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2017 (8) TMI 562 - AT - Income TaxExemption u/s 10A - reconstruction of the existing unit or new unit - scope of manufacturing - ‘splitting up or reconstruction’ of an existing business for the purpose of section 10A - Assessee is manufacturer and exporter of jewellery - proof of purchases - Held that:- As per the condition of the allotment of plot for establishing the industry at SEZ, Sitapura, Jaipur, the assessee to export the assessee’s products and the unit is to be achieve positive net foreign exchange earner every year. This is evident from terms and conditions No. 6 of RIICO allotment letter, which is placed at page No. 85 of the paper book All the narrations in the bills support the contention of the assessee that the assessee has purchased uncut, unpolished precious and semi precious stones and also unmounted silver and gold jewellery. The assessee has mounted the semi precious and precious stones in the silver and gold jewellery and then polished and made it marketable, then exported the same from the SEZ unit, thus, the revenue’s claim that the assessee was only trading in the goods, is not factually correct. The statements taken by the revenue of two of the suppliers were never confronted to the assessee. No opportunity to cross examine these persons were provided. Further as stated in the above part of the order, the purchase bills of Tulsi Jewellers itself mentioned that the assessee has purchased unmounted, unpolished jewelery. The sales bill also suggest that the assessee has sold cut and polished semi precious stones, gold jewellery setted with diamond and precious stones, silver jewellery beads with diamond and cut and polished semi precious stones. Further there was no carry forward stock from any old firm, the entire input and out coming stock was new, therefore, it cannot be said that this unit was out of the reconstruction of the existing unit. Considering all these factual aspects, the assessee deserves for benefit of Section 10A of the Act. - Decided in favour of assessee.
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