAGRAPHS OF THE FINDING GIVEN BY THE LD. CIT (A) IN THE APPEAL FOR THE ASSESSMENT YEAR 2005-06. APART F ROM THAT, I.T.AS. NO.215/DEL/2014, 5151 TO 5123/DEL/2015 & CO NO.56, 57 & 58/DEL/2016 6 HE ALSO DREW OUR ATTENTION TO VARIOUS NOTIFICATIONS AND CERTIFICATES ISSUED BY CENTRAL AND STATE GOVERNMENT THAT THE ASSESSEE WAS REGISTERED AS MANUFACTURING UNIT, AND THEREFORE, IT COULD NOT BE HELD THAT ASSESSEE WAS NOT ENGAGED IN ANY MANUFACTURING ACTIVITIES. REGARDING STATEMENT OF TH E EMPLOYEES, HE SUBMITTED THAT FIRST OF ALL THE EMPLO YEES THEMSELVES ADMITTED THAT THEY WERE EMPLOYED IN THE YEAR 2009 ONLY, AND THEREFORE, SUCH STATEMENT DOES NOT H AVE ANY RELEVANCE FOR THE EARLIER YEARS. APART FROM THAT, N OTHING INCRIMINATING HAS BEEN STATED IN THE SAID STATEMENT AND THE INFERENCE DRAWN BY THE ASSESSING OFFICER THAT THE A SSESSEE IS MERELY DOING PACKAGING AND DOING JOB WORK IS NOT COR RECT. HE REFERRED TO THE NOTE OF ACTIVITIES OF THE ASSESSEE S FIRM THAT THE CHART SHOWING PROCESS OF MANUFACTURING TO CANVASS T HAT HOW THE ASSESSEE IS BEING CARRYING OUT A COMPLEX PROCES S OF MAKING PACKAGING MATERIALS AS PER THE ORDER GIVEN B Y THE M/S. GILLETTE INDIA LTD. THE NOTE OF ACTIVITIES AND CHART OF PROCESS OF MANUFACTURING OF PLASTIC PACKAGING MATER IAL HAS BEEN GIVEN FROM PAGES 35 TO 40 OF THE PAPER BOOK. T HIS NOTE WAS SUBMITTED BEFORE THE LD. CIT (A) DURING THE COU RSE OF APPELLATE PROCEEDINGS. THUS, AS A MATTER OF CONSIST ENCY AND ON FACTS OF THE CASE, THE DEDUCTION CLAIMED U/S.80I C CANNOT BE DENIED. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE RELEVANT MATERIALS AND FINDINGS GIVEN IN THE IMPUGN ED ORDERS AS WELL AS MATERIAL REFERRED TO AT THE TIME OF HEAR ING, THE I.T.AS. NO.215/DEL/2014, 5151 TO 5123/DEL/2015 & CO NO.56, 57 & 58/DEL/2016 7 ASSESSEE FIRM HAD UNDERTAKEN A SUBSTANTIAL EXPANSIO N IN THE ASSESSMENT YEAR 2005-06 AND IN THAT YEAR THE ISSUE FOR CLAIM OF DEDUCTION U/S.80IC HAD COME UP FOR CONSIDERATION . FROM THE PERUSAL OF THE ORDER OF LD. CIT(A) FOR THE ASSE SSMENT YEAR 2005-06, WE FIND THAT THE MACHINE WHICH WERE ADDED IN ASSESSMENT YEAR 2005-06 FOR THE PURPOSE OF MANUFACT URING OF PACKAGING MATERIAL AND DOING THE JOB WORK WERE A S UNDER: MACHINERY 1. BOX STRAPPING MACHINE 2. CUTTING MACHINE 3. DRILLING MACHINE 4. FORMING MACHINE 5. PAD PRINTING MACHINE 6. SHARING MACHINE 7. TAPING MACHINE 8. WELDING MACHINE THE ASSESSING OFFICER HAD DENIED THE DEDUCTION IN T HAT YEAR ON THE GROUND THAT THE NEW MACHINERIES PURCHASED BY THE ASSESSEE WERE LESS THAN 50% AS REQUIRED U/S.80IC. H