HLS ASIA LTD Vs. DEPUTY COMMISSIONER OF INCOME TAX
LAWS(IT)-2008-12-3
INCOME TAX APPELLATE TRIBUNAL
Decided on December 24,2008

Appellant
VERSUS
Respondents

JUDGEMENT

C.L. Sethi, J.M. - (1.) THE assessee is in appeal against the order dt. 24th March, 2006 passed by the learned CIT(A) for the asst. yr. 2002-03.
(2.) Ground Nos. 1 to 1.4 are with regard to the assessee's claim of deduction under Section 80-IB of the IT Act, 1961 (the Act). These grounds are as under: 1. That the CIT(A) erred on facts and in law in confirming the order of the AO denying deduction under Section 80-IB of the IT Act, 1961 ('the Act') claimed by the appellant in respect of its eligible wire logging units. 1.1 That the CIT(A) erred on facts and in law in holding that the appellant is not engaged in any manufacturing activity or production of any article or thing but is engaged only in providing services to oil companies. 1.2 That the CIT(A) erred on facts and in law in denying deduction under Section 80-IB of the Act, not following the orders of the Tribunal in the appellant's own case for earlier years on the same facts, against all principles of judicial discipline. 1.3 That the CIT(A) erred on facts and in law in rejecting the application filed by the appellant under r. 46A of the IT Rules, 1962 ('the Rules') in respect of additional evidence filed relating to number of workers engaged by the appellant during the assessment year under appeal. 1.4 That the CIT(A) erred on facts and in law in holding that the value of the machinery previously used and transferred to a unit eligible for deduction under Section 80-IB of the Act is to be taken at market value and not at the WDV for the purpose of Sub-section (2) thereof. The assessee company is in the business of wire line logging and perforation operation. As per the assessee, its operation are primarily to ascertain, for mainly ONGC and OIL, whether any oil/gas is present in well, the depth and quantity thereof, if it could be produced, and to assist in converting the potential well into a production well. The data regarding the substrata is collected by lowering sensors in the well dug by the oil companies which is stated to be pointed on paper. This is stated to be the article or tiling produced. The assessee also does perforation of the commented well at specified depths by the use of its tools.
(3.) IN the return of income, the assessee claimed deduction under Section 80-IB in respect of its two out of six units. The assessee had prepared separate account for six units in respect of operations and computed the profit/loss after apportionment of income and expenditure of head office. The assessee claimed deduction under Section 80-IB in respect of its two units namely unit at Duliyajan and unit at Aggartala. The unit at Aggartala was a new unit during the year under consideration. The total claim under Section 80-IB in respect of two units made by the assessee was to Rs. 99,28,625. IN the course of assessment proceedings, the assessee was asked to justify the claim under Section 80-IB in this assessment year also.;


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