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2021 (6) TMI 818 - AT - Income TaxRevision u/s 263 - disallowance of deduction claimed u/s 10B - HELD THAT:- We notice that there is difference of opinion between the parties on the factual aspects of the claim. While the assessee claims that the granite slabs have been exported after undertaking the activities of sawing, cutting and polishing, the revenue has claimed that the finished granite slabs have been purchased from the market. The revenue’s stand is that the deduction u/s 10B is available only in respect of “manufacture or production” activities. The assessee’s case is that it has produced cut and polished granite slabs. It is also the case of the assessee that the co-ordinate bench of Tribunal has allowed the deduction on the profit realized on export of granite slabs in AY 2006-07 by following the decision rendered by Hon’ble Delhi High Court in the case of CIT Vs. ARR-ESS Exim Pvt Ltd. [2015 (2) TMI 413 - DELHI HIGH COURT] CIT(A), after noticing above said observations of the Tribunal, has discussed various other case laws to buttress the revenue’s view that the deduction u/s 10B is available in respect of manufacture or production activities. Hence the issue has to be examined independently without having resort to the decision rendered by the co-ordinate bench in AY 2006-07. Assessee has furnished the Profit and Loss account which show that the assessee has incurred expenses on extraction and quarrying, purchase of blocks and purchase of finished goods. Assessee has been doing its own processing of raw blocks and has also purchased finished goods. The Hon’ble Supreme Court has held in the case of Arihant Tiles & Marbles P Ltd [2009 (12) TMI 1 - SUPREME COURT] that sawing of marble blocks into slabs and tiles and polishing activities amount to manufacture or production. Hence the assessee should be eligible for deduction u/s 10B in respect of export of granite slabs, which it has subjected to production process. Since the provisions of sec.10B refers to the activity of “manufacture or production”, we are of the view that the assessee shall not be eligible for deduction u/s 10B in respect of profits realised export of purchased finished goods (trading items). The break-up details of the export turnover between export of granites processed by the assessee and export of purchased items are not available on record. Rather, none has examined this aspect. Hence, this aspect requires examination at the end of AO. Accordingly, we set aside the order passed by Ld CIT(A) on this issue and restore this issue to the file of the AO for examining the same afresh. We make it clear that the assessee is eligible for deduction u/s 10B of the Act in respect of profits realized on export of granite slabs, which has been processed by it. It shall not be eligible for deduction in respect of profit realized on export of purchased items, i.e., items which has been exported as it is without undertaking any process of sawing blocks into slabs and tiles and polishing - Appeal of the assessee is treated as allowed for statistical purposes.
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