Kwal Pro Exports v. ITO
INCOME TAX ACT, 1961
Deduction under section 10B - Allowability -Manufacture vis-a-vis Job work
Assessee, manufacturer and exporter of iron and wooden items, it claimed deduction under section 10B. AO denied deduction on ground of that assessee had not manufactured or produced any article or thing as per section 10B and only job charges were paid for work done by other manufacturers. It was found that assessee had purchased raw materials and semi-finished goods and articles of like description as that of exported goods on which it carried out machine work and it also fixed artistic parts thereon to give it a commercial look, making it completely distinct in character and use. Held: In pursuant of facts, it could be considered that assessee had undergone activity of manufacture of articles, therefore, exemption under section 10B was allowed.
Income-tax Act, 1961, Section 10B, Circular No. 528, dated 16-12-1988
A.Y. : 2002-03 to 2005-06
Decision: In favour of assessee.
Case Law Analysis:Aspinwall & Co. Ltd. v. CIT [2001] 251 ITR 323 / 118 Taxman 771 (SC); Aditya Mills v. Union of India AIR 1988 SC 2237; CIT v. Darshak Ltd. [2001] 247 ITR 489/ 118 Taxman 863 (Kar.); CIT v. Premier Tobacco Packers (P.) Ltd. [2006] 284 ITR 222 (Mad.); CIT v. Jamal Photo Industries (P.) Ltd. [2006] 285 ITR 209 (Mad.); CIT v. N.C. Budhiraja & Co. [1993] 204 ITR 412 / 70 Taxman 312 (SC); ITO v. Ramsons Organics Ltd. [2009] 28 SOT 57 (Delhi) (URO); Saraswati Sugar Mills v. Haryana State Board [1992] 1 SCC 418 and Arihant Tiles & Marbles (P.) Ltd. v. ITO [2007] 295 ITR 148 / 166 Taxman 274 (Raj.).