The ACIT, 3(1), Bhopal V. M/s R.M.Chemicals Pvt. Ltd., Bhopal

ITA 474/IND/2010

• Counselvise Citation: 47422714 RSA 2010
• Duration Of Justice: 11 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 14-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARUN DEWAN
• Assessee Lawyers: M C MEHTA; H CHIMNANI
• Keywords: Business income; Depreciation; TDS
• Section: 80IB; 10B; 80IC; 32

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO.474/IND/2010 AY: 2006-07 ASSTT. COMMR. OF INCOME TAX 3(1), BHOPAL ..APPELLANT V/S. M/S R.M. CHEMICALS PVT. LTD. BHOPAL PAN AAACR-7154D ..RESPONDENT C.O. NO. 21/IND/2010 (ARISING OUT OF ITA NO.474/IND/2010 M/S R.M. CHEMICALS PVT. LTD. BHOPAL .....OBJECTOR VS ASSTT. COMMR. OF INCOME TAX 3(1), BHOPAL .....RESPONDENT DEPTT. BY : SHRI ARUN DEWAN, SR. DR ASSESSEE BY : S/SHRI MC MEHTA AND H.CHIMNANI 2 ORDER PER JOGINDER SINGH, JUDICIAL MEMBER THE APPEAL HAS BEEN PREFERRED BY THE REVENUE AGAINS T THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) DATED 5.5.2008 ON THE GROUND THAT LEARNED COMMISSIONER OF INCOME TAX (APPEALS) WAS NOT JUSTIFIED IN RESTRICTING THE ADDITION TO RS. 2,33,923/- OUT OF ADDITION OF RS. 74,10,223/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DISALLOWANCE OF DED UCTION CLAIMED UNDER CHAPTER VIA IN RESPECT OF U/S 80IC AN D U/S 80IB(3) OF THE ACT WHEREAS THE ASSESSEE HAS FILED T HE CROSS OBJECTION ON THE GROUND THAT THE LEARNED COMMISSION ER OF INCOME TAX (APPEALS) WAS NOT JUSTIFIED IN MAINTAINI NG THE DISALLOWANCE OF ENTIRE AMOUNT OF RS.2,33,923/- U/S 80IB AND 80IC OF THE ACT. 2. DURING HEARING OF THIS APPEAL WE HAVE HEARD SHRI ARUN DEWAN, LEARNED SENIOR DR AND SHRI M.C. MEHTA ALONG WITH SHRI HITESH CHIMNANI, LD. COUNSEL FOR ASSESSEE. SO FAR A S THE APPEAL OF THE REVENUE IS CONCERNED, THE CRUX OF ARGUMENTS ON BEHALF 3 OF THE REVENUE IS THAT THE LEARNED ASSESSING OFFICE R HAS RIGHTLY DISALLOWED THE CLAIM OF THE ASSESSEE AS THE PROFIT AND GAINS CLAIMED TO BE DERIVED FROM THE UNDERTAKING ARE NOT FROM THE BUSINESS OF MANUFACTURING OR PRODUCTION. ON THE OT HER HAND, THE LD. COUNSEL FOR ASSESSEE STRONGLY DEFENDED THE IMPUGNED ORDER. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL AVAILABLE ON FILE. THE BRIEF FACTS ARE TH AT THE ASSESSEE, A PRIVATE LIMITED COMPANY, IS ENGAGED IN THE BUSINE SS OF MANUFACTURING OF DETERGENT BAR AND POWER AT DHULE, MAHARASHTRA AND VILLAGE BADDI HIMACHAL PRADESH. OU T OF THE PROFIT AND GAINS FROM BUSINESS AT BADDI, RS. 68,44, 020/- WAS CLAIMED AS DEDUCTION UNDER SECTION 80IC AND RS. 5,6 6,203/- AT DHULE UNDER SECTION 80IB OF THE ACT. THE LEARNED AS SESSING OFFICER DISALLOWED AND ADDED BOTH THE CLAIMED DEDUC TIONS BY OPINING THAT THE ASSESSEE IS MERELY DOING A JOB WOR K, THEREFORE, NOT ENGAGED IN MANUFACTURING ACTIVITIES AS REQUIRED UNDER THE ACT. ON APPEAL, THE LEARNED COMMISSIONER OF INCOME TAX 4 (APPEALS) DECIDED IN FAVOUR OF THE ASSESSEE WHICH I S UNDER CHALLENGE BEFORE THE TRIBUNAL. THE ASSESSEE IS DOI NG JOB WORK FOR HINDUSTAN LEVER LIMITED FOR WHICH RAW MATERIAL AND PACKING MATERIAL IS SUPPLIED BY HINDUSTAN LEVER LIMITED TO THE ASSESSEE AND THE MARKETING OF THE SAME IS ALSO DONE BY HINDU STAN LEVER LIMITED FOR WHICH PROCESSING CHARGES ARE GIVEN TO T HE ASSESSEE AFTER DEDUCTING TDS. THE OBSERVATION OF THE LEARNED ASSESSING OFFICER IS REPRODUCED HEREUNDER :- IN THE CASE OF THE ASSESSEE COMPANY MERELY JOB WORK ON BEHALF OF HLL WAS DONE. IN THAT WAY ASSESSEE COMPANY IS NOT INVOLVED IN THE RISK OF AN ENTERPRISE. NEITHER ASSESSEE COMPANY IS INVOLVED IN THE RISK OF MARKET FLUCTUATIONS. NEITHER ASSESS EE COMPANY HAS TO BOTHER ABOUT PURCHASE, PACKAGING AND MARKETING OF FINISHED PRODUCTS. IN THAT WAY ASSESSEE IS NOT INDULGING IN A BUSINESS ACTIVITY IN A MANNER THAT CAN SATISFY LEGISLATIVE INTENT OF CHAPTER-VIA. BECAUSE THESE SECTIONS CLEARLY GIVE BENEFIT FOR BUSINESS UNDERTAKING ESTAB LISHED WITH ENTREPRENEURIAL SKILLS TO DO THE BUSINESS BEARING A LL THE RISKS INVOLVED. THEREFORE, CLAIM OF THE ASSESSEE OF DEDUCTION CANNOT BE ALLOWED AND TREATED AS HIS BUSINESS INCOME IN NORMAL COURSE. 5 4. BEFORE COMING TO ANY CONCLUSION, WE ARE REPRODUC ING HEREUNDER THE RELEVANT PROVISIONS OF THE SECTIONS AS ARE APPLICA BLE FOR THE RELEVANT ASSESSMENT YEAR UNDER CONSIDERATION I.E. 2006-07:- DEDUCTION IN RESPECT OF PROFITS AND GAINS FROM CERT AIN INDUSTRIAL UNDERTAKINGS OTHER THAN INFRASTRUCTURE DEVELOPMENT UNDERTAKINGS. 80A 80-IB. (1) WHERE THE GROSS TOTAL INCOME OF AN ASSESSEE INC LUDES ANY PROFITS AND GAINS DERIVED FROM ANY BUSINESS REFERRED TO IN SUB-SECTIONS (3) TO 81 [(11), (11A) AND (11B) 81A ] (SUCH BUSINESS BEING HEREINAFTER REFERRED TO AS T HE ELIGIBLE BUSINESS), THERE SHALL, IN ACCORDANCE WITH AND SUBJECT TO THE PROVISIONS OF THIS SECTION, BE ALLOWED, IN COMPUTIN G THE TOTAL INCOME OF THE ASSESSEE, A DEDUCTION FROM SUCH PROFITS AND GAINS O F AN AMOUNT EQUAL TO SUCH PERCENTAGE AND FOR SUCH NUMBER OF ASSESSMENT YEARS AS SPECIFIED IN THIS SECTION. (2) THIS SECTION APPLIES TO ANY INDUSTRIAL UNDERTAK ING WHICH FULFILS ALL THE FOLLOWING CONDITIONS, NAMELY : (I) IT IS NOT FORMED 82 BY SPLITTING UP 82 , OR THE RECONSTRUCTION 82 , OF A BUSINESS ALREADY IN EXISTENCE : PROVIDED THAT THIS CONDITION SHALL NOT APPLY IN RESPECT OF A N INDUSTRIAL UNDERTAKING WHICH IS FORMED AS A RESULT OF THE RE-E STABLISHMENT, RECONSTRUCTION OR REVIVAL BY THE ASSESSEE OF THE BU SINESS OF ANY SUCH INDUSTRIAL UNDERTAKING AS IS REFERRED TO IN SECTION 33B, IN TH E CIRCUMSTANCES AND WITHIN THE PERIOD SPECIFIED IN THAT SECTION; (II) IT IS NOT FORMED BY THE TRANSFER TO A NEW BUS INESS OF MACHINERY OR PLANT PREVIOUSLY USED FOR ANY PURPOSE; (III) IT MANUFACTURES OR PRODUCES ANY ARTICLE OR TH ING, NOT BEING ANY ARTICLE OR THING SPECIFIED IN THE LIST IN THE ELEVE NTH SCHEDULE, OR OPERATES ONE OR MORE COLD STORAGE PLANT OR PLANTS, IN ANY PA RT OF INDIA : PROVIDED THAT THE CONDITION IN THIS CLAUSE SHALL, IN RELATION TO A SMALL SCALE INDUSTRIAL UNDERTAKING OR AN INDUSTRIAL UNDERTAKING REFERRED TO IN SUB- SECTION (4) SHALL APPLY AS IF THE WORDS NOT BEING ANY ART ICLE OR THING SPECIFIED IN THE LIST IN THE ELEVENTH SCHEDULE HAD BEEN OMITTED. EXPLANATION 1.FOR THE PURPOSES OF CLAUSE (II), AN Y MACHINERY OR PLANT WHICH WAS USED OUTSIDE INDIA BY ANY PERSON OTHER THAN THE ASSESSEE SHALL NOT BE REGARDED AS MACHINERY OR PLANT PREVIOUSLY USED FOR ANY PURPOSE, IF THE FOLLOWING CONDITIONS ARE FULFILLED, NAMELY : (A) SUCH MACHINERY OR PLANT WAS NOT, AT ANY TIME PREVIO US TO THE DATE OF THE INSTALLATION BY THE ASSESSEE, USED IN INDIA; 6 (B)SUCH MACHINERY OR PLANT IS IMPORTED INTO INDIA FROM ANY COUNTRY OUTSIDE INDIA; AND (C)NO DEDUCTION ON ACCOUNT OF DEPRECIATION IN RESP ECT OF SUCH MACHINERY OR PLANT HAS BEEN ALLOWED OR IS ALLOWABLE UNDER THE PR OVISIONS OF THIS ACT IN COMPUTING THE TOTAL INCOME OF ANY PERSON FOR ANY PE RIOD PRIOR TO THE DATE OF THE INSTALLATION OF THE MACHINERY OR PLANT BY THE A SSESSEE. EXPLANATION 2.WHERE IN THE CASE OF AN INDUSTRIAL UNDERTAKING, ANY MACHINERY OR PLANT OR ANY PART THEREOF PREVIOUSLY U SED FOR ANY PURPOSE IS TRANSFERRED TO A NEW BUSINESS AND THE TOTAL VALUE O F THE MACHINERY OR PLANT OR PART SO TRANSFERRED DOES NOT EXCEED TWENTY PER CENT OF THE TOTAL VALUE OF THE MACHINERY OR PLANT USED IN THE BUSINESS, THEN, FOR THE PURPOSES OF CLAUSE (II) OF THIS SUB-SECTION, THE CONDITION SPECIFIED THEREIN S HALL BE DEEMED TO HAVE BEEN COMPLIED WITH; (IV) IN A CASE WHERE THE INDUSTRIAL UNDERTAKING MA NUFACTURES OR PRODUCES ARTICLES OR THINGS, THE UNDERTAKING EMPLOYS TEN OR MORE WORKERS IN A MANUFACTURING PROCESS CARRIED ON WITH THE AID OF PO WER, OR EMPLOYS TWENTY OR MORE WORKERS IN A MANUFACTURING PROCESS CARRIED ON WITHOUT THE AID OF POWER. (3) THE AMOUNT OF DEDUCTION IN THE CASE OF AN INDUS TRIAL UNDERTAKING SHALL BE TWENTY-FIVE PER CENT (OR THIRTY PER CENT WHERE THE ASSESSEE IS A COMPANY), OF THE PROFITS AND GAINS DERIVED FROM SUCH INDUSTRIAL UNDERTAKING FOR A PERIOD OF TEN CONSECUTIVE ASSESSMENT YEARS (OR TWELVE CONSECU TIVE ASSESSMENT YEARS WHERE THE ASSESSEE IS A CO-OPERATIVE SOCIETY) BEGIN NING WITH THE INITIAL ASSESSMENT YEAR SUBJECT TO THE FULFILMENT OF THE FO LLOWING CONDITIONS, NAMELY : (I) IT BEGINS TO MANUFACTURE OR PRODUCE, ARTICLES OR THINGS OR TO OPERATE SUCH PLANT OR PLANTS AT ANY TIME DURING THE PERIOD BEGIN NING FROM THE 1ST DAY OF APRIL, 1991 AND ENDING ON THE 31ST DAY OF MARCH, 19 95 OR SUCH FURTHER PERIOD AS THE CENTRAL GOVERNMENT MAY, BY NOTIFICATION IN T HE OFFICIAL GAZETTE, SPECIFY WITH REFERENCE TO ANY PARTICULAR UNDERTAKING; (II) WHERE IT IS AN INDUSTRIAL UNDERTAKING BEING A SMALL SCALE INDUSTRIAL UNDERTAKING, IT BEGINS TO MANUFACTURE OR PRODUCE AR TICLES OR THINGS OR TO OPERATE ITS COLD STORAGE PLANT [NOT SPECIFIED IN SU B-SECTION (4) OR SUB-SECTION (5)] AT ANY TIME DURING THE PERIOD BEGINNING ON THE 1ST DAY OF APRIL, 1995 AND ENDING ON THE 31ST DAY OF MARCH, 83 [2002]. 