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TMI Blog2012 (5) TMI 506X X X X Extracts X X X X X X X X Extracts X X X X ..... ded in favor of Revenue. - INCOME TAX APPEAL No. - 9 of 2003, 11 of 2003 - - - Dated:- 23-5-2012 - Ashok Bhushan, Prakash Krishna, JJ. Petitioner Counsel :- A.N. Mahajan,Ashok Kumar,B.J. Agrawal,D. Awasthi,G.Krishna,R.K. Upadhyay,S.Chopra Heard Shri Shambhu Chopra, learned counsel for the appellants, Shri R.R. Agarwal and Shri Suyash Agarwal for the respondent. It is sufficient to refer to the pleadings of Income Tax Appeal No.9 of 2003, for deciding both the appeals. This appeal under Section 260-A of the Income Tax Act, 1961 (hereinafter called the "Act, 1961") has been filed against the judgment and order dated 25/1/2002, passed by the Income Tax Appellate Tribunal, Delhi (hereinafter called the "Tribunal") in I.T.A. No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usiness of excavating stone boulders of specific size and weight and supplying the same to M/s Hindustan Construction Co. Ltd. for their project at Chandil Bar. As per the note of the assessee this activity involved certain process and it employed considerable labour, machinery and capital. For the manufacture of boulders from Quarries located nearby the dam site, first of all overburden (rough earth and soft stone) is removed to develop the face of the quarry. With the help of Rock drill machines, the holes are made in the rock and blasting material is filled in the holes and after the blasting, big boulders are excavated from the quarry. These big boulders are broken into small ones of specific weight and size which are supplied. The Trib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that since the boulders are produced in a different size and character for the purpose of setting up for different use i.e. for use in the dam and a new article is produced and the condition mentioned in sub-section 2 of Section 80-HH of the Act are fulfilled, no error has been committed in allowing the deduction by the Tribunal. He has placed reliance on the judgement of the Apex Court in Income-tax Officer Vs. Arihant Tiles and Marbles P. Ltd. (210) 320 ITR 79 (SC). We have considered the submissions of the learned counsel for the parties and have perused the record. Section 80-HH (2) of the Act, 1961 uses the word "manufacture" or "produce". "Manufacture" has been defined in Section 2(29BA) of the Act, 1961 which is to the foll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... td. (supra) where it was laid down that mining of lime stone and marble and cutting the same before it was sold could not be considered to be admissible deduction under Section 80-HH of the Act. Following was laid down by the Apex Court at page 831. "The High Court noted that the facts found by the Tribunal in the instant case were (page 247) "the assessee had business of mining of limestones and marble blocks and thereafter cutting and sizing the same before being sold in the market". The High Court distinguished its earlier judgment in the case of Best Chem and Limestone Industries Pvt. Ltd. [1994] 210 ITR 883, because there the assessee was engaged in the business of extracting limestone and its sale either as such or after converting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ergoing the process indicated above certainly results in emergence of a new and distinct commodity. The original block does not remain the marble block, it becomes a slab or tile. In the circumstances, not only is there manufacture but also an activity which is something beyond manufacture and which brings a new product into existence and, therefore, on the facts of these cases, we are of the view that the High Court was right in coming to the conclusion that the activity undertaken by the respondents-assessee did constitute manufacture or production in terms of section 80-IA of the Income-tax Act, 1961. " The said case is clearly distinguishable since in the said case there were various stages through which blocks have to go and they wer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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