Law:

Section:

Section 80-IB of the Income-tax Act, 1961 - Deductions - Profits and gains from industrial undertakings other than infrastructure development undertakings - Assessment year 2005-06 - Assessee procured different parts and assembled wind mill - It claimed deduction under section 80-IB - Department denied said deduction on ground that activity of assessee would not amount to either 'manufacture' or 'production' of any article or thing, as spelt out in section 80-IB(2)(iii) - Whether different parts procured by assessee by themselves could not be treated as a wind mill - Held, yes - Whether since those parts bore distinctive names and when assembled together, it got transformed into an ultimate product which was commercially known as a 'wind mill', such an activity carried on by assessee would amount to 'manufacture' as well as 'production' of a thing or article as set out in section 80-IB(2)(iii) - Held, yes - Whether, therefore, assessee-company was eligible for deduction under section 80-IB - Held, yes FACTS The assessee was engaged in the activity of processing different parts for assembling wind mills. It claimed deduction under section 80-IB. The revenue denied the claim of the assessee on the grounds that the assessee merely procured the different parts of the wind mills and assembled same, it would not amount to either 'manufacture' or 'production' of any article or thing, as spelt out in section 80-IB(2)(iii ). The Tribunal rejected the plea of the revenue. On revenue's appeal : HELD The different parts procured by the assessee by themselves could not be treated as a wind mill. Those different parts bear distinctive names and when assembled together, that got transformed into an ultimate product which was commercially known as 'wind mill'. There was no difficulty in holding that such an activity carried on by the assessee would amount to 'manufacture' as well as 'production' of a thing or article as set out in section 80-IB(2)(iii). The conclusion of the Tribunal in accepting the plea of the assessee could not be found fault with. No substantial question of law, found to entertain instant appeal. [Para 6] The appeal was to be dismissed. [Para 7] CASES…

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