84 (4) THE AMOUNT OF DEDUCTION IN THE CASE OF AN INDUS TRIAL UNDERTAKING IN AN INDUSTRIALLY BACKWARD STATE SPECIFIED IN THE EIGHTH SCHEDULE SHALL BE HUNDRED PER CENT OF THE PROFITS AND GAINS DERIVED FROM SUCH INDUSTRIAL UNDERTAKING FOR FIVE ASSESSMENT YEARS BEGINNING WITH THE INITIAL AS SESSMENT YEAR AND THEREAFTER TWENTY-FIVE PER CENT (OR THIRTY PER CENT WHERE THE ASSESSEE IS A COMPANY) OF THE PROFITS AND GAINS DERIVED FROM SUCH INDUSTRIAL UNDERTAKING : PROVIDED THAT THE TOTAL PERIOD OF DEDUCTION DOES NOT EXCEED TEN CONSECUTIVE ASSESSMENT YEARS (OR TWELVE CONSECUTIVE ASSESSMENT YEARS WHERE THE ASSESSEE IS A CO-OPERATIVE SOCIETY) SUBJECT TO FULFILMENT OF THE CONDITION THAT IT BEGINS TO MANUFACTURE OR PRODUCE ARTICLES OR THINGS OR TO OPE RATE ITS COLD STORAGE PLANT OR PLANTS DURING THE PERIOD BEGINNING ON THE 1ST DA Y OF APRIL, 1993 AND ENDING ON THE 31ST DAY OF MARCH, 85 [2004] : 7 PROVIDED FURTHER THAT IN THE CASE OF SUCH INDUSTRIES IN THE NORTH-EA STERN REGION, AS MAY BE NOTIFIED 86 BY THE CENTRAL GOVERNMENT, THE AMOUNT OF DEDUCTION SHALL BE HUNDRED PER CENT OF PROFITS AND GAINS FOR A PERIOD OF TEN ASSESSMENT YEARS, AND THE TOTAL PERIOD OF DEDUCTION SHALL IN SUCH A CASE NOT EXCEED TEN ASSESSMENT YEARS : 87 [ PROVIDED ALSO THAT NO DEDUCTION UNDER THIS SUB-SECTION SHALL BE ALLOWED FOR THE ASSESSMENT YEAR BEGINNING ON THE 1ST DAY OF APR IL, 2004 OR ANY SUBSEQUENT YEAR TO ANY UNDERTAKING OR ENTERPRISE REFERRED TO I N SUB-SECTION (2) OF SECTION 80-IC :] 88 [ PROVIDED ALSO THAT IN THE CASE OF AN INDUSTRIAL UNDERTAKING IN TH E STATE OF JAMMU AND KASHMIR, THE PROVISIONS OF THE FIRST PROV ISO SHALL HAVE EFFECT AS IF FOR THE FIGURES, LETTERS AND WORDS 31ST DAY OF MAR CH, 2004, THE FIGURES, LETTERS AND WORDS 31ST DAY OF MARCH, 89 [2012] HAD BEEN SUBSTITUTED : PROVIDED ALSO THAT NO DEDUCTION UNDER THIS SUB-SECTION SHALL BE ALLOWED TO AN INDUSTRIAL UNDERTAKING IN THE STATE OF JAMMU AND KA SHMIR WHICH IS ENGAGED IN THE MANUFACTURE OR PRODUCTION OF ANY ARTICLE OR THING SPECIFIED IN PART C OF THE THIRTEENTH SCHEDULE.] (5) THE AMOUNT OF DEDUCTION IN THE CASE OF AN INDUS TRIAL UNDERTAKING LOCATED IN SUCH INDUSTRIALLY BACKWARD DISTRICTS AS THE CENT RAL GOVERNMENT MAY, HAVING REGARD TO THE PRESCRIBED GUIDELINES 90 , BY NOTIFICATION 91 IN THE OFFICIAL GAZETTE, SPECIFY IN THIS BEHALF AS INDUSTRIALLY BAC KWARD DISTRICT OF CATEGORY A OR AN INDUSTRIALLY BACKWARD DISTRICT OF CATEGORY B SHALL BE, (I) HUNDRED PER CENT OF THE PROFITS AND GAINS DERI VED FROM AN INDUSTRIAL UNDERTAKING LOCATED IN A BACKWARD DISTRICT OF CATEG ORY A FOR FIVE ASSESSMENT YEARS BEGINNING WITH THE INITIAL ASSESSMENT YEAR AN D THEREAFTER, TWENTY-FIVE PER CENT (OR THIRTY PER CENT WHERE THE ASSESSEE IS A COMPANY) OF THE PROFITS AND GAINS OF AN INDUSTRIAL UNDERTAKING : PROVIDED THAT THE TOTAL PERIOD OF DEDUCTION SHALL NOT EXCEED TEN CONSECUTIVE ASSESSMENT YEARS OR WHERE THE ASSESSEE IS A CO-OPER ATIVE SOCIETY, TWELVE CONSECUTIVE ASSESSMENT YEARS : PROVIDED FURTHER THAT THE INDUSTRIAL UNDERTAKING BEGINS TO MANUFACTU RE OR PRODUCE ARTICLES OR THINGS OR TO OPERATE ITS COLD S TORAGE PLANT OR PLANTS AT ANY TIME DURING THE PERIOD BEGINNING ON THE 1ST DAY OF OCTOBER, 1994 AND ENDING ON THE 31ST DAY OF MARCH, 92-94 [2004]; (II) HUNDRED PER CENT OF THE PROFITS AND GAINS DER IVED FROM AN INDUSTRIAL UNDERTAKING LOCATED IN A BACKWARD DISTRICT OF CATEG ORY B FOR THREE ASSESSMENT YEARS BEGINNING WITH THE INITIAL ASSESSM ENT YEAR AND THEREAFTER, TWENTY-FIVE PER CENT (OR THIRTY PER CENT WHERE THE ASSESSEE IS A COMPANY) OF THE PROFITS AND GAINS OF AN INDUSTRIAL UNDERTAKING : PROVIDED THAT THE TOTAL PERIOD OF DEDUCTION DOES NOT EXCEED EIGHT CONSECUTIVE ASSESSMENT YEARS (OR WHERE THE ASSESSEE IS A CO-OPE RATIVE SOCIETY, TWELVE CONSECUTIVE ASSESSMENT YEARS) : PROVIDED FURTHER THAT THE INDUSTRIAL UNDERTAKING BEGINS TO MANUFACTU RE OR PRODUCE ARTICLES OR THINGS OR TO OPERATE ITS COLD S TORAGE PLANT OR PLANTS AT ANY TIME DURING THE PERIOD BEGINNING ON THE 1ST DAY OF OCTOBER, 1994 AND ENDING ON THE 31ST DAY OF MARCH, 92-94 [2004]. 