INCOME TAX ACT, 1961

Section 80-IA

Deduction under section 80-IA - Eligibility for deduction under section 80-IA - Deduction under section 80-IA in respect of profits derived from its new industrial undertaking of manufacturing surface coating systems -

Assessee was engaged in manufacturing activity and claimed deduction under section 80-IA which was disallowed by AO on the ground that according to his analysis, most of manufacturing works were outsourced by assessee and that therefore, criteria for claiming deduction under section 80-IA was not fulfilled by assessee. CIT(A) though rejected the claim of deduction under section 80-IA but on different premises that there was neither fresh manufacturing unit of assessee nor any different products were manufactured by assessee. CIT(A) was of opinion that surface coating system is nothing but providing spray painting equipments at the site of assessee with additional accessories and it was only minor modifications of existing product. Held: CIT(A) had not dealt with the manufacturing processes/details and it was also not apparent from his order as to how he had come to a conclusion that surface coating systems is nothing but providing spray painting equipments at the site of the assessee with additional accessories and it is only minor modification of the existing product. On careful perusal of CIT(A)'s order, he had not passed a speaking order nor had reasons backing his order which was not apparent from his order. Therefore, matter was remanded back to CIT(A) for necessary adjudication as per law after following principles of natural justice.

REFERRED :

FAVOUR : In assessee's favour (by way of remand)

A.Y. :

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