INCOME TAX ACT, 1961

Section 80-IC Section 80-IA

Deduction under section 80-IC - Manufacture or production - Eligible undertaking carrying publishing activity - No printing and binding work

Assessee was engaged in the business of printing and publications of books. The assessee had claimed deduction under section 80-IC. In support of the claim assessee had furnished report in Form 10CCB and on perusal of the said Form, Tax Audit Report and Financial Statement assessee submitted that the activities for publishing the books were in the nature of manufacturing, which were carried on by the assessee on its own and hence, it was eligible for deduction under section 80-IC. However, the AO observed that the assessee did not carry out any printing or binding of books. Hence, no manufacturing activity had actually taken place in the premises of undertaking at Rudrapur and therefore, disallowed the claim of deduction. CIT(A), vide his impugned Order, dated 29-1-2016 has deleted the addition. Held: Assessee filed various documents like purchase bills of paper, lorry receipts, bills of transporter, Form 16 issued by the VAT department for entry of any goods in Uttarakhand to show that paper was transported to Rudrapur and sent back to the printer in Delhi, then printed sheets were sent from Delhi to Rudrapur where books were manufactured which were transported to Delhi. No adverse observation in respect thereof was made by the AO in the remand report. Thus, the suspicion of the AO that no manufacturing activity took place at the eligible undertaking of the assessee was not supported with any evidence and is just a surmise. The claim of the assessee in respect of carrying out publishing activity from the eligible undertaking was found genuine on the basis of relevant evidences placed on record and not refuted by the AO in the remand report and thus, assessee was eligible to deduction under section 80-IC. Hence, the assessee's claim for deduction under section 80-IC was rightly held as fully allowable.

Relied:CIT v. Tata Communication Internet Servicse Ltd. (2012) 251 CTR 290 (Del.) : 2012 TaxPub(DT) 789 (Del-HC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2011-12

INCOME TAX ACT, 1961

Section 40(a)(ia) Section 194H

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