8 (6) THE AMOUNT OF DEDUCTION IN THE CASE OF THE BUSI NESS OF A SHIP SHALL BE THIRTY PER CENT OF THE PROFITS AND GAINS DERIVED FR OM SUCH SHIP FOR A PERIOD OF TEN CONSECUTIVE ASSESSMENT YEARS INCLUDING THE INIT IAL ASSESSMENT YEAR PROVIDED THAT THE SHIP (I) IS OWNED BY AN INDIAN COMPANY AND IS WHOLLY US ED FOR THE PURPOSES OF THE BUSINESS CARRIED ON BY IT; (II) WAS NOT, PREVIOUS TO THE DATE OF ITS ACQUISIT ION BY THE INDIAN COMPANY, OWNED OR USED IN INDIAN TERRITORIAL WATERS BY A PER SON RESIDENT IN INDIA; AND (III) IS BROUGHT INTO USE BY THE INDIAN COMPANY AT ANY TIME DURING THE PERIOD BEGINNING ON THE 1ST DAY OF APRIL, 1991 AND ENDING ON THE 31ST DAY OF MARCH, 1995. (7) THE AMOUNT OF DEDUCTION IN THE CASE OF ANY HOTE L SHALL BE (A) FIFTY PER CENT OF THE PROFITS AND GAINS DERIVE D FROM THE BUSINESS OF SUCH HOTEL FOR A PERIOD OF TEN CONSECUTIVE YEARS BEGINNI NG FROM THE INITIAL ASSESSMENT YEAR AS IS LOCATED IN A HILLY AREA OR A RURAL AREA OR A PLACE OF PILGRIMAGE OR SUCH OTHER PLACE AS THE CENTRAL GOVER NMENT MAY, HAVING REGARD TO THE NEED FOR DEVELOPMENT OF INFRASTRUCTUR E FOR TOURISM IN ANY PLACE AND OTHER RELEVANT CONSIDERATIONS, SPECIFY BY NOTIF ICATION IN THE OFFICIAL GAZETTE AND SUCH HOTEL STARTS FUNCTIONING AT ANY TI ME DURING THE PERIOD BEGINNING ON THE 1ST DAY OF APRIL, 1990 AND ENDING ON THE 31ST DAY OF MARCH, 1994 OR BEGINNING ON THE 1ST DAY OF APRIL, 1997 AND ENDING ON THE 31ST DAY OF MARCH, 2001: PROVIDED THAT NOTHING CONTAINED IN THIS CLAUSE SHALL APPLY T O A HOTEL LOCATED AT A PLACE WITHIN THE MUNICIPAL JURISDICTION (WHETHER KNOWN AS A MUNICIPALITY, MUNICIPAL CORPORATION, NOTIFIED AREA COMMITTEE OR A CANTONMENT BOARD OR BY ANY OTHER NAME) OF CALCUTTA, CHENNAI, DELHI OR MUMB AI, WHICH HAS STARTED OR STARTS FUNCTIONING ON OR AFTER THE 1ST DAY OF APRIL , 1997 AND BEFORE THE 31ST DAY OF MARCH, 2001: PROVIDED FURTHER THAT THE SAID HOTEL IS APPROVED BY THE PRESCRIBED A UTHORITY FOR THE PURPOSE OF THIS CLAUSE IN ACCORDANCE WITH T HE RULES 95 MADE UNDER THIS ACT AND WHERE THE SAID HOTEL IS APPROVED BY THE PRE SCRIBED AUTHORITY BEFORE THE 31ST DAY OF MARCH, 1992, SHALL BE DEEMED TO HAV E BEEN APPROVED BY THE PRESCRIBED AUTHORITY FOR THE PURPOSE OF THIS SECTIO N IN RELATION TO THE ASSESSMENT YEAR COMMENCING ON THE 1ST DAY OF APRIL, 1991; (B) THIRTY PER CENT OF THE PROFITS AND GAINS DERIV ED FROM THE BUSINESS OF SUCH HOTEL AS IS LOCATED IN ANY PLACE OTHER THAN TH OSE MENTIONED IN SUB-CLAUSE (A) FOR A PERIOD OF TEN CONSECUTIVE YEARS BEGINNING FROM THE INITIAL ASSESSMENT YEAR IF SUCH HOTEL HAS STARTED OR STARTS FUNCTIONIN G AT ANY TIME DURING THE PERIOD BEGINNING ON THE 1ST DAY OF APRIL, 1991 AND ENDING ON THE 31ST DAY OF MARCH, 1995 OR BEGINNING ON THE 1ST DAY OF APRIL, 1 997 AND ENDING ON THE 31ST DAY OF MARCH, 2001: PROVIDED THAT NOTHING CONTAINED IN THIS CLAUSE SHALL APPLY T O A HOTEL LOCATED AT A PLACE WITHIN THE MUNICIPAL JURISDICTION (WHETHER KNOWN AS A MUNICIPALITY, MUNICIPAL CORPORATION, NOTIFIED AREA COMMITTEE, TOW N AREA COMMITTEE OR A CANTONMENT BOARD OR BY ANY OTHER NAME) OF CALCUTTA, CHENNAI, DELHI OR 9 MUMBAI, WHICH HAS STARTED OR STARTS FUNCTIONING ON OR AFTER THE 1ST DAY OF APRIL, 1997 AND BEFORE THE 31ST DAY OF MARCH, 2001; (C) THE DEDUCTION UNDER CLAUSE (A) OR CLAUSE (B) S HALL BE AVAILABLE ONLY IF (I)THE BUSINESS OF THE HOTEL IS NOT FORMED BY THE SPLITTING UP, OR THE RECONSTRUCTION, OF A BUSINESS ALREADY IN EXISTENCE OR BY THE TRANSFER TO A NEW BUSINESS OF A BUILDING PREVIOUSLY USED AS A HOTEL O R OF ANY MACHINERY OR PLANT PREVIOUSLY USED FOR ANY PURPOSE; (II)THE BUSINESS OF THE HOTEL IS OWNED AND CARRIED ON BY A COMPANY REGISTERED IN INDIA WITH A PAID-UP CAPITAL OF NOT LESS THAN FI VE HUNDRED THOUSAND RUPEES; (III)THE HOTEL IS FOR THE TIME BEING APPROVED BY T HE PRESCRIBED AUTHO-RITY 95 : PROVIDED THAT ANY HOTEL APPROVED BY THE PRESCRIBED AUTHORITY 95 BEFORE THE 1ST DAY OF APRIL, 1999 SHALL BE DEEMED TO HAVE BEEN APP ROVED UNDER THIS SUB- SECTION. 