TMI Blog2005 (7) TMI 607X X X X Extracts X X X X X X X X Extracts X X X X ..... that unit merely assemble or process goods for exports would also get the benefit of the tax holidays. We find that the observation of the Assessing Officer that the assessee-company was not involved in manufacturing process to enable it to claim deduction u/s 10A was not correct as the above Circular of Board, Ministry of Finance, decision of Metro Readywear Co. [ 1976 (7) TMI 62 - HIGH COURT OF KERALA AT ERNAKULAM] and the licence granted by the Development Commissioner clearly indicate that the above stitching of buttons, ironing, labelling, etc. done by the assessee on the garments received by it from M/s. Arihant Garments was to be reckoned as manufacturing process against which the claim u/s 10A was justifiable and, hence, the ld. CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the perusal of details filed by the assessee it was event that the assessee was purchasing almost all the garments exported by it from M/s. Arihant Garments. It was further observed that in the purchase contract note as well as invoices sent by M/s. Arihant Garments, the goods were described as readymade garments. The Assessing Officer thereafter carried out a survey under section 133A at the premises of the assessee as well as M/s. Arihant Garments. During the course of the survey at the assessee s premises, statement of Shri A.K. Jha, Export Executive was recorded and in response to a question he stated that the garments manufactured in their Company were fully finished garments but the garments purchased from M/s. Arihant Garments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rocess of manufacturing in the form of designing, cutting, stitching, etc. and hence the assessee was not eligible for exemption under section 10A, and accordingly denied the claim of the assessee under section 10A. 3. In appeal before the ld. CIT(A) the assessee reiterated its submission made before the Assessing Officer and submitted that the garments supplied by M/s. Arihant Garments may have been finished products in the hands of M/s. Arihant Garments but were semi-finished goods for the assessee which had to put it through the processes of making it ready for export such as buttoning, ironing, fixing laces and lables and packing etc. It was further pointed out by the assessee that Department Commissioner (DC) appointed in the EPZ at Fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial or semi-finished goods for the assessee. Further, one must take into account the basic purpose of granting exemption under section 10A. To my mind, the basic purpose is to encourage exports so that foreign exchange is earned. As already mentioned the goods were exported and the proceeds were brought into the country in convertible foreign exchange. I am, therefore, of the opinion that the assessee fulfilled the conditions of section 10A and qualifies for exemption. I, therefore, direct that exemption is to be granted and the appeal is allowed . 5. The revenue is aggrieved with such order of ld. CIT(A) and has come in appeal before us. 6. In appeal before us, the ld. Departmental Representative for the revenue could not controvert the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll reasoned order after considering all the aspects involved in this case, such order of ld. CIT(A) be upheld. 8. We have given our careful consideration to the rival submissions made before us and have perused the orders of tax authorities. We have also considered the paper book filed by the assessee and the decisions cited before us. The Assessing Officer in this case has disallowed the claim of the assessee under section 10A presuming that the assessee is not involved in the manufacturing process as it was only doing labelling around and packing of the finished readymade garments purchased from M/s. Arihant Garments whereas the ld. CIT(A) has allowed the claim of the assessee considering the licence granted to the assessee-company by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1987 relied by the assessee (which is also available at page 26 of the paper book) also says that unit merely assemble or process goods for exports would also get the benefit of the tax holidays. 10. Apart from above Circular of Central Excise and Income-tax, renewal licence granted by the Development Commissioner of such EPZ to the assessee (available at pages 28 29 of the paper book) clearly suggest that the assessee was fulfilling all the terms and conditions of such EPZ to enable it to have its licence renewed. 11. We, therefore, in view of the above facts and circumstances of the case find that the observation of the Assessing Officer that the assessee-company was not involved in manufacturing process to enable it to claim deduction un ..... X X X X Extracts X X X X X X X X Extracts X X X X
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