DCIT, CIRCLE-1, THANE, THANE vs. M/S ACE PLASTICS, MUMBAI

ITA 947/MUM/2022Status: DisposedITAT Mumbai30 November 2022AY 2011-1214 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the CIT(A) was correct in allowing the deduction even if part of the manufacturing activity was outsourced. The Tribunal affirmed that the assessee remained the manufacturer as long as the outsourced work was done under its control and supervision, and at its risk.

What were the facts?

The assessee claimed deduction under Section 80IB for its plastic manufacturing business. The Assessing Officer disallowed a portion of this deduction, arguing that the assessee got its own goods manufactured at a non-80IB unit and paid significant labour charges to an outside party. The CIT(A) partly deleted the disallowance, and the Revenue appealed.

What were the issues?

Whether deduction under Section 80IB can be denied if a part of the manufacturing activity is carried out by an outside agency under the assessee's control and supervision.

Which sections of the Income-tax Act were involved?

Section 80IB

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Income Tax Appellate Tribunal, MUMBAI BENCH “SMC”, MUMBAI

Before: SHRI KULDIP SINGH

For Appellant: Shri Ajay Singh, A.R
For Respondent: Shri Krishna Kumar, D.R

Per : Kuldip Singh, Judicial Member: The appellant, Dy. Commissioner of Income Tax, Mumbai (hereinafter referred to as ‘the Revenue’) by filing the present appeal, sought to set aside the impugned order dated 23.11.2021 passed by the National Faceless Appeal Centre(NFAC) [Commissioner of Income Tax (Appeals), Delhi] (hereinafter referred to as CIT(A)] qua the assessment year 2011-12 on the grounds inter-alia that :- 2 M/s. ACE Plastics

“1. Whether on the facts and in circumstances of the case and in Law, the Ld. CIT(A) has erred in granting relief of erroneous claim of deduction u/s 80IB

The order continues below.

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