96 [(7A) THE AMOUNT OF DEDUCTION IN THE CASE OF ANY MU LTIPLEX THEATRE SHALL BE (A) FIFTY PER CENT OF THE PROFITS AND GAINS DERIV ED, FROM THE BUSINESS OF BUILDING, OWNING AND OPERATING A MULTIPLEX THEATRE, FOR A PERIOD OF FIVE CONSECUTIVE YEARS BEGINNING FROM THE INITIAL ASSESS MENT YEAR IN ANY PLACE : PROVIDED THAT NOTHING CONTAINED IN THIS CLAUSE SHALL APPLY T O A MULTIPLEX THEATRE LOCATED AT A PLACE WITHIN THE MUNICIPAL JUR ISDICTION (WHETHER KNOWN AS A MUNICIPALITY, MUNICIPAL CORPORATION, NOTIFIED ARE A COMMITTEE OR A CANTONMENT BOARD OR BY ANY OTHER NAME) OF CHENNAI, DELHI, MUMBAI OR KOLKATA; (B) THE DEDUCTION UNDER CLAUSE (A) SHALL BE ALLOW ABLE ONLY IF (I) SUCH MULTIPLEX THEATRE IS CONSTRUCTED AT ANY T IME DURING THE PERIOD BEGINNING ON THE 1ST DAY OF APRIL, 2002 AND ENDING ON THE 31ST DAY OF MARCH, 2005; (II) THE BUSINESS OF THE MULTIPLEX THEATRE IS NOT FORMED BY THE SPLITTING UP, OR THE RECONSTRUCTION, OF A BUSINESS ALREADY IN EXISTE NCE OR BY THE TRANSFER TO A NEW BUSINESS OF ANY BUILDING OR OF ANY MACHINERY OR OF PLANT PREVIOUSLY USED FOR ANY PURPOSE; (III) THE ASSESSEE FURNISHES ALONGWITH THE RETURN OF INCOME, THE REPORT OF AN AUDIT IN SUCH FORM AND CONTAINING SUCH PARTICULARS AS MAY BE PRESCRIBED 97 AND DULY SIGNED AND VERIFIED BY AN ACCOUNTANT, AS D EFINED IN THE EXPLANATION BELOW SUB-SECTION (2) OF SECTION 288 , CERTIFYING THAT THE DEDUCTION HAS BEEN CORRECTLY CLAIMED. (7B) THE AMOUNT OF DEDUCTION IN THE CASE OF ANY CON VENTION CENTRE SHALL BE (A) FIFTY PER CENT OF THE PROFITS AND GAINS DERIV ED, BY THE ASSESSEE FROM THE BUSINESS OF BUILDING, OWNING AND OPERATING A CONVEN TION CENTRE, FOR A PERIOD OF FIVE CONSECUTIVE YEARS BEGINNING FROM THE INITIA L ASSESSMENT YEAR; (B) THE DEDUCTION UNDER CLAUSE (A) SHALL BE ALLOW ABLE ONLY IF 10 (I) SUCH CONVENTION CENTRE IS CONSTRUCTED AT ANY T IME DURING THE PERIOD BEGINNING ON THE 1ST DAY OF APRIL, 2002 AND ENDING ON THE 31ST DAY OF MARCH, 2005; (II) THE BUSINESS OF THE CONVENTION CENTRE IS NOT FORMED BY THE SPLITTING UP, OR THE RECONSTRUCTION, OF A BUSINESS ALREADY IN EXISTE NCE OR BY THE TRANSFER TO A NEW BUSINESS OF ANY BUILDING OR OF ANY MACHINERY OR PLANT PREVIOUSLY USED FOR ANY PURPOSE; (III) THE ASSESSEE FURNISHES ALONGWITH THE RETURN OF INCOME, THE REPORT OF AN AUDIT IN SUCH FORM AND CONTAINING SUCH PARTICULARS AS MAY BE PRESCRIBED 98 , AND DULY SIGNED AND VERIFIED BY AN ACCOUNTANT, AS D EFINED IN THE EXPLANATION BELOW SUB-SECTION (2) OF SECTION 288 , CERTIFYING THAT THE DEDUCTION HAS BEEN CORRECTLY CLAIMED.] (8) THE AMOUNT OF DEDUCTION IN THE CASE OF ANY COMP ANY CARRYING ON SCIENTIFIC RESEARCH AND DEVELOPMENT SHALL BE HUNDRED PER CENT OF THE PROFITS AND GAINS OF SUCH BUSINESS FOR A PERIOD OF FIVE ASSESSMENT YE ARS BEGINNING FROM THE INITIAL ASSESSMENT YEAR IF SUCH COMPANY (A) IS REGISTERED IN INDIA; (B) HAS THE MAIN OBJECT OF SCIENTIFIC AND INDUSTRI AL RESEARCH AND DEVELOPMENT; (C) IS FOR THE TIME BEING APPROVED BY THE PRESCRIB ED AUTHORITY 99 AT ANY TIME BEFORE THE 1ST DAY OF APRIL, 1999. 1 [(8A) THE AMOUNT OF DEDUCTION IN THE CASE OF ANY CO MPANY CARRYING ON SCIENTIFIC RESEARCH AND DEVELOPMENT SHALL BE HUNDRE D PER CENT OF THE PROFITS AND GAINS OF SUCH BUSINESS FOR A PERIOD OF TEN CONS ECUTIVE ASSESSMENT YEARS, BEGINNING FROM THE INITIAL ASSESSMENT YEAR, IF SUCH COMPANY (I) IS REGISTERED IN INDIA; (II) HAS ITS MAIN OBJECT THE SCIENTIFIC AND INDUST RIAL RESEARCH AND DEVELOPMENT; (III) IS FOR THE TIME BEING APPROVED BY THE PRESCR IBED AUTHORITY 2 AT ANY TIME AFTER THE 31ST DAY OF MARCH, 2000 BUT BEFORE THE 1S T DAY OF APRIL, 3 [2007]; (IV) FULFILS SUCH OTHER CONDITIONS AS MAY BE PRESC RIBED 4 .] 5 [ (9) THE AMOUNT OF DEDUCTION TO AN UNDERTAKING SHALL BE HUNDRED PER CENT OF THE PROFITS FOR A PERIOD OF SEVEN CONSECUTIVE ASSES SMENT YEARS, INCLUDING THE INITIAL ASSESSMENT YEAR, IF SUCH UNDERTAKING FULFIL S ANY OF THE FOLLOWING, NAMELY: (I) IS LOCATED IN NORTH-EASTERN REGION AND HAS BEG UN OR BEGINS COMMERCIAL PRODUCTION OF MINERAL OIL BEFORE THE 1ST DAY OF APR IL, 1997; (II) IS LOCATED IN ANY PART OF INDIA AND HAS BEGUN OR BEGINS COMMERCIAL PRODUCTION OF MINERAL OIL ON OR AFTER THE 1ST DAY O F APRIL, 1997; (III) IS ENGAGED IN REFINING OF MINERAL OIL AND BE GINS SUCH REFINING ON OR AFTER THE 1ST DAY OF OCTOBER, 1998 5A [ BUT NOT LATER THAN THE 31ST DAY OF MARCH, 2012 ] . 