TMI Blog2021 (9) TMI 247X X X X Extracts X X X X X X X X Extracts X X X X ..... of 2016 - - - Dated:- 19-8-2021 - Hon'ble Mr. Justice T.S. Sivagnanam And Hon'ble Mr. Justice Sathi Kumar Sukumara Kurup For the Appellant : Mrs.R.Hemalatha Senior Standing Counsel For the Respondent : Mr.M.P.Senthil Kumar JUDGMENT T.S. SIVAGNANAM, J. This Tax Case Appeal filed by the Revenue under Section 260-A of the Income Tax Act, 1961 ( the Act for brevity), is directed against the order, dated 31.03.2016, passed by the Income Tax Appellate Tribunal, Chennai A Bench, in I.T.A.No.2098/Mds/2015, for the Assessment Year 2010-11. 2.The appeal has been admitted on 26.08.2020 on the following substantial questions of law : 1.Whether on the facts and circumstances of the case, the Tribunal w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t considering the amendment of Sec.10B by omitting cl(iii) of explanation to sub section 7 of the Act? 3.Whether on the facts and circumstances of the case, the order of the Tribunal passed contrary to the case law 251 ITR 323 (SC) is valid? T.C.A.No.279 of 2011 : Whether on the facts and circumstances of the case, the Tribunal was right in dismissing the appeal without considering provisions of sec.10B and the eligibility of the assessee to claim exemption? T.C.A.No.563 of 201 4 : Whether on the facts and in the circumstances of the case, the Tribunal is right in holding that assessee had dimensionally cut and polished the block of granites and same were exported and the assessee is entitled for exempti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Section 10-B of the Act, as is applicable in respect of the Assessment Year under consideration. Accordingly, the claim for deduction was rejected. 6.The assessee preferred an appeal before the Commissioner of Income Tax (Appeals)-XII, Chennai ( CIT(A) for brevity). The appeal was allowed by order dated 31.12.2008. Aggrieved by the same, the Revenue preferred an appeal before the Tribunal, which confirmed the order of the CIT(A) by the order, dated 13.08.2009, impugned before us. 7.The law on subject is no longer res integra and in this regard, we refer to the decision of the Hon'ble Supreme Court in Income-Tax Officer, Udaipur v. Arihant Tiles Marbles (P) Ltd. reported in (2010) 320 ITR 79 (SC) and the decision of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... granites and that rough granites under the process as amounting to manufacture. Thus, when the resultant article no longer retained its original character, but has a different name and character, we do not find any justifiable ground to accept the plea of the Revenue solely by the reason of the absence of definition of 'manufacture' under Section 10B of the Income Tax Act, during the relevant assessment years namely, 2003-04, 2004-05 and 2005-06, that the terms 'manufacture' has to be read in a restricted way that the processing could not be included within the meaning of 'manufacture'. 9. Thus, going by the decision of the Supreme Court in the case of Gem Granites (supra), on the scope of the expression ' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... polished diamond cannot be treated to be a new article, because in the said case, there was no material on record upon which such a conclusion can be arrived at and therefore, the case was decided in favour of the Revenue. In the case on hand, the CIT(A) had elaborately examined the process through which the quarried rough stone goes through before it becomes a polished granite slab or tile or any other article. This aspect was rightly taken note of by the Tribunal in the impugned order, more particularly, in Para No.3 therein. Therefore, we find the decision in Gem India Manufacturing Co. is distinguishable. 11.The learned Standing Counsel placed reliance on the decision of the Division Bench of the High Court of Kerala in Nishanth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal was justified in holding that business activity of the assessee was in the nature of manufacturing or production so as to be entitled for relief under section 80HH of the Income-tax Act, 1961. The assessee in that case had the business of mining of limestones and marble blocks which thereafter were cut and sized before being sold in the market. It was held by this Court that the assessee was essentially in the business of mining of limestone. It was held that the activity of excavation will not constitute manufacture or production. It was further held that even the activity of cutting and sizing of marble blocks after excavation would not come within the ambit of expression 'manufacture' or 'production'. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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