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2020 (10) TMI 426 - MADRAS HIGH COURTDeduction u/s 10AA - CIT(A) concluded that the process done by the assessee would qualify as 'manufacture', under the SEZ Act - Tribunal following that the activity of the assessee of purchasing illuminate and removing dust from it and selling the dust removed illuminate amounts to 'manufacture', when Clause(r) of Section 2 of the special Ezonomic Zones Act, 2005 defines 'manufacture' otherwise and that the assessee is eligible for deduction under Section 10AA - HELD THAT:- Semi finished material purchased by the assessee is not marketable and usable in the industry, as what is purchased by the assessee includes silicon, sand and waste, which cannot be marketed as such, unless the waste materials are removed. The flow chart, which was produced by the assessee before the AO was referred to CIT(A) and he came to the conclusion that the Assessing Officer was himself mislead by the nomenclature used in the Gate Pass. Revenue carried the matter by way of appeal to the tribunal and the tribunal once again re-appreciated the factual position and found that there is a process of 'manufacture' as defined under the SEZ Act, which takes place in the SEZ unit and also pointed out that the AO himself has accepted that the assessee's unit, processed the raw materials by removing 10 to 20% impurities. Cost comparison of the semi finished product with that of the raw material was also referred to and it was also pointed out that the Assessing Officer could not establish that the assessee has suppressed the purchase cost of semi-finished goods in order to claim higher deduction under Section 10AA of the Act. Certificate issued by the Assistant Development Officer was accepted on the ground that the revenue could not prove the same to be not genuine. Tribunal sustained the factual finding recorded by the CIT(A). Entire factual matrix has not only been analyzed by the CIT(A), but, also by the tribunal. Substantial Question of Law is answered against the Revenue.
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