11 SPECIAL PROVISIONS OF SECTION 80IC IN RESPECT OF CE RTAIN UNDERTAKINGS OR ENTERPRISES IN CERTAIN SPECIAL CATE GORY STATES ARE AS UNDER FOR THE ASSESSMENT YEAR 2006-07 :- 80-IC. (1) WHERE THE GROSS TOTAL INCOME OF AN ASSESSEE IN CLUDES ANY PROFITS AND GAINS DERIVED BY AN UNDERTAKING OR AN ENTERPRIS E FROM ANY BUSINESS REFERRED TO IN SUB-SECTION (2), THERE SHALL, IN ACC ORDANCE WITH AND SUBJECT TO THE PROVISIONS OF THIS SECTION, BE ALLOWED, IN COMP UTING THE TOTAL INCOME OF THE ASSESSEE, A DEDUCTION FROM SUCH PROFITS AND GAINS, AS SPECIFIED IN SUB-SECTION (3). (2) THIS SECTION APPLIES TO ANY UNDERTAKING OR ENTE RPRISE, (A) WHICH HAS BEGUN OR BEGINS TO MANUFACTURE OR PR ODUCE ANY ARTICLE OR THING, NOT BEING ANY ARTICLE OR THING SPECIFIED IN THE THIRTEENTH SCHEDULE, OR WHICH MANUFACTURES OR PRODUCES ANY ARTICLE OR THING , NOT BEING ANY ARTICLE OR THING SPECIFIED IN THE THIRTEENTH SCHEDULE AND UNDE RTAKES SUBSTANTIAL EXPANSION DURING THE PERIOD BEGINNING (I)ON THE 23RD DAY OF DECEMBER, 2002 AND ENDING BE FORE THE 1ST DAY OF APRIL, 29 [2007], IN ANY EXPORT PROCESSING ZONE OR INTEGRATED INFRASTRUCTURE DEVELOPMENT CENTRE OR INDUSTRIAL GROWTH CENTRE OR I NDUSTRIAL ESTATE OR INDUSTRIAL PARK OR SOFTWARE TECHNOLOGY PARK OR INDU STRIAL AREA OR THEME PARK, AS NOTIFIED BY THE BOARD IN ACCORDANCE WITH T HE SCHEME FRAMED AND NOTIFIED 30 BY THE CENTRAL GOVERNMENT IN THIS REGARD, IN THE S TATE OF SIKKIM; OR (II)ON THE 7TH DAY OF JANUARY, 2003 AND ENDING BEF ORE THE 1ST DAY OF APRIL, 2012, IN ANY EXPORT PROCESSING ZONE OR INTEGRATED I NFRASTRUCTURE DEVELOPMENT CENTRE OR INDUSTRIAL GROWTH CENTRE OR I NDUSTRIAL ESTATE OR INDUSTRIAL PARK OR SOFTWARE TECHNOLOGY PARK OR INDU STRIAL AREA OR THEME PARK, AS NOTIFIED BY THE BOARD IN ACCORDANCE WITH T HE SCHEME FRAMED AND NOTIFIED 30 BY THE CENTRAL GOVERNMENT IN THIS REGARD, IN THE S TATE OF HIMACHAL PRADESH OR THE STATE OF UTTARANCHAL; OR (III)ON THE 24TH DAY OF DECEMBER, 1997 AND ENDING BEFORE THE 1ST DAY OF APRIL, 2007, IN ANY EXPORT PROCESSING ZONE OR INTEGRATED I NFRASTRUCTURE DEVELOPMENT CENTRE OR INDUSTRIAL GROWTH CENTRE OR I NDUSTRIAL ESTATE OR INDUSTRIAL PARK OR SOFTWARE TECHNOLOGY PARK OR INDU STRIAL AREA OR THEME PARK, AS NOTIFIED 30 BY THE BOARD IN ACCORDANCE WITH THE SCHEME FRAMED AND NOTIFIED BY THE CENTRAL GOVERNMENT IN THIS REGARD, IN ANY OF THE NORTH-EASTERN STATES; (B) WHICH HAS BEGUN OR BEGINS TO MANUFACTURE OR PR ODUCE ANY ARTICLE OR THING, SPECIFIED IN THE FOURTEENTH SCHEDULE OR COMM ENCES ANY OPERATION SPECIFIED IN THAT SCHEDULE, OR WHICH MANUFACTURES O R PRODUCES ANY ARTICLE OR THING, SPECIFIED IN THE FOURTEENTH SCHEDULE OR COMM ENCES ANY OPERATION SPECIFIED IN THAT SCHEDULE AND UNDERTAKES SUBSTANTI AL EXPANSION DURING THE PERIOD BEGINNING (I)ON THE 23RD DAY OF DECEMBER, 2002 AND ENDING BE FORE THE 1ST DAY OF APRIL, 31 [2007], IN THE STATE OF SIKKIM; OR 12 (II)ON THE 7TH DAY OF JANUARY, 2003 AND ENDING BEF ORE THE 1ST DAY OF APRIL, 2012, IN THE STATE OF HIMACHAL PRADESH OR THE STATE OF UTTARANCHAL; OR (III)ON THE 24TH DAY OF DECEMBER, 1997 AND ENDING BEFORE THE 1ST DAY OF APRIL, 2007, IN ANY OF THE NORTH-EASTERN STATES. (3) THE DEDUCTION REFERRED TO IN SUB-SECTION (1) SH ALL BE (I) IN THE CASE OF ANY UNDERTAKING OR ENTERPRISE R EFERRED TO IN SUB-CLAUSES (I) AND (III) OF CLAUSE (A) OR SUB-CLAUSES (I) AND (III ) OF CLAUSE (B), OF SUB-SECTION (2), ONE HUNDRED PER CENT OF SUCH PROFITS AND GAINS FOR TEN ASSESSMENT YEARS COMMENCING WITH THE INITIAL ASSESSMENT YEAR; (II) IN THE CASE OF ANY UNDERTAKING OR ENTERPRISE REFERRED TO IN SUB-CLAUSE (II) OF CLAUSE (A) OR SUB-CLAUSE (II) OF CLAUSE (B) , OF SUB-SECTION (2), ONE HUNDRED PER CENT OF SUCH PROFITS AND GAINS FOR FIVE ASSESSMENT YEARS COMMENCING WITH THE INITIAL ASSESSMENT YEAR AND THE REAFTER, TWENTY-FIVE PER CENT (OR THIRTY PER CENT WHERE THE ASSESSEE IS A CO MPANY) OF THE PROFITS AND GAINS. (4) THIS SECTION APPLIES TO ANY UNDERTAKING OR ENTE RPRISE WHICH FULFILS ALL THE FOLLOWING CONDITIONS, NAMELY: (I) IT IS NOT FORMED BY SPLITTING UP, OR THE RECON STRUCTION, OF A BUSINESS ALREADY IN EXISTENCE : PROVIDED THAT THIS CONDITION SHALL NOT APPLY IN RESPECT OF A N UNDERTAKING