TaxTMI 
TaxTMI 
2019 (11) TMI 513
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.... are that the assessee, a partnership firm, is engaged in the business of importing for the purpose of re-export of cut and polished diamonds after sorting and grading them. For this purpose, the assessee has set-up a registered unit in the Special Economic Zone (SEZ), Surat. For the assessment year under dispute, assessee filed its return of income on 27.09.2012 declaring Nil income after claiming deduction under Section 10AA of the Act. During the assessment proceedings, the Assessing Officer called upon the assessee to justify its claim of deduction under Section 10AA of the Act. In response to the query raised by the Assessing Officer, it was submitted by the assessee that the activity undertaken by it of importing diamonds for re-expor....
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....ssed by the Assessing Officer. 3. The learned Authorised Representative (AR) submitted, the assessee is a SEZ unit and its activity is to import diamonds for re-export after sorting and grading. He submitted, the activity carried on by the assessee is in the nature of services. He submitted, as per Section 10AA of the Act, not only manufacture and production of articles for export qualifies for deduction, but export of services also qualifies for deduction. He submitted, the term 'services' has not been defined under Section 10AA of the Act and since Section 10AA of the Act was brought to the statute by virtue of SEZ Act, the definition of 'services' as provided under the SEZ Act has to be referred to, to find the true meaning of the said ....
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....submitted, in a series of decisions involving identical nature of dispute, the Tribunal has consistently held that import of diamonds for the purpose of export qualifies for deduction under Section 10AA of the Act. In this regard, he relied upon the following decisions :- i) DCIT vs Goenka Diamonds & Jewellers Ltd., 146 TTJ 68 (ITAT-Jaipur) ii) Hon'ble Rajasthan High Court order in the case of CIT vs Goenka Diamonds & Jewellers Ltd. and ors., D.B. ITA No. 222/2012 dated 24.08.2017. iii) Goenka Diamonds and Jewellers Ltd. vs ACIT & Ors., ITA No. 153/JP/2014 (ITAT-Mumbai) iv) ITO vs Duty Free Distribution Services Pvt. Ltd., 50 ITR (Trib) 325 v) Midas DFS (P) Ltd. vs ITO, 96 taxmann.com 351 4. Thus, he submitted, the issue even....
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....he factual aspect of the issue is concerned, there is no dispute that the assessee is importing diamond for re-export after sorting and grading. It is also not disputed that for carrying out such activity, assessee has a registered unit in SEZ, Surat. So it is governed under the SEZ Act. Section 10AA of the Act, which is introduced in the statute by virtue of SEZ Act, provides exemption for a specified period to SEZ units in respect of profits and gains derived from export of articles or things manufactured or produced or from services. It is the claim of the assessee from the very inception that import of diamonds for re-export is in the nature of services. Admittedly, the expression 'services' has not been defined either under Section 2 o....
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.... 10AA of the Act. The aforesaid decision of the Tribunal was upheld by the Hon'ble Rajasthan High Court while discussing a batch of appeals filed by the Revenue against the decision of the Tribunal. The judgment of the Hon'ble Rajasthan High Court was delivered on 24.08.2017 in Income Tax Appeal no. 222 of 2012 and others. It is relevant to observe, in the aforesaid case also, the assessee had its unit in Surat SEZ. Similar view was again expressed by the Mumbai Bench of the Tribunal in the case of the same assessee in ITA No. 153/JP/2014 and 216/JP/2014 dated 10.01.2018. The other decisions cited by the learned AR also express similar view. Therefore, consistent with the view taken by the different Benches of the Tribunal, we are of the v....