OWEVER, REBUTTING THE SAID OBSERVATION OF THE ASSESSING OFF ICER, THE ASSESSEE HAD FILED THE ENTIRE DETAILS BASED ON WHIC H THE REMAND REPORT WAS SUBMITTED BY THE ASSESSING OFFICE R WHICH READS AS UNDER:- IN THIS CONNECTION, IT IS SUBMITTED THAT IN PROCEED INGS U/S. 250(4), THE ASSESSEE HAS PRODUCED BOOKS OF ACCOUNTS AND VOU CHERS WHICH WERE EXAMINED ON TEST CHECK BASIS. THE BOOKS OF ACC OUNTS WERE FOUND TO BE COMMENSURATE WITH FIGURES OF PROFIT & L OSS ACCOUNTS ENCLOSED WITH THE RETURN OF INCOME FOR ASSESSMENT Y EAR 2005-06. I.T.AS. NO.215/DEL/2014, 5151 TO 5123/DEL/2015 & CO NO.56, 57 & 58/DEL/2016 8 THE ASSESSEE WAS ALSO ASKED TO LEAD EVIDENCE IN FAV OUR OF THE SUBMISSION MADE BEFORE YOUR HONOUR IN THE APPELLATE PROCEEDINGS. DURING THE PROCEEDINGS U/S .250(4) THE ASSESSEE SUB STANTIATED ITS CLAIM BY FILING THE BILLS OF PLANT AND MACHINERY AL ONG WITH DETAILS OF CERTIFICATE OF EXPANSION ISSUED BY NATIONAL RESEARC H & TECHNOLOGY CONSORTIUM PARWANOO. IT HAS ALSO FILED APPROVAL OF REVISED CAPACITY ISSUED BY G.M. DISTT. INDUSTRIAL CENTRE, S OLAN. THE ASSESSEE HAS ALSO STATED THAT THE EXPANSION OF PLAN T AND MACHINERY TOOK PLACE IN THE F. Y 2003-04 AND 2004-0 5 FROM WHERE IT CAN BE SEEN THAT THE PLANT AND MACHINERY HAS INC REASED FROM THE INITIAL PLANT AND MACHINERY OF THE CONCERN WHEN THE DEDUCTION U/S 80 IB WAS CLAIMED. THE ASSESSEE HAS SO PRODUCED BIL LS OF OTHER PLANT AND MACHINERY PURCHASED DURING THE ASSESSMENT YEAR 2005- 06 AFTER CONSIDERATION OF WHICH THE PLANT AND MACHI NERY APPEARS TO BE INCREASED BY MORE THAN 50% DURING THE ASSESSMENT YEAR 2005- 06 ITSELF, THE MACHINERY ADDED DURING THE YEAR INCL UDES MACHINE (ELEVATOR) STACKER WORTH RS.2,15,280/- AND ELECTRON IC WEIGHING SCALE OF RS.6,900/- WHICH IS USED IN THE MANUFACTUR ING PROCESS WHOSE PURCHASE BILLS HAVE BEEN FILED NOW AND EXAMIN ED. THUS FROM THE AFORESAID FACTS THE ASSESSEE HAS FILE D EVIDENCES REGARDING THE SUBSTANTIAL EXPANSION OF PLANT AND MA CHINERY WHICH CAN BE CONSIDERED AT THE APPELLATE STAGE IN VIEW OF THE EVIDENCES FILED DURING THE APPEAL AND EXAMINED U/S 250(4) OF THE IT ACT. SUBMITTED FOR FURTHER CONSIDERATION IN APPELLATE PR OCEEDINGS'. 