Commissioner of Income Tax vs. Jackson Engineers Ltd.

ITA-251/2008HC Delhi2009:DHC:567223 December 200918 pages
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What did the High Court hold?

The High Court held that assembling diesel generating sets constitutes manufacturing activity. However, forfeited customer advances and interest income were not eligible for deduction under Section 80IA as they were not derived from the manufacturing activity.

What were the facts?

The assessee assembled diesel generating sets and claimed deduction under Section 80IA. The Assessing Officer disallowed it, stating assembly is not manufacturing. The assessee also claimed deduction on interest and forfeited customer advances.

What were the issues?

Whether assembling gensets qualifies as manufacturing for Section 80IA deduction, and if incidental income like interest and forfeited advances are eligible for such deduction.

Which sections of the Income-tax Act were involved?

Section 80IA

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IN THE HIGH COURT OF DELHI AT NEW DELHI ITA No. 251 of 2008 Reserved on: 25th November, 2009 %

Pronounced on : 23rd December, 2009

Commissioner of Income Tax

. . . Appellant

through : Mr. N.P. Sahini, Advocate.

VERSUS

Jackson Engineers Ltd.

. . .Respondent

through: Mr. Kanan Kapoor, Advocate.

CORAM :-

THE HON’BLE MR. JUSTICE A.K. SIKRI

THE HON’BLE MR. JUSTICE SIDDHARTH MRIDUL

1.

Whether Reporters of Local newspapers may be allowed to see the Judgment?

2.

To be referred to the Reporter or not?

3.

Whether the Judgment should be reported in the Digest?

A.K. SIKRI, J.

1.

This appeal was heard on the following two questions of law:

“i) Whether on the facts of the present case, the Tribunal was justified in law in allowing deduction

under Section 80IA of the Act in disregard of the fact that the activity carried on by the assessee did

not qualify as “manufacturing activity” for the purpose of under Section 80IA?”

ii) Whether on the facts and in the circumstances of the case, the Tribunal was justified in law in holding

that the in

The order continues below.

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