COMMISSIONER OF INCOME TAX AND ORS. Vs. MURUDESHWAR DECOR LTD.

JUDGEMENT

(1.) These three appeals are preferred by the Revenue challenging the order passed by the Tribunal which has held that the various processes and steps taken by the assessee in the job work undertaken by them amounts to manufacture and, therefore, entitled to the benefit under section 80-IA of the Income-tax Act, 1961. The assessee is engaged in job work of decoration of plain glazed ceramic tiles, through process of printing and embossing the designs. The assessee filed the returns of income for the assessment years 2000-01, 2001-02 and 2002-03 claiming deduction under section 80-IA of the Act. The Assessing Officer was of the view that the job work of decoration of glazed ceramic tiles does not amount to manufacturing activity. Therefore, the profits derived therefrom were not eligible for the said deduction. Aggrieved to the said order, the assessee preferred an appeal.

(2.) The Commissioner of Income-tax (Appeals) after taking note of the process undertaken by the assessee and also other documents produced and the decisions relied on and the fact that the goods manufactured by the assessee was excisable to Central excise held that the job work of the assessee is in the nature of manufacturing activity and, therefore, he directed the assessing authority to allow the claim of the assessee under section 80-IA of Act. Aggrieved by the said order, the Revenue preferred an appeal to the Tribunal.

(3.) The Tribunal on reappreciation of the entire material on record held, the various processes and steps taken by the assessee in the job of printing, dyeing, mercerising, bleaching and designing the plain glazed ceramic tiles resulted in change or transformation of material. The said process of job emerges and creates a new and different article having a distinct and different from what was prior to such job work and, therefore, it held, the appellate authority was justified in holding that the job work of the assessee is in the nature of manufacturing activity and, accordingly, entitled to deduction under section 80-IA of the Act. Accordingly, the appeal came to be dismissed. Aggrieved by the said order the Revenue is in appeal.