Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

M/s Jewels Magnum Versus The Assistant Commissioner of Income Tax, Coimbatore

2016 (2) TMI 707 - ITAT CHENNAI

Deduction under Section 10AA - whether what was manufactured by the assessee is pendant and it can also be known as medallion.? - Held that:- The product manufactured by the assessee even though called as “medallion”, it is pendant in the Indian context. It is an ornament worn by hanging in the chain or necklace. It is common knowledge that the award / medal conferred on special and ceremonial occasions would be normally known as “medallions”. It does not mean that the medallions could not be wo .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ribed as medallion, it cannot be said that there was any violation of approval granted by the Development Commissioner, Special Economic Zone. Irrespective of nomenclature used by the assessee or the Special Economic Zone, this Tribunal is of the considered opinion that what was manufactured by the assessee is pendant. Therefore, there is no violation of conditions imposed by the Development Commissioner.

Coming to quality/purity of the gold, the contention of the Revenue is that the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the pendant or medallion is made without any natural or artificial stone, then it can have the purity of 99.5% or 24 Carat. Therefore, the purity would depend upon the design and stones implanted on the pendant or medallion. Therefore, this Tribunal is of the considered opinion that merely because the pendant / medallion is of 99.5% purity, it would not lose its character as pendant. As already observed, this Tribunal is of the considered opinion that what was manufactured by the assessee is pen .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

A For the Respondent : Sh. Pathlavath Peerya, CIT ORDER Per N. R. S. Ganesan, Judicial Member Both the appeals of the assessee are directed against the respective orders of the Commissioner of Income Tax (Appeals)-2, Coimbatore , dated 16.12.2015, for the assessment years 2011-12 and 2012-13. Since common issue arises for consideration in these appeals, we heard both the appeals together and disposing of by this common order. 2. Sh. T. Banusekar, the Ld. representative for the assessee, submitte .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

pproval granted by MEPZ Special Economic Zone. However, the Assessing Officer rejected the claim of exemption under Section 10AA of the Act on the ground that the assessee delayed the commencement of production at Special Economic Zone. The Assessing Officer has also found that the assessee has not manufactured the item of jewellery authorized by the MEPZ Special Economic Zone. Adverting to the first ground of rejection by the Assessing Officer, namely, commencement of production at Special Econ .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nomic Zone granted permission for installation of the Genset on 05.12.2008. The assessee has produced copies of the file to support that the assessee has commenced manufacturing activity. MEPZ Special Economic Zone, by an order dated 03.09.2014, found that the assessee commenced production as on 14.04.2009. According to the Ld. representative, once the Special Economic Zone accepts the date of commencement of production, the Assessing Officer cannot say that the assessee had delayed commencement .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ersions and manufacture, the Ld. representative submitted that after import of gold bar, the same was converted into rolling gold sheets. Thereafter the gold would be melted and blended. After carrying out blanking, corrections, the gold pendants/medallions would be polished and thereafter, embossing would be done. Once embossing was done, the gold medallions / gold pendants produced by the assessee would go for quality check. After completion of quality check, the gold pendants/ medallions woul .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

has earned 38.81 Crores. Referring to the judgment of Madras High Court in CIT v. Pallava Granite Industries (I)(P.) Ltd. (2014) 42 taxmann.com 102, the Ld. representative submitted that manufacture would include every process, which ultimately results in production of new article having a different character. Ultimately, the High Court found that cutting and polishing of granite slabs would amount to manufacture or production of an article or thing and hence it is eligible for exemption. Refer .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

