1 itxa1041-10 sas IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.1041 OF 2010 The Commissioner of Income Tax-III, Pune ..Appellant. V/s. Hindustan Feeds Mfg. Co. ..Respondent. Mr. Vimal Gupta for the appellant. Mr. S.N. Inamdar, senior Advocate with Mihir Naniwadekar for the respondent. CORAM : J.P. DEVADHAR AND K.K. TATED, JJ. DATED : 11TH OCTOBER, 2011 P.C. :- 1. Whether the ITAT was justified in setting aside the order passed by the CIT under Section 263 of the Income Tax Act, 1961, is the question raised in this appeal. 2. The assessment year involved herein is AY 2003-04. 3. The assessee is engaged in the production of cattle feed. In the assessment year in question, the assessee claimed deduction 2 itxa1041-10 under Section 80IB of the Income Tax Act, 1961 ('the Act' for short) in respect of Unit I and II and also in respect of newly established Unit III situate at Block No. L-4 and L-6. The assessing officer allowed the claim of the assessee in respect of the unit No. III situate at Block No. L-4 and L-6 by recording a finding that the assessee has furnished necessary unit-wise details for the purpose of availing deduction under Section 80IB of the Act. 4. The CIT was of the opinion that the assessing officer has not considered the issue as to whether the unit No. III was formed by splitting and reconstructing of the existing units and that the assessing officer has not considered the issue as to whether the activity carried out by the assessee in the third unit constitutes manufacturing activity or not. Accordingly, the CIT invoked jurisdiction under Section 263 of the Act and directed the assessing officer to pass fresh assessment order after taking into consideration the aforesaid issues. 5. On appeal filed by the assessee, the ITAT by the impugned order dated 30/6/2009 set aside order passed by the CIT under Section 263 of the Income Tax Act. Challenging the aforesaid order, the revenue has filed the present appeal. 6. Perusal of the order passed by the ITAT, particularly para 4 3 itxa1041-10 thereof shows that the ITAT has held on the basis of the material on record that the Unit No. III situate at Block No. L-4 and L-6 was an independent unit newly established, having production capacity three times more i.e. 150 tonnes than the existing units. Moreover, in this appeal, the assessee has also filed an affidavit stating on oath that the assessee has purchased various new machineries for the newly established unit No. III wherein production of cattle feed activity was carried out. The assessee has also given a list of the machineries purchased by it. Therefore, the decision of the ITAT that the unit No. III was not formed by splitting or reconstruction of the existing units cannot be faulted. 7. The Tribunal has further recorded that the activity carried out by the assessee in unit No. III is also carried out in the other two units, wherein it has been held that the production of cattle feed amounts to manufacture and the revenue has accepted that decision in the case of other two units. 8. In these circumstances, in our opinion, the decision of the ITAT is based on finding of fact and no question of law arises out of the said order. The appeal is accordingly dismissed with no order as to costs. (K.K. TATED, J.) (J.P. DEVADHAR, J.)