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Issues involved: Dispute regarding admissibility of deduction u/s 10B of the I.T. Act for an export-oriented unit engaged in processing stone, marble, granite, and exporting the same.
Summary: The appeal was filed by the Revenue against the order of the CIT(A) concerning the assessment year 2005-06, specifically regarding the admissibility of deduction u/s 10B of the I.T. Act for the activity undertaken by the assessee, who claimed to be engaged in a hundred percent export-oriented unit dealing with stone processing and export. The CIT(A) held that the assessee was engaged in manufacturing or production of new articles, similar to previous years, and directed the AO to allow the deduction u/s 10B. The ITAT Delhi Bench 'F' in a consolidated order for previous assessment years found that the activity of cutting stone blocks into tiles, calibrating, and polishing them resulted in a distinct commercial product, qualifying as a manufacturing activity. The Tribunal cited various precedents supporting a broad interpretation of production/manufacturing and upheld the CIT(A)'s findings. Based on the ITAT's previous order and the nature of the activity, the appeal by the Revenue was dismissed, affirming the eligibility of the assessee for the deduction u/s 10B.
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