WHICH IS FORMED AS A RESULT OF THE RE-ESTABLISHMENT , RECONSTRUCTION OR REVIVAL BY THE ASSESSEE OF THE BUSINESS OF ANY SUCH UNDERTA KING AS IS REFERRED TO IN SECTION 33B , IN THE CIRCUMSTANCES AND WITHIN THE PERIOD SPECIF IED IN THAT SECTION; (II) IT IS NOT FORMED BY THE TRANSFER TO A NEW BUS INESS OF MACHINERY OR PLANT PREVIOUSLY USED FOR ANY PURPOSE. EXPLANATION.THE PROVISIONS OF EXPLANATIONS 1 AND 2 TO SUB-SECTION (3) OF SECTION 80-IA SHALL APPLY FOR THE PURPOSES OF CLAUSE (II) OF THI S SUB-SECTION AS THEY APPLY FOR THE PURPOSES OF CLAUSE (II) OF THAT SUB-SECTION. (5) NOTWITHSTANDING ANYTHING CONTAINED IN ANY OTHER PROVISION OF THIS ACT, IN COMPUTING THE TOTAL INCOME OF THE ASSESSEE, NO DEDU CTION SHALL BE ALLOWED UNDER ANY OTHER SECTION CONTAINED IN CHAPTER VIA OR IN SECTION 10A OR SECTION 10B , IN RELATION TO THE PROFITS AND GAINS OF THE UNDER TAKING OR ENTERPRISE. (6) NOTWITHSTANDING ANYTHING CONTAINED IN THIS ACT, NO DEDUCTION SHALL BE ALLOWED TO ANY UNDERTAKING OR ENTERPRISE UNDER THIS SECTION, WHERE THE TOTAL PERIOD OF DEDUCTION INCLUSIVE OF THE PERIOD OF DEDU CTION UNDER THIS SECTION, OR UNDER THE SECOND PROVISO TO SUB-SECTION (4) OF SECTION 80-IB OR UNDER SECTION 10C , AS THE CASE MAY BE, EXCEEDS TEN ASSESSMENT YEARS. (7) THE PROVISIONS CONTAINED IN SUB-SECTION (5) AND SUB-SECTIONS (7) TO (12) OF SECTION 80-IA SHALL, SO FAR AS MAY BE, APPLY TO THE ELIGIBLE UND ERTAKING OR ENTERPRISE UNDER THIS SECTION 32 . (8) FOR THE PURPOSES OF THIS SECTION, (I) INDUSTRIAL AREA MEANS SUCH AREAS, WHICH THE BOARD, MAY, BY NOTIFICATION IN THE OFFICIAL GAZETTE, SPECIFY IN ACCORDANCE WITH THE SCHEME FRAMED AND NOTIFIED BY THE CENTRAL GOVERNMENT; 13 (II) INDUSTRIAL ESTATE MEANS SUCH ESTATES, WHICH THE BOARD, MAY, BY NOTIFICATION IN THE OFFICIAL GAZETTE, SPECIFY IN AC CORDANCE WITH THE SCHEME FRAMED AND NOTIFIED BY THE CENTRAL GOVERNMENT; (III) INDUSTRIAL GROWTH CENTRE MEANS SUCH CENTRE S, WHICH THE BOARD, MAY, BY NOTIFICATION IN THE OFFICIAL GAZETTE, SPECI FY IN ACCORDANCE WITH THE SCHEME FRAMED AND NOTIFIED BY THE CENTRAL GOVERNMEN T; (IV) INDUSTRIAL PARK MEANS SUCH PARKS, WHICH THE BOARD, MAY, BY NOTIFICATION IN THE OFFICIAL GAZETTE, SPECIFY IN AC CORDANCE WITH THE SCHEME FRAMED AND NOTIFIED BY THE CENTRAL GOVERNMENT; (V) INITIAL ASSESSMENT YEAR MEANS THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH THE UNDERTAKING OR THE ENTER PRISE BEGINS TO MANUFACTURE OR PRODUCE ARTICLES OR THINGS, OR COMME NCES OPERATION OR COMPLETES SUBSTANTIAL EXPANSION; (VI) INTEGRATED INFRASTRUCTURE DEVELOPMENT CENTRE MEANS SUCH CENTRES, WHICH THE BOARD, MAY, BY NOTIFICATION IN THE OFFICI AL GAZETTE, SPECIFY IN ACCORDANCE WITH THE SCHEME FRAMED AND NOTIFIED BY T HE CENTRAL GOVERNMENT; (VII) NORTH-EASTERN STATES MEANS THE STATES OF A RUNACHAL PRADESH, ASSAM, MANIPUR, MEGHALAYA, MIZORAM, NAGALAND AND TR IPURA; (VIII) SOFTWARE TECHNOLOGY PARK MEANS ANY PARK S ET UP IN ACCORDANCE WITH THE SOFTWARE TECHNOLOGY PARK SCHEME NOTIFIED B Y THE GOVERNMENT OF INDIA IN THE MINISTRY OF COMMERCE AND INDUSTRY; (IX) SUBSTANTIAL EXPANSION MEANS INCREASE IN THE INVESTMENT IN THE PLANT AND MACHINERY BY AT LEAST FIFTY PER CENT OF THE BOO K VALUE OF PLANT AND MACHINERY (BEFORE TAKING DEPRECIATION IN ANY YEAR), AS ON THE FIRST DAY OF THE PREVIOUS YEAR IN WHICH THE SUBSTANTIAL EXPANSION IS UNDERTAKEN; (X) THEME PARK MEANS SUCH PARKS, WHICH THE BOARD , MAY, BY NOTIFICATION IN THE OFFICIAL GAZETTE, SPECIFY IN AC CORDANCE WITH THE SCHEME FRAMED AND NOTIFIED BY THE CENTRAL GOVERNMENT.] 5. IF THE LANGUAGE USED IN SUB-CLAUSE (III) TO SUB -SECTION (2) TO SECTION 80IB IS KEPT IN JUXTAPOSITION WITH T HE FACTS OF THE PRESENT APPEAL ALONG WITH THE ASSERTION MADE BY THE LEARNED RESPECTIVE COUNSEL, IT DISCUSSES ABOUT DEDUCTION TO ANY INDUSTRIAL UNDERTAKING WHICH MANUFACTURES OR PRODUC ES ANY ARTICLE OR THING AND SUB-SECTION (1) TO SECTION 80I B SPEAKS ABOUT ANY PROFIT AND GAINS DERIVED BY AN UNDERTAK ING OR AN 14 ENTERPRISE FROM ANY BUSINESS MEANING THEREBY THE RE SHOULD BE DIRECT CO-RELATION BETWEEN THE UNDERTAKING AND T HE PRODUCTION. SINCE THE ASSESSEE COMPANY IS ENGAGED IN MANUFACTURING OF DETERGENT BARS AND POWDERS SINCE 1 7 TH JUNE, 1996, CONSEQUENTLY, IT FALLS UNDER THE CATEGORY