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TMI Blog2005 (7) TMI 607X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee fulfilled the conditions of section 10A of the Act, without appreciating the facts of the case". 2. Brief facts of the case are that the assessee-company is engaged in the manufacture and export of readymade garments and the manufacturing unit of the assessee is situated in Falta Export Processing Zone, West Bengal. All the exports were made through Falta and the profits of the export were claimed to be exempt under section 10A of the Act. The Assessing Officer during the course of assessment proceedings observed that 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 not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pi Advertising Ltd. [2003] 263 ITR 479 and on the CBDT Circulars No. 495 dated 22-9-1987 and No. 694 dated 23-11-1994 wherein it was mentioned that where a unit was in a free trade zone and was engaged in assembling or processing of goods for export and was earning foreign exchange, it would qualify for relief under section 10A. The Assessing Officer, however, not satisfied with the above contention of the assessee, observed that the assessee was only fixing buttons and ironing of such garments and was not involved in any process 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. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore, qualifies for exemption and observed as under:- "After taking into account the above facts, I am of the opinion that part of the manufacturing process was carried out at the assessee's premises in the EPZ. It is difficult to determine as to at what stage a product is completely finished and needs to undergo no other process before being sold to the consumer. In this case, I am inclined to agree with the ld. A.R.'s contention that what may have been finished goods in the hands of the supplier, was in fact, raw material 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 exchan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relied upon by the assessee before the ld. CIT(A). The ld. counsel further contended that even Development Commissioner of EPZ has not found that the assessee has not followed the terms and conditions and, therefore, has renewed the licence granted to the assessee from time to time. Ld. counsel submitted that all such Circulars, Instruction of Board and grant of licence by Development Commissioner are available in the paper book filed by him. It was, therefore, contended by the ld. counsel that since the ld. CIT(A) has passed a well 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was held that even the process of ironing with the aid of power for making a garment marketable amounted to manufacture. Apart from the above decision, we also find that the Circulars by Ministry of Finance relied by the assessee (as also available at page No. 27 of the paper book filed before us) clearly strengthen the contention of the assessee as vide the above Circular No. 314/20/97-CX dated 6-5-1997. It has been clarified that even galvanizing of black MS Pipes tantamount to manufacturing activity. CBDT Circular 495 dated 22-9-1987 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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