9. BASED ON THIS REMAND REPORT AND OTHER MATERIAL F ACTS ON RECORD, LD. CIT (A) HAD GIVEN A FAVOURABLE FINDING IN THE FOLLOWING MANNER:- 7. I HAVE CONSIDERED THE ORDER OF THE LEARNED ASSESSING OFFIC ER AND THE REMAND REPORT SUBMITTED BY HIM. THE SUBMISS IONS MADE BY THE LEARNED AR HAVE ALSO BEEN TAKEN INTO CONSIDERAT ION. IT IS I.T.AS. NO.215/DEL/2014, 5151 TO 5123/DEL/2015 & CO NO.56, 57 & 58/DEL/2016 9 RECAPITULATED THAT THE MATTER HAD BEEN REFERRED TO THE LD. ASSESSING OFFICER UNDER SUB SECTION (4) OF SECTION 250. IN TH E REPORT DATED 19.05.2009, AFTER MAKING SUITABLE ENQUIRIES AND EXA MINING THE BOOKS OF ACCOUNTS AND SUPPORTING DOCUMENTS, THE LD. ASSESSING OFFICER HAS CONCLUDED THAT THE ENHANCEMENT IN THE P LANT AND MACHINERY HAS BEEN MORE THAN 50% IN THE YEAR UNDER CONSIDERATION. IN SUCH CIRCUMSTANCES, AND AFTER A P OSITIVE FINDING BY THE ASSESSING OFFICER, I AM OF THE CONSIDERED OP INION THAT SINCE THE ASSESSEE HAS MET THIS CRUCIAL CONDITION, BASED ON EXAMINATION OF THE BOOKS, THE DEDUCTION U/S.80IC NEEDS TO BE AL LOWED. 10. THUS, THE INITIAL CLAIM OF 80IC HAS BEEN ALLOW ED AFTER DUE INQUIRY AND EXAMINATION OF FACTS ON RECORD AND SUCH ALLOWABILITY OF DEDUCTION HAS ATTAINED FINALITY, BE CAUSE AS STATED BY THE LEARNED COUNSEL NO APPEAL HAS BEEN FI LED BY THE REVENUE AGAINST THE SAID ORDER DATED 17.11.2009. WH ENCE IT HAS BEEN ACCEPTED THAT ASSESSEE FIRM HAS BEEN CARRY ING OUT MANUFACTURING ACTIVITIES AND ITS CLAIM OF DEDUCTION U/S.80IC HAS BEEN ALLOWED, THEN IN THE SUBSEQUENT YEAR SUCH A CLAIM CANNOT BE DISALLOWED. 12. COMING TO THE OBSERVATION AND THE FACTS AS NOTE D IN THE IMPUGNED ASSESSMENT ORDER, WE FIND THAT THE ASSESSI NG OFFICER HAS HEAVILY RELIED UPON THE STATEMENTS OF T WO OF THE EMPLOYEES OF THE ASSESSEE FIRM WHEREIN THEY HAVE ST ATED THAT THEY ARE DOING THE JOB WORK OF PACKAGING OF LOOSE P RODUCTS IN BOXES FOR WHICH THEY ARE BEING PAID JOB CHARGES FRO M M/S. GILLETTE INDIA LTD. AND APART FROM THAT THEY HAVE A LSO SAID THAT RAW MATERIAL ARE ALSO AVAILABLE BY M/S. GILLETTE IN DIA LTD. I.T.AS. NO.215/DEL/2014, 5151 TO 5123/DEL/2015 & CO NO.56, 57 & 58/DEL/2016 10 WHICH THE ASSESSEE FIRM IS PACKING THEM. BASED ON T HESE STATEMENTS, ASSESSING OFFICER HAS COME TO THE CONCL USION THAT ASSESSEE IS NOT INVOLVED IN THE MANUFACTURING OF PA CKAGING; THEREFORE, ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION U /S.80IC. BEFORE THE ASSESSING OFFICER, THE ASSESSEE HAD STAT ED THE PROCESS OF PACKAGING AND REPACKAGING IS A COMPLICAT ED TECHNICAL PROCESS WHICH INVOLVES CONTROL OF THERMAL AND PNEUMATIC POWER SPECIFIED TIME REGULATION AND IT IS NOT MERELY PACKAGING OF A PRODUCT IN A BOXES. FROM THE PERUSAL OF A NOTE AND THE ACTIVITIES CARRIED OUT AND THE CHART SHOWING PROCESS OF MANUFACTURING, IT IS SEEN THAT ASSESSEE HAS EXPLAINED THE MANUFACTURING ACTIVITY IN THE FOLLOWI NG MANNER:- THE FIRM IS PRIMARILY INTO MANUFACTURING AND PRODU CTION OF PLASTIC