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The AO himself has admitted that the appellant is entitled for deduction u/s 80IB. When the process like stitching is an integral part of the whole chain of manufacture process, the whole process has to be considered as manufacturing process eligible for deduction u/s 80IB.

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Sec. 80IB of Income Tax Act, 1961— Deduction— Section 80IB is with regard to deduction of profits and gains from certain industrial undertakings and in the case of assessee, the job work / process of outsourcing is nothing but stitching of footwear and is done under the direct supervision of the assessee and it is an integral part of the whole process of manufacture of footwear undertaken by the assessee and the A.O. while completing the reassessment, admits that the assessee is eligible for deduction, but granted proportionate deduction by excluding job work estimated at 25% of the gross total income and the assessee has satisfied all the conditions for claiming deduction u/s 80IB and proportionate disallowance of job work for the purpose of computing deduction u/s 80IB is unwarranted and uncalled for, therefore, the CIT(A) was correct in directing the A.O. to grant deduction u/s 80IB as claimed by the assessee - ASSTT. CIT V/s VEEKESY POLYMERS PVT. LTD. - [2020] 27 ITCD Online 013 (ITAT-COCHIN)