TMI Blog2022 (6) TMI 1162X X X X Extracts X X X X X X X X Extracts X X X X ..... Income. The payment of the self-assessment tax does not raise any doubt on the intention of the assessee merely on the reasoning that the assessee has claimed refund in the income tax return. As such the assessee during the assessment proceedings has come forward and filed the revised return of income declaring income under the provisions of AMT under section 115JC of the Act. Furthermore, the assessee cannot be deprived from the benefit granted under the statute merely on the reasoning that the assessee failed to claim the same in the income tax return. It is incumbent upon the revenue to allow the alleged claimed of deduction for which the assessee is entitled under the provisions of law. As it is an admitted position that the form 56F is applicable for claiming the deduction under section 10A of the Act. However, we find that at that point of time when the assessee was claiming the exemption under section 10AA of the Act, there was no form prescribed by the CBDT. Thus in the absence of any specific form prescribed by the CBDT, the assessee has opted to use form 56F for claiming the exemption. To our understanding, it was an inadvertent mistake and therefore the assessee c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 61 (here-in-after referred to as the Act ) relevant to the Assessment Year 2013-14. 2. The Revenue has raised the following grounds of appeal: 1. On the facts and circumstances of the case and in law, the Ld.CIT(A)-3, Rajkot has erred in deleting the disallowance of deduction/exemption u/s.10AA of the I.T. Act, 1961 without appreciating the facts of the case. 2. On the facts of the case and in law, the Ld.CIT(A)-3, Rajkot ought to have upheld the assessment order of the A.O. 3. It is, therefore, prayed that the order of the CIT(A) may be set aside and that of the AO be restored to the above extent. 3. The only issue raised by the Revenue is that the learned CIT-A erred in granting the exemption under section 10AA of the Act to the assessee which was denied by the AO during the assessment proceedings on account of various reasons. 4. The facts in brief are that the assessee in the present case is a partnership firm and engaged in the business of manufacturing and export of Gold Diamond studded ornaments. The assessee came into existence with effect from 10th October, 2010. The factory of the assessee was located in SEZ Sachin, Surat and the approval/Letter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act either in the original return of income or in the revised return of income. According to the AO, the assessee has originally claimed deduction/exemption under section 10A of the Act which was debarred to the newly undertaking/establishment w.e.f. 01st April, 2012. 4.5 The AO further noted that the assessee had not claimed the deduction/exemption under section 10AA of the Act as well as has not filed the statutory form prescribed to claim the deduction u/s 10AA of the Act with the return of income. Therefore, it will not be eligible to claim the deduction u/s 10AA of the Act in pursuance to the provisions of section 80A(5) of the Act. 4.6 The AO on perusal of the ITR Form-5 of AY 2015-16 observed that the assessee for the AY 2015-16 had claimed the deduction amounting to Rs. 5,68,63,487/- u/s 10A as well as u/s 10AA and claimed refund of Rs. 1,05,00,000/- paid as advance tax. 4.7 The assessee has also not selected/specified the date in ITR form where it has been asked that if liable to furnish the audit report u/s 115JC of the Act mentioned the date of furnishing the audit report . Therefore the contention of the assessee that the calculation of tax under the provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sideration i.e. 15th March, 2013 and 28th March, 2013 and purchased of melavani in the month of March, 2013. As such there was no opening stock of both the items. The assessee out of the purchases of the gold bar has shown consumption of 3709.546 gms which is not possible without having the basic tools of manufacturing. iv. The assessee had made Purchases of cut and uncut polished diamonds weighing 4618.510 carat and 765.241 carat valued at Rs. 1,56,52,085/- and Rs. 10,15,627/- respectively. The assessee out of those cut and uncut polished diamonds used 3051.770 carat and 721.240 respectively. The assessee had purchase the uncut polished diamonds in small quantity comparatively from cut polished diamonds. As such uncut polished diamonds is subject to further processing however such processing activity is not covered under the manufacturing activity. In addition, the further process like cutting and polishing such uncut diamonds require special blades, laser equipment and 3D computer analyzing whilst the assessee had no such type of tool which proves that it engaged in the processing activities. v. The conditions as specified under section 10AA of the Act that the manufacturin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gly, paid the tax computed under the provisions of AMT i.e. under section 115JC of the Act. 5.1 The assessee also contended that the claim of the assessee under section 10AA of the Act was disallowed by the AO without issuing any show cause notice which is against the principle of justice. 