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2019 (12) TMI 830 - HC - Income TaxDeduction u/s 10B(2)(ii) and 10B(2)(iii) - HELD THAT - The controversy involved in this appeal is squarely covered by a judgment in M/S TRIDENT MINERALS 2018 (12) TMI 640 - KARNATAKA HIGH COURT . In view of the aforesaid submissions and for the reasons assigned in the aforesaid judgment, substantial question of law No.1 is answered against the Revenue and in favour of the assessee. Computation of loss - Tribunal is right in holding that the loss should be allowed at 3% of the total quantity and not on the quantity of wastage, as computed by the Assessing Authority? - HELD THAT - The aforesaid substantial question of law which has been framed by a bench of this Court is not a question of law, but is a question of fact as it pertains to the weight of loss on total quantity. Therefore, we are not inclined to answer the same.
Issues:
1. Interpretation of Sections 10B(2)(ii) and 10B(2)(iii) of the Income Tax Act regarding manufacturing activity. 2. Calculation of allowable loss percentage under the Income Tax Act. Analysis: 1. The first issue in this appeal was whether the assessee was engaged in the manufacture or production of an article or thing, meeting the conditions specified in Sections 10B(2)(ii) and 10B(2)(iii) of the Income Tax Act. The Tribunal had ruled in favor of the assessee, which was challenged. However, both counsels agreed that a prior judgment by the Division Bench of the Court dated 10.10.2018 had already settled this issue. The Court, in line with the previous judgment, held that the substantial question of law regarding the manufacturing activity was decided against the Revenue and in favor of the assessee. Therefore, the appeal was dismissed on this ground. 2. The second issue revolved around the calculation of allowable loss percentage under the Income Tax Act. The Court noted that after considering the arguments from both sides, it was observed that the second substantial question of law was not a legal question but a factual one concerning the determination of the weight of loss on the total quantity. As such, the Court declined to provide an answer to this question. Consequently, the appeal was dismissed without further consideration on this issue.
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