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Kamal Kishore Gupta, Prop. -M/s Kamal Deep Jewellers Versus A.C.I.T., Central Circle-2, Jaipur

2017 (8) TMI 562 - ITAT JAIPUR

Exemption u/s 10A - reconstruction of the existing unit or new unit - scope of manufacturing - ‘splitting up or reconstruction’ of an existing business for the purpose of section 10A - Assessee is manufacturer and exporter of jewellery - proof of purchases - Held that:- As per the condition of the allotment of plot for establishing the industry at SEZ, Sitapura, Jaipur, the assessee to export the assessee’s products and the unit is to be achieve positive net foreign exchange earner every year. T .....

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SEZ unit, thus, the revenue’s claim that the assessee was only trading in the goods, is not factually correct. - The statements taken by the revenue of two of the suppliers were never confronted to the assessee. No opportunity to cross examine these persons were provided. Further as stated in the above part of the order, the purchase bills of Tulsi Jewellers itself mentioned that the assessee has purchased unmounted, unpolished jewelery. The sales bill also suggest that the assessee has sol .....

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f assessee. - ITA No. 469/JP/2015 - Dated:- 1-8-2017 - SHRI BHAGCHAND, ACCOUNTANT MEMBER For The Assessee : Shri Manish Agarwal (CA) For The Revenue : Shri R.A. Verma (Addl.CIT) ORDER PER: BHAGCHAND, A.M. This is an appeal filed by the assessee emanates from the order of the ld CIT(A)-4, Jaipur dated 30/03/2015 for the A.Y. 2010-11, wherein the assessee has raised following grounds of appeal:- 1. On the facts and circumstances of the case and in law the Ld. CIT(A) has grossly erred in upholding .....

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0A of Income tax Act, 1961 for claiming exemption more particularly when the assessee has started manufacturing activity in the year under appeal, thus the exemption u/s 10A being legitimately available to the assessee deserves to be allowed. 1.3 That the Ld. CIT(A) has further erred in observing that no new manufacturing activity was carried out in the manufacturing unit situated in SEZ and the export of goods was in continuation of his existing business without appreciating the fact that the u .....

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ed on 24/09/2010 declaring total income of ₹ 56,466/-. The assessee is manufacturer and exporter of jewellery. A new unit is situated at SEZ-II, Sitapura Industrial Area, Jaipur. The assessee had claimed exemption U/s 10A of the Income Tax Act, 1961 (in short the Act) and declared turnover of ₹ 1.20 crores. The Assessing Officer did not allow the exemption U/s 10A of the Act. The ld CIT(A) has confirmed the action of the Assessing Officer. 3. Now the assessee is in appeal before the .....

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essee further submitted that up to the assessment year 2009-10, the assessee was engaged in the trading of precious and semi-precious stone in the name and style of M/s Kamaldeep Jewellers and the business was carried out from 877, White house, Third Floor, Ganga Mata Ki Gali, Gopal jika Rasta, Jaipur. For the year under consideration, the assessee discontinued his trading business and started a new business activity of manufacturing gold and silver jewellery embedded with precious and semi-prec .....

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40/-. The assessee claimed exemption u/s 10A of the Act. He further submitted that the Assessing Officer as well as the ld. CIT(A) has not considered the claim of the assessee in right and legal perspective. The assessee has submitted all the bills pertaining to entire purchases, sales, and addition to fixed assets to the I.T. authorities. Since this was a new unit and the assessee got necessary approval from the SEZ authorities, for which the ld. CIT(A) stated that it is procedural requirement .....

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assessee informed the SEZ authorities regarding commencement of commercial production at its unit. This fact itself establishes that the assessee was doing business of manufacturing of silver and gold jewellery embedded with precious and semi precious stones from its SEZ unit located in SEZ area. The other allegation of the lower authorities is that the assessee has purchased finished goods from local parties and only did the polishing before exporting, is also factually incorrect. He submitted .....

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ation or conclusion made by the lower authorities for making addition are unjustified. The assessee must have been given a fair opportunity to rebut such baseless allegation and also to cross examine the suppliers. He also relied on the decision of the Hon'ble Supreme Court in the case of CCE Vs. Andaman Timber Industries reported in 2015 (324) ELT 641. He further submitted that the Assessing Officer as well as the ld. CIT(A) has lost sight to the fact that the items purchased were plain un- .....

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hed goods were exported. These facts clearly established that the lower authorities were not justified in denying exemption to the assessee. After procurement of raw material (un-mounted castings of metals and precious and semiprecious stones in rough form) these items are studded/embedded by cut and polished precious and semi-precious stones. Assessee did cutting and polishing of rough precious and semi-precious stones and after that the polishing and finishing of studded/ mounted metal casting .....

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d that definition of the term manufacture from the EXIM policy and upheld the process of blending and packaging of tea, as amounting to manufacture for the purpose of claiming exemption u/s 10A of the Act. The other allegation that the assessee has formed unit from the reconstruction of an export unit also not based on the facts. The assessee has established a new proprietorship unit opened at SEZ under the same name & style of M/s Kamal Deep Jewellers, therefore, no stock carry forward from .....

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v. DCIT (ITA No. 1015/Mum/2008) has held that the manufacturing of a new product with a new technology at an existing place after taking a fresh approval from SEZ authorities does not amount to splitting up or reconstruction of an existing business for the purpose of section 10A of the Act. Therefore, the ld. AR prayed that the assessee deserve for exemption U/s 10A of the Act. 4. On the other hand, the ld Sr. DR has relied on the orders of the authorities below. He has further submitted that th .....

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ities below. 5. I have heard the rival contentions of both the parties, perused the material available on the record and also gone through the orders of the authorities below. I have also perused the paper book submitted by the assessee. The assessee was deriving income from export of jewellery and precious and semi precious stones so manufactured in his newly established manufacturing unit situated in SEZ, Jaipur. The assessee before the authorities below that this unit was not made out of any .....

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EZ, Sitapura, Jaipur to manufacture of Silver jewellery plain and studded, gold jewellery plain and studded, platinum jewellery, diamond, precious and semi precious stones etc. The necessary evidence is placed at page No. 78 to 79 of the paper book. As per the condition of the allotment of plot for establishing the industry at SEZ, Sitapura, Jaipur, the assessee to export the assessee s products and the unit is to be achieve positive net foreign exchange earner every year. This is evident from t .....

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Radha Govind Jewellers, F-50, Radha Govind Complex, Maniram Ji Ki Kothi Ka Rasta, Ramganj Bazar, Jaipur dated 28/12/2009 is for purchase of rough tourmaline. At page 41 of the paper book, which is a bill of Siddharth International, 877, 111rd floor, White House, Ganga Mata Ki Gali, Gopal Ji Ka Rasta, Jaipur for purchase of silver casting mounting dated 09/12/2009. At page 42 of the paper book, which is a purchase bill of Ganesh Impex 890, G-T, J.K. Enclave, Ganga Mata Ki Gali, Gopal Ji Ka Rasta, .....

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