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TMI Blog2014 (6) TMI 259X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal is right in law and fact in holding that the assessee is entitled to deduction under section 80HH and section 80-I of the Income-tax Act ? 2. Whether, on the facts and in the circumstances of the case, does conversion of granite boulders into small pieces of different sizes amount to production or manufacture ? 3. Whether, on the facts and in the circumstances of the case and if the answer to the above question is in the affirmative, does the assessee in view of sub-section (9) of section 80HH is entitled to deduction both under sections 80HH and 80-I ?" The above appeals pertain to different assessment years of the respondent-assessee. The facts that lead to the filing of these appeals in brief are as under : The assessee is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s claimed by the assessee. Aggrieved by the said order of the first appellate authority, the Revenue went before the Tribunal challenging the order of the Commissioner of Income-tax (Appeals). The Tribunal following the law laid down in the case of Deputy CIT v. Poabson Granite Products P. Ltd. in I. T. A. No. 495/Coch/2004 dated August 4, 2005, and Panchayil Industries (I. T. A. Nos. 336, 337 & 338/Coch/2002), confirmed the opinion of the Commissioner of Income-tax (Appeals) rejecting the claim of the Revenue. Aggrieved by the same, the Revenue is before this court contending that the activity carried on in the crushing units of the respondent-assessee can neither be called as manufacturing activity or the outcome of the process can be ter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts to manufacture or production. Their Lordships, after referring to several judgments of different High Courts and also earlier judgments of the apex court, dismissed the appeal. The cases which are relevant for the purpose of considering the case on hand would be CIT v. N. C. Budharaja and Co. [1993] 204 ITR 412 (SC) and CIT v. Sesa Goa Ltd. [2004] 271 ITR 331 (SC) which reads as under (page 86 of 320 ITR) : "In the case of CIT v. Sesa Goa Ltd. reported in [2004] 271 ITR 331 (SC), the meaning of the word 'production' came up for consideration. The question which came before this court was whether the Income-tax Appellate Tribunal was justified in holding that the assessee was entitled to deduction under section 32A of the Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upon another judgment of the apex court in Lucky Minmat P. Ltd. v. CIT [2000] 245 ITR 830 (SC). As a matter of fact, Lucky Minmat Pvt. Ltd. (supra) and Arihant Tiles (supra), both are by the Benches consisting of three judges of the apex court. In Arihant Tiles' case (supra) they referred to the principle laid down in Lucky Minmat Pvt. Ltd. (supra). In Lucky Minmat Pvt. Ltd. (supra), the issue that came up for consideration was whether mining of limestone and marble blocks, and cutting and sizing them, amounts to manufacture or production of article in order to consider deduction under section 80HH of the Act. The apex court held that the assessee had business of mining of limestone and marble blocks and, thereafter, cutting and sizing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an article. In that context, their Lordships opined that whether manufacture can be stated to have taken place or not, has to be seen from the test whether the commodity which is subjected to a process can no longer be demanded as original commodity but is a new and distinct commodity. They further opined that the word "manufacture" would ultimately mean there is existence of new goods by the process which may or may not involve manufacture. When the above is the settled position as of now one has to see the actual process that is undertaken so far as the respondent-unit is concerned. The activity normally carried on by the respondent-unit has the following process : "1. Digging holes using jackhammers and air-compressors and blasting for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se, all the products are different though come from the same raw-material. In the light of the above process being undertaken which ultimately results in a different marketing product, in the units of the respondent-assessee, both processes are present, i.e., manufacture and also production. In the light of the above judgments and the reasoning, we are of the opinion, the Tribunal was justified in confirming the orders of the Commissioner of Income-tax (Appeals). So far as the benefits claimed under sections 80HH, 80-I and 80-IB as held by the apex court in the case of Joint CIT v. Mandideep Eng. and Pkg. Ind. P. Ltd. [2007] 292 ITR 1 (SC), if various deductions are independent in nature available to an assessee under different circumstanc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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