TMI Blog2019 (11) TMI 513X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. It is relevant to observe, in the aforesaid case also, the assessee had its unit in Surat SEZ. 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 view that assessee is eligible to claim deduction under Section 10AA of the Act, since, the activity of import of diamonds for re-exporting comes within the nature of services as provided under Section Section 10AA of the Act. We must observe that learned Commissioner (Appeals), while sustaining the disallowance of deduction claimed by the assessee under Section 10AA of the Act, has referred to the decision of the Hon ble Supreme Court in the case of M/s. Dilip Kumar and Company Ors. [ 2018 (7) TMI 1826 - SUPREME COURT] . However, the ratio laid down in the said decision rather supports the claim of the assessee, since, the assessee has fulfilled the basic conditions of Section 10AA of the Act and comes within the framework o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act, assessee must manufacture goods and products for export. He observed, the assessee does not have the necessary plant and machinery to process raw material and also lacks the requisite manpower. Thus, he ultimately concluded that the assessee does not undertake any manufacturing activity at all and is simply engaged in trading activity. Further, referring to the notes attached to the Audit report, he observed that as per the said notes, assessee has been described as a trading firm engaged in the business of import and export of diamonds from the SEZ unit. On the basis of the aforesaid factual analysis and referring to the provisions of Section 10AA of the Act as well as certain judicial precedents, the Assessing Officer ultimately held that the assessee is not eligible to claim deduction under Section 10AA of the Act. Accordingly, he disallowed assessee s claim of deduction under the said provision. Being aggrieved, assessee preferred appeal before learned Commission (Appeals). However, learned Commission (Appeals) also sustained the disallowance concurring with the view expressed by the Assessing Officer. 3. The learned Authorised Representative (AR) submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 otherwise stands squarely covered in favour of the assessee by virtue of the various decisions of the Tribunal. The learned AR finally submitted, the decision of the Hon'ble Supreme Court in the case of Commissioner of Customs (Import) Mumbai vs M/s. Dilip Kumar and Company Ors., CA No. 3327 of 2007 dated 30.07.2018 relied upon by the learned Commission (Appeals) would have no impact as in the present case there is no ambiguity with regard to the interpretation of the statutory provision and the assessee has fulfilled the basic conditions of Section 10AA of the Act to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fined under the SEZ Act and rules framed thereunder would be relevant. As discussed earlier, the definition of services under the SEZ Act and rules framed thereunder encompasses trading activity also. Therefore, import of diamonds for re-export though, may be in the nature of a trading activity, but is certainly in the nature of services , hence would qualify for deduction under Section 10AA of the Act. In the case of Goenka Diamonds Jewellers Ltd. (supra), the Tribunal, after examining the provisions of Section 10AA of the Act vis- -vis the SEZ Act and rules framed thereunder, had concluded that since the definition of services under the SEZ Act also includes trading activity, the activity relating to import of diamonds for re-export would qualify for deduction under Section 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 assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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