THERMOFORMED MATERIALS. IT IS DONE WITH USE OF VARI OUS TYPES OF PLASTIC MATERIAL/SHEETS AS BASE, FORMED AND SHAPED INTO SPECIFIC DESIGNS AND SHAPES AS PER THE REQUIREMENTS OF VARIO US CUSTOMERS AND THEIR USAGE THE PROCESS IS CARRIED OUT BY USE O F SPECIFIC DIES AND MOULDS AS PER THE CUSTOMER DESIGN PERFORMED ON DIFFERENT CONVERSION MACHINES BY USE OF THERMAL, PNEUMATIC AN D HYDRAULIC TECHNOLOGY WITH SPECIFIED TIME, TEMPERATURE PRESSUR E AND VACUUM REGULATION. A DETAILED PROCESS CHARTED IS DRAWN OUT AND ENCLOSED. FURTHER WE ARE ALSO INTO MAKING OF TOOLS, DYES AND MOULDS FOR VARIOUS SUCH OPERATIONS INCLUDING FORMING, SEALING, CUTTING, ETC. WE ALSO FABRICATE AND PROVIDE VARIOUS MACHINES FOR CAR RYING OUT SIMILAR OPERATIONS. THIS INCLUDES OUR WORKING ON A FULL FLE DGED TOOL ROOM OPERATION FOR WHICH WE HAVE NUMEROUS WORKING MACHIN ES WE ALSO UPGRADE AND RECONDITION SUCH MACHINES AND SELL. LIST OF DIFFERENT TYPES OF RAW MATERIALS USED FOR M AKING TOOLS, DIES, MOULDS & MACHINES ARE LIKE ALUMINIUM, EPOXY'S , WOODEN BLOCKS AND SHEETS, MDF SHEETS, DIFFERENT TYPE OF RU BBER SHEETS (NATURAL AND SYNTHETIC), MARKING PINS, ETC. ALL TYP ES OF ELECTRICAL, ELECTRONIC, PNEUMATICS, HYDRAULICS AND OTHER TYPES OF INSTRUMENTS, ARTICLES, PARTS, ACCESSORIES AND CONSUMABLES REQUIR ED FOR THE ABOVE I.T.AS. NO.215/DEL/2014, 5151 TO 5123/DEL/2015 & CO NO.56, 57 & 58/DEL/2016 11 MACHINES, INCLUDING HEATERS, MOTORS, CABLES, AIR BL OWING AND LIGHTING ACCESSORIES. EACH DIE NEEDS DIFFERENT ACTI VITIES TO BE DONE AND NO SPECIFIC PROCESS CAN BE DEFINED. WE HAVE ALSO ENTERED INTO A ONE STOP OPERATION OF S UCH ACTIVITIES ON BEHALF OF OUR CUSTOMERS WHEREBY WE PACK THEIR PRODU CTS OR CARRYOUT THEIR ACTIVITY OF INSTALLATION AS PER THEIR REQUIRE MENT TO COMPLEMENT OUR ABOVE PRODUCTIONS. IN THIS CASE, WHERE MOST OF THE CUSTOMERS HAVE TAKEN A SINGLE BILL FOR COMPLETE PRODUCTION AN D ALSO SEPARATE BILLS FOR PROVIDING MATERIAL AND SEPARATE BILL FOR EXECUTION OF PACKAGING ALSO, OFF LATE THERE HAVE BEEN SUCH OPERA TIONS, WHERE THE MATERIALS WERE PROVIDED BY THE CUSTOMER OR THEIR AP PROVED VENDORS AND WE ONLY DID THE TECHNICAL OPERATION OF HANDLING THEIR MATERIAL AND CONVERTING IT INTO A SELLABLE PROPOSITION. 