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GRACE EXPORTS Versus INCOME TAX OFFICER

2012 (8) TMI 1019 - RAJASTHAN HIGH COURT

Disallowing the benefit available to assessee u/s 10B - Held that:- Tribunal was not justified in disallowing the benefit available to the assessee under Section 10-B of the Income Tax Act; and the view as taken by the Tribunal does not stand in conformity with the law declared in the case of Income Tax Officer Vs. M/s Arihant Tiles & Marbles P. Ltd. (2009 (12) TMI 1 - SUPREME COURT ) - D.B. ITA No. 16/2010 - Dated:- 29-8-2012 - DINESH MAHESHWARI and NARENDRA KUMAR JAIN, JJ. Anjay Kothari, for t .....

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;) is directed against the judgment and order dated 13.07.2009 as passed by the Income Tax Appellate Tribunal, Jodhpur Bench, Jodhpur ('the ITAT') in ITA No.357/JU/2008 for the assessment year 2004-05. This appeal has been admitted on the following substantial questions of law: "(1) Whether the Tribunal was justified in disallowing the benefit available to assessee under Section 10B of the Income Tax Act and if so whether the view taken by the Tribunal is in conformity with the law .....

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ose of determination of the questions aforesaid could be noticed in brief as follows: The appellant-assessee, said to be engaged in the business of manufacture and export of finished marble slabs and tiles, in its return for the assessment year 2004-05 claimed exemption under Section 10-B of the Act in respect of its Unit-2 as being 100 percent Export Oriented Undertaking with the essential submissions that it had been engaged in the activity of manufacturing, producing and processing of marble .....

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anufacture of article or things while relying, inter alia, on the decision of the Hon'ble Supreme Court in Aman Marble's case: 257 ELT 393 and that of this Court in Lucky Minmet's case: 226 ITR 245. The Assessing Officer also relied on a decision of ITAT in ITA No.86-87/JU/2004 in the case of Arihant Tiles and Marble. In appeal, the Commissioner of Income-Tax (Appeals), Udaipur ['the CIT(A)'] accepted the contention as urged on behalf of the assessee for allowing the claim un .....

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activity of processing of rough marble slabs by edge-cutting them and polishing them before exporting and it is an EOU not trading in domestic market. The assessee is contending that by activity of processing marble slabs by edge-cutting and polishing them amounts to manufacture in the light of the decision of the Hon'ble Apex Court rendered in the case of Sesa Goa Ltd [supra] wherein it was held that extraction and processing of mineral ore amounts to production within the meaning of the w .....

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m 'manufacture' has been replaced by the word 'produce'. The said word 'produce' is not defined anywhere in the section. Therefore, taking into consideration in the normal sense of the word produce which is derived from the word 'production' is taken by the ld. CIT(A) as normal meaning of production which is involvement of manpower, skill and some degree of complexity. However, the Hon'ble Apex Court in the case of Lucky Minmat P. ltd [supra] has unambiguously .....

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manufacture, which word is used in sec. 10B. Therefore, under these facts and circumstances of the case, we are of the considered view that the reasoning given by the ld. CIT (A) is going contra to the dictum laid by the Hon'ble Apex Court in the case of Lucky Minmat P. ltd [supra] and relied on by the Assessing Officer. Therefore, we are of the considered view that the ld. CIT(A)'s finding on this issue is not sustainable for legal scrutiny and hence the same is hereby set aside by res .....

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ion and further for the fact that on the other part of issue, the revenue has not filed any appeal. Thus, the claim for benefit under Section 80-HHC would not require adjudication in the present matter. So far the question of benefit under Section 10-B of the Act is concerned, the learned counsel for the appellant-assessee has submitted that the view as taken by the ITAT cannot be sustained for the authoritative pronouncement of the Hon'ble Supreme Court in the case of Income-Tax Officer Vs. .....

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ough before they become polished slabs and tiles. In the circumstances, we are of the view that on the facts of the cases in hand, there is certainly an activity which will come in the category of "manufacture" or "production" under section 80-IA of the Income-tax Act...." The learned counsel for the revenue is not in a position to controvert the submissions so made on behalf of the assessee- appellant. Having gone through the decision of the Hon'ble Supreme Court in .....

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