g to the Ld. representative, the end product manufactured by the assessee, namely, gold medallion / gold pendant has to be treated as a new article. Referring to the assessment order, the Ld. representative submitted that the assessee manufactured gold medallions. Special Economic Zone authorizes the assessee to manufacture only gold bangles and gold pendants. In violation of approval granted by Special Economic Zone, according to the Ld. representative, the Assessing Officer found that the asse .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ion is a species and pendant genesis. Pendant , according to the Ld. representative, is also called as medallion. The term pendant is carried in its definition to include medallion even in the technical sense. 4. The Ld. representative further submitted that there is no reference about any demarcation or classification under Special Economic Zone Rules, 2006. Even the Customs Tariff Act makes no classification as pendant and medallion . The functional utility of the medallion and pendant is one .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e spare is a species. Similarly, the Apex Court in Gujarat State Fertilizer Co. v. Collector of Central Excise 919970 91 ELT 3, found that the term fertilizer is a genesis which may consist of various species of fertilizers, namely, chemical fertilizer, soil fertilizer, animal or vegetable fertilizer, etc. Referring to the opinion said to be given by the President of Madras Jewellery & Diamond Merchants Association, the Ld. representative submitted that Shri Jayanthilal, the President of Mad .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the assessee is entitled for deduction under Section 10AA of the Act. 5. On the contrary, Sh. Pathlavath Peerya, the Ld. Departmental Representative, submitted that there was a survey in the premises of the assessee under Section 133A of the Act on 24.02.2014. During the course of survey operation, the Revenue authorities found that the assessee has not manufactured gold bangles and pendants. MEPZ Special Economic Zone granted approval only for manufacturing gold bangles and pendants. The other .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rt of finished goods, the Ld. D.R. pointed out that the assessee was authorized by Special Economic Zone to manufacture gold bangles and pendants. The assessee, in violation of the approval granted by Special Economic Zone, manufactured gold medallions. According to the Ld. D.R., gold medallion is nothing but a gold coin with purity of 99.5%. The assessee was not authorized to manufacture gold medallions. When the Managing Director Shri K. Srinivasan was examined, he confirmed that the assessee .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

usually round in shape without any hook or hole and it cannot be worn. According to the Government approved valuer, the pendants are casual ornamental wear in jewellery which contain a hook or hole. Therefore, according to the Ld. D.R., the composition of medallion and pendant are totally different. Coin, pendant and medallion are of different and distinct products in the manufacturing. The Ld. D.R. further submitted that the pendants cannot be made with 99.5% purity of gold. According to the Ld .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d as per the approval granted by Special Economic Zone, the CIT(Appeals) has rightly confirmed the disallowance made by the Assessing Officer. 7. We have considered the rival submissions on either side and perused the relevant material available on record. Section 10AA of the Act provides for deduction of deduction of 100% of profits and gains derived from the export of articles or things or from services for a period of five consecutive assessment years beginning with the assessment year releva .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

h reads as follows:- 2(j) entrepreneur means a person who has been granted a letter of approval by the Development Commissioner under sub-section (9) of section 15. Therefore, entrepreneur means a person who has been granted a letter of approval by the Development Commissioner under Section 15(9) of the Special Economic Zone Act, 2005. In this case, the assessee was admittedly granted approval under Section 15(9) of the Special Economic Zone Act, 2005. The approval granted by the Development Com .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

allion. Therefore, we have to understand what is meant by pendant and what is meant by medallion . The words pendant and medallion are not defined in Income-tax Act or in the Special Economic Zone Act. Therefore, we have to go for meaning in the common parlance. The Concise Oxford English Dictionary, Twelfth Edition, describes these words as follows:- Pendant : A piece of jewellery that hangs from a necklace chain. Medallion : A piece of jewellery in the shape of a medal worn as pendant. In view .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ions which are not meant as ornaments but would be treated as treasure of momentos or items of valuable investment. The question arises for consideration is: Is there any difference between pendant and medallion? The meaning of the word pendant and medallion has to be construed in the Indian context. Normally, the pendant would be worn as an ornament along with chain or necklace. The pendant in common parlance may also be called as medallion. The medallion has to be worn as an ornament along wit .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

endants and the same were exported, merely because the foreign nationals call this as medallion, it does not mean that what was manufactured by the assessee is only medallion. The product manufactured by the assessee even though called as medallion , it is pendant in the Indian context. It is an ornament worn by hanging in the chain or necklace. It is common knowledge that the award / medal conferred on special and ceremonial occasions would be normally known as medallions . It does not mean tha .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     bird's eye view     ↓  


|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version