13. BESIDES THIS, THE ASSESSEE HAS ALSO GIVE N THE DETAILS OF THE RAW MATERIAL PURCHASED, PRODUCT FLOW CHART A ND THE ENTIRE PROCESS OF PACKING OF ARTICLES. FROM THE FUR THER PERUSAL OF THE RECORD, IT IS SEEN THAT ASSESSEE HAS SHOWN T URNOVER FROM VARIOUS ACTIVITIES IN THE FOLLOWING MANNER:- S. NO. PARTICULARS AMOUNT (IN RS.) AMOUNT (IN RS.) (A) MANUFACTURE OF PACKAGING MATERIAL 1,36,58,621/- (B) (I) PACKAGING OF GOODS ON JOB WORK BASIS 63,43,995 (B)(II) SALE OF PACKING MATERIAL WITH JOB WORK 18,31,202 81,75,197 (C) MANUFACTURE OF DIES/MOULDS 6,53,000 TOTAL 2,24,86,818 APART FROM THAT, IT IS UNDISPUTED FACT THAT ASSESSE E FIRM HAS BEEN CATEGORIZED UNDER THE CENTRAL EXCISE TARIF F ACT AS A MANUFACTURER, BECAUSE IT MANUFACTURES DYES AND MOUL DS FOR I.T.AS. NO.215/DEL/2014, 5151 TO 5123/DEL/2015 & CO NO.56, 57 & 58/DEL/2016 12 MAKING AND DESIGNING THE PACKAGING MATERIALS. IT HA S ALSO GRANTED APPROVAL FROM DISTRICT INDUSTRIES CENTER, S OLAN. ALL THOSE DETAILS OF APPROVAL, CERTIFICATES AND NOTIFIC ATION ISSUED IN THE CASE OF THE ASSESSEE HAVE BEEN PLACED IN THE PAPER BOOK. THE ENTIRE FACTS AND MATERIAL WHICH HAS BEEN PLACED BEFORE THE ASSESSING OFFICER HAS NOT BEEN REBUTTED AND ASSESSING OFFICER HAS TRIED TO DRAW INFERENCE THAT MERE PACKAGING DOES NOT AMOUNT TO MANUFACTURING. IF ASSE SSEE IS MAKING PACKAGING MATERIAL AS PER THE REQUIREMENT OF THE PRODUCT WITH THE AID AND HELP OF VARIOUS KINDS OF M ACHINES AS INCORPORATED ABOVE AND IT IS ALSO REGISTERED AS MAN UFACTURER UNDER THE VARIOUS LAWS, THEN SUCH A GENERAL INFEREN CE BASED ON STATEMENT OF EMPLOYEES CANNOT BE GIVEN MUCH CRED ENCE. THUS, WE DO NOT FIND ANY SUBSTANTIAL MERITS IN THE GROUNDS RAISED BY THE REVENUE THAT ASSESSEE IS NOT ENGAGED IN THE MANUFACTURING OF PACKAGING MATERIAL, THEREFORE, THE FINDING OF LD. CIT(A) IS UPHOLD AND THE GROUNDS RAISED BY THE REVENUE IS DISMISSED. 14. SINCE EXACTLY SIMILAR GROUND HAS BEEN RAISE D IN THE ASSESSMENT YEARS 2006-07, 2007-08 & 2008-09, WHEREI N SIMILAR CLAIM OF DEDUCTION HAS BEEN DENIED AFTER RE OPENING THE CASE U/S.147, THEREFORE, OUR FINDING GIVEN WILL APPLY HERE MUTATIS MUTANDIS. ACCORDINGLY, WE UPHOLD THE ORDER OF THE LD. CIT (A) IN ALLOWING THE DEDUCTION U/S.80IC. 15. IN THE CROSS OBJECTIONS, THE ASSESSEE HAS CHALL ENGING THE VALIDITY OF REOPENING U/S.148 FOR THE ASSESSMEN T YEARS I.T.AS. NO.215/DEL/2014, 5151 TO 5123/DEL/2015 & CO NO.56, 57 & 58/DEL/2016 13 2006-07, 2007-08 AND 2008-09. AT THE TIME OF HEARIN G, LEARNED COUNSEL HAS NOT PRESSED THE GROUNDS RAISED IN THE CROSS OBJECTIONS AND ACCORDINGLY, SAME IS DISMISSED AS NOT PRESSED. 16. IN THE RESULT, THE APPEALS OF THE REVENUE AS WE LL AS THE CROSS OBJECTIONS RAISED BY THE ASSESSEE ARE DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH MAY, 2018. SD/- SD/- [O.P. KANT] [AMIT SHUKLA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 30 TH MAY, 2018