Subscribe to BCA Journal Know More

December 2011

Deduction u/s.80-IB of Income-tax Act, 1961: A.Y. 2005-06: Assembling of different parts of windmill: Amounts to ‘manufacture’ as well as ‘production’: Assessee entitled to deduction u/s.80-IB.

By K. B. Bhujle, Advocate
Reading Time 1 mins
fiogf49gjkf0d
[CIT v. Chiranjjeevi Wind Energy Ltd., 243 CTR 195 (Mad.)]

The assessee was engaged in procuring different parts and assembling wind mills. For the A.Y. 2005- 06, the Assessing Officer disallowed the assessee’s claim for deduction u/s.80-IB holding that the activity of assembling the parts of the wind mill does not amount to ‘manufacture’ or ‘production’ of any article or thing. The Tribunal allowed the assessee’s claim.

On appeal by the Revenue, the Madras High Court upheld the decision of the Tribunal and held as under: “

(i) The different parts procured by the assessee by themselves cannot be treated as a windmill. Those different parts bear distinctive names and when assembled together, it gets transformed into an ultimate product which is commercially known as ‘windmill’.

(ii) There can, therefore, be no difficulty in holding that such an activity carried on by the assessee would amount to ‘manufacture’ as well as ‘production’ of a thing or article as set out u/s.80-IB(2)(iii). (iii) In such circumstances, the conclusion of the Tribunal in accepting the plea of the assessee cannot be found fault with.”

Download PDF

You May Also Like

E-filing of statutory Forms with ROC.

Deemed dividend: Section 2(22)(e) of Incometax Act, 1961: A.Ys. 1992-93 and 1993-94: Advance on salary received by managing director: Not assessable as deemed dividend.