OF ELIGIBLE BUSINESS WHICH FURTHER FALLS UNDER SUB-SECTION (3) AND THE PROFIT , THEREFORE, THE PROFIT SO EARNED IS ELIGIBLE FOR DE DUCTION U/S 80IB AT THE PRESCRIBED RATE FOR THE RELEVANT PE RIOD. ALMOST IDENTICAL LANGUAGE HAS BEEN USED IN SECTION 80IC WH ICH ALSO SPEAKS ABOUT ANY BUSINESS REFERRED TO IN SUB-SECT ION (2). NOW THE QUESTION ARISES WHETHER SUCH DEDUCTION IS A LLOWABLE TO THE ENTERPRISE WHICH IS DOING JOB WORK. THE OBVIOUS REPLY IS YES BECAUSE WHILE DOING SUCH ACTIVITY FIRSTLY ALL THE INFRASTRUCTURE LIKE PLANT AND MACHINERY IS REQUIRED TO BE USED AND SECONDLY THE END PRODUCT IS DERIVED FROM SUCH UNDERTAKING AND THE END PRODUCT IS ALSO COMMERCIALL Y DISTINCT FROM THE RAW MATERIAL SO USED, THEREFORE, THE INCOM E IS DIRECTLY GENERATED FROM THE ELIGIBLE BUSINESS. 15 6. THE WORD INDUSTRY HAS A WIDE IMPORT. WHERE THERE IS A SYSTEMATIC ACTIVITY ORGANIZED BY A CORPORATION BETW EEN EMPLOYER AND EMPLOYEE (THE DIRECT AND SUBSTANTIAL E LEMENT IS COMMERCIAL) FOR THE PRODUCTION AND/DISTRIBUTION OF GOODS AND SERVICES CALCULATED TO SATISFY HUMAN WANTS AND WISH ES (NOT SPIRITUAL OR RELIGIOUS). THE TRUE FOCUS IS FUNCTION AL AND THE DECISIVE TEST IS THE NATURE OF ACTIVITY, THEREFORE, WE FIND NO INFIRMITY IN THE STAND OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) AND CONFIRM THE SAME. 6. SO FAR AS THE CLAIMED DEDUCTION U/S 80IC OF THE ACT (BADDI UNIT) IS CONCERNED, WE FIND THAT THE RELEVANT CONDI TIONS FULFILLED THE REQUIRED CONDITIONS AS THE ASSESSEE COMPANY IS HAVING ITS OWN MANUFACTURING UNIT AT BADDI AND IS REGISTERED W ITH THE CENTRAL EXCISE. THE ASSESSEE DID JOB WORK FOR HIND USTAN LEVER LIMITED, THEREFORE, FULFILS THE CONDITIONS AS STIPU LATED UNDER SUB-SECTION (2) WHICH FURTHER SPEAKS ABOUT MANUFACT URING OR PRODUCTION OF ANY ARTICLE OR THING. SUB-SECTION (3 ) DEALS WITH THE PERIOD FOR WHICH DEDUCTION IS ALLOWED AND SUB-S ECTION (4) 16 SPEAKS OF CERTAIN OTHER CONDITIONS WHICH ARE ALSO F ULFILLED BY THE ASSESSEE. SINCE THE RAW MATERIAL AND PACKAGING MAT ERIAL IS PROVIDED BY HINDUSTAN LEVER LIMITED AND THE ASSESSE E PRODUCED COMMERCIALLY DISTINCT PRODUCT BY TRANSFORM ING THE RAW MATERIAL INTO A COMMERCIALLY NEW PRODUCT DISTIN CT FROM RAW MATERIAL, CONSEQUENTLY, MANUFACTURING PROCESS IS CO MPLETE WHICH RESULTS INTO A NEW ARTICLE OR A THING. IT DOE S NOT MAKE ANY DIFFERENCE IF SUCH PRODUCE IS MANUFACTURED FOR HIMSELF OR ON JOB BASIS SINCE THE ASSESSEE HAS PUT LABOUR, MAC HINERY, EQUIPMENT AND OTHER INFRA-STRUCTURE, ETC. FOR MANUF ACTURING OF SUCH ARTICLES, CONSEQUENTLY, THE ASSESSEE QUALIFIES THE CONDITIONS WHICH ARE REQUIRED FOR PRODUCTION. THER EFORE, WE FIND NO INFIRMITY IN THE STAND OF THE LEARNED COMMI SSIONER OF INCOME TAX (APPEALS). SINCE VARIOUS CASE LAWS HAVE ALREADY BEEN DELIBERATED UPON IN THE IMPUGNED ORDER BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), THEREFORE, WE ARE REFRAINING OURSELVES IN REPEATING THE SAME, CONSEQU ENTLY, THIS APPEAL OF THE REVENUE IS HAVING NO MERIT, THEREFORE , DISMISSED. 17 6. NOW WE SHALL TAKE UP THE CROSS OBJECTION OF T HE ASSESSEE OBJECTING MAINTENANCE OF DISALLOWANCE OF ENTIRE AMO UNT OF RS.2,33,923/- UNDER SECTIONS 80IB AND 80IC OF THE A CT. THE ASSESSING OFFICER ADDED RS. 2,33,923/- ON ACCOUNT O F PROFIT ON SALE OF MACHINERY. ADMITTEDLY, SALE OF MACHINERY IS NOT A MANUFACTURING ACTIVITY BUT THE ASSESSING OFFICER WA S SUPPOSED TO DISALLOW THE CLAIMED DEDUCTION AT THE RATE OF 30 %. SINCE THE FACTS ARE NOT OOZING OUT FROM THE ASSESSMENT ORDER AS WELL AS FROM THE IMPUGNED ORDER, THEREFORE, THE ASSESSING O FFICER IS DIRECTED TO EXAMINE THE FACTS AND TO DECIDE IN ACCO RDANCE WITH LAW. AT BEST, THE CLAIMED DEDUCTION AT THE RATE OF 30% CANNOT BE ALLOWED BUT AT THE SAME TIME, THE WHOLE AMOUNT C ANNOT BE ADDED, THEREFORE, TO THIS EXTENT, THIS ISSUE IS REM ANDED BACK TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDIC ATION IN ACCORDANCE WITH LAW. FINALLY, THE APPEAL OF THE REVENUE IS DISMISSED AN D THE CROSS OBJECTION OF THE ASSESSEE IS PARTLY ALLOWED F OR STATISTICAL PURPOSES. 18 ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH JUNE, 2011. (R.C. SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 28.6.2011 COPY TO: APPELLANT/RESPONDENT/CIT/CIT(A)/DR/GUARD F ILE