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2020 (12) TMI 677 - HC - Income TaxDeduction u/s 10B - activity the Assessee undertakes amount to manufacturing or processing to entail it to the benefit or not? - denial of deduction as Assessee does not carry on any ‘manufacturing’ of iron ore - CIT (A) reversed the AO's finding - Tribunal has held that the Assessee has purchased ROM- that is, material extracted from mine on “as is where is” basis-and that ROM included a lot of impurities such as mad, silica, sulphur, limestone, and so on - HELD THAT:- As rightly, held that ROM is crude ore, practically of no use unless it is processed and made suitable for steel making industry. Describing the manufacturing process undertaken by the Assessee, the Tribunal has held that in the iron ore production, the ROM is a raw material in a very crude form. When extracted, ROM contains a lot of waste material called 'impurities'. According to the Tribunal, very low-grade iron ore cannot be used in metallurgical plants, for it needs to be upgraded to increase the iron content. In the Assessee's case, iron ore concentrates are manufactured by the process of magnetic separation. For this purpose, the Assessee uses High-Intensity Magnetic Separator, which increases the iron content through concentration. Eventually, the assessee ‘manufactures’ Iron Ore Concentrate Fines, by upgrading the iron content to around 58%. Assessee purchases ROM, which includes a lot of impurities; it is crude ore, practically of no use unless it is processed and made suitable for its intended end-use. True, very low-grade iron ore cannot be used in metallurgical plants, for it needs to be upgraded to increase the iron content. In the Assessee's case, iron ore concentrates are manufactured by the process of magnetic separation. It essentially amounts to ‘manufactures’ or ‘process’. Therefore, we find no reason to interfere with the Tribunal's findings on this sole substantial question of law. - Decided in favour of assessee.
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