COMMISSIONER OF INCOME TAX Vs. DEEPAK MITTAL

JUDGEMENT

(1.) The Revenue has approached this Court under Section 260A of the Income-tax Act, 1961 (for brevity "the Act") challenging the order dated May 27, 2009, passed by the Income-tax Appellate Tribunal, Amritsar Bench (for brevity "the Tribunal") in I.T.A. No. 340(ASR)/2008 in respect of the assessment year 2003-04. The Tribunal has set aside the order dated August 28, 2003, passed by the Commissioner of Income-tax, Jalandhar (1) by exercising jurisdiction under Section 263 of the Act holding that on the basis of survey report conducted under Section 133A of the Act the assessment completed under Section 143(3) of the Act on November 14, 2005, by the Assessing Officer cannot be set aside by the Commissioner of Income-tax by exercising revisional jurisdiction. In that regard, the Tribunal has placed reliance on the views taken by the Hyderabad Bench in the case of Sri Harishankar Cashew Manufacturing Co. v. ITO,1992 42 ITD 466 and the views of the Amritsar Bench in the case of Jolly Engineers and Contractors Pvt. Ltd. v. ITO, 1982 2 ITD 92 The aforesaid order of the Tribunal had attained finality as it is not pointed out that any appeal was filed or if filed the orders have been reversed. The Tribunal has also adversely commented on the order of the Commissioner of Income-tax because he did not point out that any loss to the Revenue would arise and the order passed by the Assessing Officer is prejudicial to the interest of the Revenue. He has simply asked the Assessing Officer to re-examine the documents produced by the assessee whereas the Assessing Officer himself made detailed enquiry and had come to the conclusion on the basis of the evidence on record. In these circumstances, the Tribunal has opined that the power of revision could not have been exercised.

(2.) The Tribunal has also examined the merits of the issue raised before the Assessing Officer and the Commissioner of Income-tax (Appeals). In an answer to the query given by the assessee it was claimed that he is fully eligible for deduction under Section 80-IB(4) of the Act. He further stated that the definition of small scale industries has been expanded under Section 80-IB(4) of the Act. The question considered by the Assessing Officer was whether it is indulging in manufacturing process or not. The assessee has been engaged in the production or manufacture of article or thing, i.e., components of tractors like differential housing, get box housing and rear cover housing. To the allegation that the assessee was engaged only in job work, the following questionanswer pro forma have been cited:

(3.) The Assessing Officer has given a categorical finding that the assessee is engaged in the process of manufacturing of products and accordingly he has granted concession under Section 80-IB of the Act. The Tribunal has placed reliance on a Judgment of the hon'ble the Supreme Court in the case of Textile Machinery Corporation Ltd. v. CIT, 1977 107 ITR 195. In that case the assessee was engaged in the machining of raw-casting, heat treatment of raw-crank shaft and polishing of raw casting etc. and is therefore it has been held that the assessee is engaged in manufacturing or production of articles. Similar view was taken by the Madras High Court in the case of CIT v. Perfect Liners, 1983 142 ITR 654. The claim of the asses-see has been found to be genuine as the assessee has explained the various processes after the components are received from M/s. Auto Components Indl. Corporation, Baddi (Solan). It shows that after the receipt of components, the first operation undertaken by the assessee-respondent is the vertical machining centre on CNC machine which has been explained as under: