TMI Blog2013 (12) TMI 715X X X X Extracts X X X X X X X X Extracts X X X X ..... Rajendra, A. M. Challenging the order dated 20. 06. 2011of the CIT(A) -27, Mumbai assessee-firm has filed below mentioned grounds of appeal: 1)In law and on the facts in the circumstances of the appellant's case, the Hon'ble C. LT. (A) erred in arbitrarily, following the decisions of Hon'ble Supreme Court in case of CIT vs. Gem India Manufacturing (2001) 249 ITR 307, a decision arrived at in absence of certain basic facts brought to their Lordships, (on which reliance was heavily placed by the Ld. Assessing Officer framing the assessment order), and ignoring subsequent decisions of the Apex Court as also the definition of the term "Manufacture" in Section 2(298A), without appreciating the facts of the appellant's case. Thus, the order confirming the non allowability of depreciation, must be annulled. 2)In law and on the facts in the circumstances of the appellant's case, the Hon'ble C. LT. (A) failed to appreciate the principles laid down in various decisions, relied upon by the appellant firm and also to distinguish the same. The Hon'ble C. l. T. (A), grossly failed to give appropriate consideration to the intention of legislation in defining the term "manufacture", whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eme Court in case of Empee Poly Yarn P. Ltd, Oracle Soft ware India Limited, and Arihant Tiles Marbles Pvt. Ltd. He argued that activity undertaken by the assessee was manufacturing. After considering the submissions of the assessee, he held that whether cutting and polishing of diamonds amounted to manufacturing/production was not decided by the Hon'ble Supreme Court in the cases of that issue was covered by a direct decision of the Hon'ble Apex Court. Accordingly, he decided the appeal against the assessee. 4. Before us, AR submitted that in the case of Sheetal Diamonds Limited, (ITA No. 6687-6689/ Mum/2003, assessment years 1996-97, 1997-98 1998-99) 'J' Bench of Mumbai Tribunal has decided the issue in favour of the assessee by holding that cutting and polishing of diamonds had to be considered manufacturing, that in the case of Parmes Diamond Exports Pvt. Ltd. (ITA No. 1073-1075/Mum/2009- A. Ys. 1998-99, 1999-2000 2000-01 dated 25. 01. 2012) 'C' Bench of Mumbai Tribunal has followed order of Sheetal Diamonds Limited, that the issued was covered in favour of the assessee. Departmental Representative (DR) supported the order of AO and FAA. 5. We have heard the rival submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... partment challenged the order of the Hon'ble Bombay High Court before the Hon'ble Supreme Court. Deciding the appeal in favour of the Revenue Hon'ble Court held as under : Section 80-I gives a deduction in respect of profits and gains from industrial under -takings which, among other conditions, manufacture or produce any article or thing. The question, therefore, is whether the assessee, in cutting and polishing diamonds manufactures or produces any article or thing. The Tribunal took the view that it did because in common parlance and commercial sense raw diamonds are not the same thing as polished and cut diamonds. The two are different entities in the commercial world. Though the chemical composition remains the same the physical charac- teristics of shape and class, etc. , are substantially different. It would appear that no material had been placed on the record before the Tribunal upon which it could have reached the conclusions that, either in common or in commercial parlance, raw diamonds were not the same thing as polished and cut diamonds, and that they were different entities in the commercial world. An ipse dixit of the Tribunal is not the best foundation for a dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "whether conversion of marble blocks by sawing into slabs and tiles and polishing amounts to manufacture or production of article or thing, so as to make the respondent(s)-assessee(s) entitled to the benefit of section 80-IA of the Act as it stood at the material time. " While deciding the appeal Hon'ble Court took notice of the fact that the assessee(s) has been consistently regarded as a manufacturer/producer by various Government Departments and Agencies and processes undertaken by the respondent(s) have been treated as manufacture under the Excise Act and allied tax laws. "At the outset, we may point out that in the present case, we are not only concerned with the word manufacture, but we are also concerned with the connotation of the word production in section 80-IA of the Act which, as stated hereinabove, has a wider meaning as compared to the word manufacture. Further, when one refers to the word production, it means manufacture plus something in addition thereto. The word production was not under consideration before this court in the case of Aman Marble Industries P. Ltd. [2003] 157 ELT 393 (SC). Be that as it may, in that case, it was held that cutting of marble blo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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