TMI Blog2017 (9) TMI 481X X X X Extracts X X X X X X X X Extracts X X X X ..... The Respondent : None JUDGMENT Badar Durrez Ahmed, CJ (Oral) 1. Despite notice nobody appears on behalf of the respondent-Assessee. 2. We have heard Mr Kawoosa, who appears on behalf of the Principal Commissioner of Income Tax (the appellant). 3. Although, three questions were framed on 06.06.2016, we feel that only one question would be sufficient for the purposes of this appeal and that question would be:- Whether the Income Tax Appellate Tribunal was justified in deleting the addition made by the Assessing Officer by dis-allowing the deduction claimed under Section 80IB of the Income Tax Act, 1961, on the ground that the Assessee was not involved in the activity of manufacture when the Assessee was converting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come Tax v. Lovlesh Jain: 204 Taxman 134. In that case, a Division Bench of the Delhi High Court was considering as to whether the conversion of standard gold into ornaments or jewelery amounted to manufacture. Though the said question was considered in the context of Section 10A/10B of the said Act, the Division Bench, relying upon various decisions of the Supreme Court as also the definition of manufacture in Section 2(f) of the Central Excise Act, 1944, came to the conclusion that such an activity whereby standard gold is converted into ornaments/jewelery, would amount to manufacture. The view taken was based on the reasoning that as a result of processing of standard gold a commercially different saleable product came into existence. Je ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l composition or integral structure . The present case, however, falls under clause (a) of Section 2 (29BA) of the said Act. This is so because standard 24 carat gold being a non-living physical object is changed through the processes employed by the assessee, into a new and distinct object or article or thing having a different name, character and use in the form of 22 carat gold jewelery. 9. As explained by the assessee before the Assessing officer, standard gold having a purity of 0.999/0.995 is converted into ornaments which have a purity level of 22 carats or lower. The purity is reduced by mixing other metals like silver, copper etc., which are necessary to give strength and durability to ornamental gold, inasmuch as, standard go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... distinguishable as it was not a case where raw diamonds were being processed to result in diamond jewell. 11. In the present case, the gold ornaments were clearly new articles or things compared with the raw standard gold, therefore, the said decision of the Supreme Court would not be of any help to the revenue in the present fact situation. 12. Mr Kawoosa also cited the decision of the Supreme Court in the case of Satnam Overseas Limited v. Commissioner of Central Excise: (2015) 13 SCC 166. That decision, of course, was in the context of the Central Excise Act, 1944. But, even that decision does not run counter to the view we have taken in the present case. In that decision, the Court took the view that the process employed did not r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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