TMI Blog2017 (9) TMI 1885X X X X Extracts X X X X X X X X Extracts X X X X ..... ook 2013 while as the appellant has sold the same at the price of ₹ 17,098/-. AO could also not establish that the assessee had suppressed the purchase cost of semi-furnished goods in order to claim higher deduction U/s.10AA - certificates issued by the concerned officers of the SEZ unit could not be proved to be not genuine. CIT(A) had made a categorical finding on all the above stated facts and the Ld.DR could not convincingly argue or disprove the findings of the Ld.CIT(A) - we hereby sustain the order of the Ld.CIT(A) on merits. - Decided against revenue. - I.T.A. No. 706/Mds/2017 - - - Dated:- 20-9-2017 - SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER For the Appelant : Smt. Ruby George, JCIT For the Respondent : Shri D. Anand, Advocate ORDER PER A. MOHAN ALANKAMONY, AM: This appeal by the Revenue is directed against the order passed by the Ld. Commissioner of Income Tax (Appeals)-3, Madurai dated 07.12.2016 in ITA No.0068/2016-17 for the assessment year 2013-14 passed u/s.250(6) r.w.s.143(3) of the Act. 2. The Revenue has raised several grounds in its appeal however the crux of the issue is that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he bottom of the sluice faster and experience more drag from the bottom. They travel slower and so move towards the centre of the spiral. o Conversely, light particles stay towards the outside of the spiral, with the water and quickly reach the bottom. o At the bottom, a cut is made with adjustable bars, channels or slots, separating the low and high density parts. The mined sand after this process is being bought as raw material by VV Minerals SEZ Units. The process upto this stage is termed as mining activity and the output material at this stage will contain 90% to 95% heavy minerals. The following costs were apportioned to arrive at the cost per ton for the materials being sold to the sister companies. o Royalty paid o Mining expenses o Loading and unloading expenses o Transportation cost o Factory expenses and Labour expenses attributable to this Spiral Unit alone. o The approximate cost per ton works out to ₹ 313/- per MT Now, the concentrate material after this process, which contains ilmenite and garnet and very less waste material. This semi processed material will be supplied to VV Minerals SEZ Units for the further p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion of the assessee and examining the facts of the case, the Ld.AO observed as follows:- (i) The claim of the assessee that the mined sand after spiral process was purchased as raw materials by M/s. VV Minerals SEZ unit, however it was found that the raw materials was Ilmenite containing approximately 5 to 10% of dust. (ii) The assessee s claim that the mineral separation from run on mines is carried out in the SEZ unit is devoid of merits. (iii) As per the Application of removal of excisable goods maintained by the assessee with the Central Excise Department shows that the assessee was importing Ilmenite ores from the domestic tariff area to the SEZ unit and also exporting the same product as per the sales invoices furnished by the assessee during the course of scrutiny proceedings. (iv) It was therefore clear that the raw materials and the finished products are the same. (v) It was evident that the nature of product imported to the SEZ unit from DTA and the product exported are similar, being concentrates of Ilmenite ore. (vi) Therefore this activity of the assessee does not amount to manufacture in terms of the SEZ Act. (vii) It was also evident that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceptable because the concerned Assistant Development Commissioner of the SEZ unit had certified that the unit had commenced production on 29.02.2012 itself. (vi) The Ld.AO could not prove that the certificate issued by the concerned Assistant Development Commissioner of the SEZ unit is not genuine. (vii) From the above it is evident that the SEZ unit of the assessee commenced production on 29.02.2012. (viii) The contention of the Ld.AO that the SEZ unit only removed 22% of the waste material/slit does not carry much weight because the Ld.AO has herself accepted that only 10 to 20% of the impurities were removed by the appellant s SEZ unit. (ix) The comparison of the market price and the invoice price of the assessee is not justifiable because the market price of the finished product as per the year book 2013 was ₹ 15,269/- per metric ton while as the appellant has sold the same at the price of ₹ 17,098/-. (x) There is nothing on record to suggest that the assessee had deliberately suppressed the purchase cost of semifinished materials in order to claim higher deduction U/s.10AA of the Act. 7. Before us the Ld.DR reiterated the findings made by the Ld.A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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