5.2 The assessee further in support of the claim submitted that it is engaged in the manufacturing activity and eligible to claim the deduction u/s 10AA of the Act based on the following details as given hereunder: a- It has established the unit in SEZ with the object to manufacturing the jewellery and started the manufacturing activity from 25th, February, 2012. b- The unit was approved by the Commissioner of SEZ as manufacturer of gold jewellery. Likewise, the assessee in the VAT registration was categorized as the manufacturer of the gold ornaments Studded jewellery manufacturing unit. There was no doubt raised either by the commissioner of SEZ/GVAT authorities with respect to the manufacturing activities carried out by the assessee. c- It has entered into an agreement on stamp paper of Rs. 100/- with its sister concern namely Chokshi Vachhraj Makanji Company to purchase the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the fact that the assessee is carrying out the manufacturing activity. 6. The learned CIT-A after considering the submission of the assessee has directed the AO to allow the claim under section 10AA of the Act by observing as under: i- That the assessee had started its manufacturing operation from 25th February, 2012 and the FY 2012-13 was the first operational year. ii- As the claim of deduction in pursuance to the provisions of section 10A stands to be disallowed automatically after 01st April, 2012, therefore, no one can claim the deduction u/s 10A deliberately in its return of income. iii- The assessee was not required to pay the taxes, had it been intending to claim the deduction u/s 10A of the Income Tax Act. iv- The assessee cannot be deprived to enjoy the beneficial section merely it makes some technical error during the filing of the return of income. v- The assessee can also not to be refrained to claim the deduction u/s 10AA of the Act, merely failed to furnish the report in Form-56F/29C along with return of income. Furnishing of the said form along with return of income is merely directory in nature and used to test the allowability of claim made und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing that the assessee has claimed refund in the income tax return. As such the assessee during the assessment proceedings has come forward and filed the revised return of income declaring income under the provisions of AMT under section 115JC of the Act. Furthermore, the assessee cannot be deprived from the benefit granted under the statute merely on the reasoning that the assessee failed to claim the same in the income tax return. It is incumbent upon the revenue to allow the alleged claimed of deduction for which the assessee is entitled under the provisions of law. 11.2 It is an admitted position that the form 56F is applicable for claiming the deduction under section 10A of the Act. However, we find that at that point of time when the assessee was claiming the exemption under section 10AA of the Act, there was no form prescribed by the CBDT. Thus in the absence of any specific form prescribed by the CBDT, the assessee has opted to use form 56F for claiming the exemption. To our understanding, it was an inadvertent mistake and therefore the assessee cannot be deprived from the benefit available under the provisions of law. 11.3 Furthermore, the assessee has made the claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely because a typographical error crept in while e-filing the return and it was mentioned as under section 80-IB instead of section 10B, this being a technical mistake, should not come in the way by disallowing the otherwise allowable/eligible exemption. [Para 18] Accordingly, there is no infirmity or perversity in the order of the Tribunal so as to call for any interference of the High Court. It is essentially a concurrent finding of fact by the two lower appellate authorities and no substantial question arise or is required to be considered. [Para 19] 11.5 Thus in light of the decision held by the Hon ble Rajasthan High Court we are of the view that the assessee is entitled to benefit u/s 10AA of the Act though it wrongly claim the deduction u/s 10A of the Act at the time of filing the return of Income. 11.6 Another issue came before us is that whether the assessee is engaged in the manufacturing activity or not. As such to claim the deduction u/s 10AA of the Act one of the prerequisite condition is that the assessee manufactures goods/produce article or things. Regarding this we referred the cl. (iii) of Explanation 1 to the provisions of section 10AA of the Act whi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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