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[2009] 177 Taxman 240 (AAR)/[2009] 309 ITR 344 (AAR)/[2009] 221 CTR 621 (AAR) [2009] 177 TAXMAN 240 (AAR - NEW DELHI) AUTHORITY FOR ADVANCE RULINGS, NEW DELHI Ramit Kumar Sharma* v. Director of Income-tax, (International Taxation) JUSTICE P.V. REDDI, CHAIRMAN A. SINHA AND RAO RANVIJAY SINGH, MEMBER A.A.R. NO. 778 OF 2008 JANUARY 27, 2009 Section 80IC of the Income-tax Act, 1961 - Deductions - Special provisions in respect of certain undertakings or enterprises in certain special category States - Applicant intends to start a 100 per cent ancillary unit to a tractor manufacturing industry in State of Himachal Pradesh - According to applicant, its primary job will be to provide milling, tooling and grinding of surface of rear cover and differential housing, which are important parts of a tractor - Said processing is to be done through requisite technology, such as Special Purpose Machines (SPM), special jigs, jags and tools and pursuant to said processing, a new product/article called 'machined casting' will be manufactured which fits compatibly into a tractor - Whether on facts, applicant's enterprise can be said to have undertaken business activities which will amount to manufacture or production of an article different from raw castings - Held, yes - Whether, therefore, applicant would be eligible for deduction under section 80-IC - Held, yes FACTS The applicant intends to start a 100 per cent ancillary unit to a tractor manufacturing industry in the State of Himachal Pradesh during the financial year 2008-09. The proposed business establishment will be covered as a small-scale industrial unit in the status of a proprietary concern. The applicant's primary job will be to provide milling, tooling and grinding of the surface of rear cover and differential housing, which are important parts of a tractor. These raw castings are to be provided by the principal and they will be processed by the applicant within the specified parameters given by the principal. The processing is to be done through requisite technology, such as Special Purpose Machines (SPM), special jigs, jags and tools. The applicant avers that pursuant to such processing, a new product/article…

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