2017 (6) TMI 407 - HC - Income Tax

Entitlement for deduction under Section 80IB - whether by grinding the soap stone, assessee is carrying out a manufacturing activity? - Held that - In view of the decision of Supreme Court in the case of Commissioner of Income Tax vs. Sesa Goa Ltd.(2004 (11) TMI 14 - SUPREME Court) the issues are answered in favour of the assessee and against the department.

Summary

Issues:
1. Interpretation of manufacturing activity for deduction under Section 80IB.
2. Consistency in Tribunal's view regarding processing of soap stone.

Analysis:
1. The High Court considered multiple appeals challenging the Tribunal's decision allowing the deduction under Section 80IB for grinding soap stone. The substantial questions of law framed revolved around whether grinding soap stone amounts to manufacturing activity for the purpose of deduction, and if the Tribunal's decision contradicted previous views. The appellant argued in support of the Assessing Officer's order, seeking a reversal of the Tribunal's decision.

2. The respondent relied on various decisions, including Commissioner of Income Tax vs. Sesa Goa Ltd. and other relevant cases, to support their stance. Citing the Supreme Court's decision in Commissioner of Income Tax vs. Sesa Goa Ltd., the Court ruled in favor of the assessee, concluding that grinding soap stone qualifies as a manufacturing activity for Section 80IB deduction. As a result, the appeals were dismissed, and the judgment was directed to be included in each file for reference.