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TMI Blog2014 (3) TMI 108X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 10A of the Act? 2. Whether the ITAT while deleting the additions, was correct in law and on facts in upholding the finding of CIT (A) that the job work done by the assessee on behalf of foreign company would fall under the ambit of export as envisaged under Section 10A of the Income Tax Act, 1961? 3. Whether the ITA/CIT (A) were correct in law and on facts in ignoring the specific provisions of Section 10A (2) and accepting the claim of the assessee in the absence of any evidence produced in respect of acquisition of any new machinery, tools or equipment for manufacture/production of jewellery? 4. Whether the ITAT has erred in law and on facts in allowing the expenses in respect of the design and fabrication disallowed by the AO for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ITAT confirmed the order. 5. During the pendency of these appeals, the first question, i.e., as to whether the process of jewellery making through job work in the manner undertaken by the appellant amounts to manufacturing for the purpose of Section 10A was examined by this Court in another appeal. The Court then held that the said activity amounts to manufacturing in CIT v. Lovlesh Jain 2012 (204) Taxman 134 (Del). Following the said judgment, the first and second questions in ITA 775/209 and 1025/2010 and the sole question in ITA 53/2013 are answered in favour of the assessee and against the Revenue. 6. Regarding question no.3 (common to the ITA 775/2009 and 1025/2010), the assessee had in the present case in the assessment years 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use (b) of Rule 46A (1) of the Income Tax Rules, 1962. In view of the above, the evidence now filed is admitted under clause (b) of Rule 46A of the Income-Tax Rules, 1962." 7. This Court notices that the Assessing Officer had queried the appellant as to whether transfer of any old machinery had taken place at the time of setting up of unit and he made an adverse comment in respect of non-production of such materials. 8. Counsel for the appellant/revenue argued that the CIT (A) and ITAT fell into error in accepting the materials placed in the first instance in the appellate proceedings. We are of the opinion that as to whether the machinery was new or not was an aspect which the CIT (A) was within its rights to enquire into; he did so by i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmissions establishes that the assessee did not itself carry out any processing and manufacturing activity who left it to some contractors and the question of its being entitled to the benefit of Section 10A did not arise. 10. We notice that the question formulated is limited to the findings of the CIT (A) and the Tribunal with respect to the setting aside of the disallowance. The ground of appeal urged before the Tribunal did not disclose that the Revenue had ever argued that the claim for deduction of these amounts (towards fabrication and designing charges) itself evidenced that the appellant did not carry on any manufacturing activity. Such being the circumstance, the Revenue cannot be now permitted to urge this aspect for the first ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00/-, 9,86,795/- and 2,40,000/- made on these counts are, accordingly, hereby deleted." 12. The corresponding findings of the ITAT in the impugned order are as follows: - "5. Ground Nos.8 and 9 are regarding the deduction of designing charges, fabrication charges and the office maintenance expenses. The assessee had not produced requisite bills and vouchers before the AO. These bills and vouchers were produced before the learned CIT (A). The learned CIT (A) considered the matter in totality by comparing these expenses with the expenses of the earlier year and the subsequent year. He came to the conclusion that the expenses were reasonable having regard to expenses in previous and subsequent years. It was also pointed out by him that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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