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TMI Blog2015 (10) TMI 2110X X X X Extracts X X X X X X X X Extracts X X X X ..... laid down by the Hon’ble Supreme Court in the case of Sesa Goa Ltd. (2004 (11) TMI 14 - SUPREME Court) and Instruction issued by the CBDT, we are of the opinion that the CIT(A) was correct in allowing the claim of deduction u/s 10B of the Act. - Decided in favour of assessee. - I.T.A. No. 773/HYD/2014, C.O. No. 25/HYD/2015 - - - Dated:- 9-9-2015 - ACCOUNTANT MEMBER For The Revenue : Smt Nivedita Biswas, CIT-DR For The Assessee : Shri D.V. Anjaneyulu and Miss Pravallika, ARs ORDER PER B. RAMAKOTAIAH, A.M. : This is a Revenue s appeal against the order of the Commissioner of Income Tax (Appeals)-VII, Hyderabad dated 25-02-2014. Assessee filed Cross Objection in support of the orders of CIT(A). We have heard Ld. DR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case and in law, the ld. CIT(A) erred in allowing the deduction U/s. 10B without giving an independent finding as to whether the activities of the assessee during the AY. 2010-11 qualify as manufacturer. 2. On the facts and circumstances of the case and in law, the ld. CIT(A) in allowing relief of ₹ 2,55,34,208/- by admitting additional evidence in the form of the agreement with GVPR Engineers Ltd., and the work order without giving an opportunity to the AO to examine the same in violation of 46A . 3. On the issue of Ground No.1, the orders of CIT(A) in earlier years were upheld by the ITAT vide ITA Nos. 256 to 261/Hyd/2012 dt. 08-08- 2014 wherein eligibility of assessee s claim U/s. 10B was examined in detail and Ld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duction u/s 10B is of little relevance and as otherwise is also not borne out from the facts on record. So far as the second allegation of the AO that assessee has not claimed deduction u/s 10B for 10 consecutive assessment years is concerned, on a perusal of facts on record, it becomes clear that the iron ore mining activity was started by the assessee in FY 2007-08 corresponding to the AY under consideration. Therefore, the AO was not correct in observing that the assessee has not claimed any deduction in AY 2006-07. The third ground for denial of deduction u/s 10B is, assessee is not engaged in manufacturing activity. As can be seen from the elaborate discussion in the order of the CIT(A), the mining of iron ore as undertaken by the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The word production has a wider connotation than the word manufacture . While every manufacture can be characterised as production, every production need not amount to manufacture .......... The word production or produce when used in juxtaposition with the word manufacture takes in bringing into existence new goods by a process which may or may not amount to manufacture. It also takes in all the by-products, intermediate products and residual products which emerge in the course of manufacture of goods. It is, therefore, not necessary, as has been sought to be contended by learned counsel for the Revenue, that the mined ore must be a commercially new product. The decisions and other authorities on the definition of the wor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act. So far as decisions relied upon by the learned DR are concerned, both of them are found to be factually distinguishable and do not apply to the facts of the present case. In case of B.M. Salgaonkar Brothers Vs. CIT(supra), the Honb le Karnataka High court while considering assessee s entitlement to deduction u/s 80J found that the plant on which deduction was claimed was for sizing and washing of iron ore. Therefore, the Hon ble High Court held that since there is no manufacture or production of new article or thing deduction cannot be allowed. However, in the present case, assessee is engaged in the mining as well as processing activity. It not only extracts iron ore from beneath the earth but also converts it to a specific grade ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Accordingly, we uphold the same by dismissing grounds raised by the department . There is no merit in Revenue ground, hence rejected. 4. Coming to the next issue of allowing relief by admitting additional evidence in the form of agreement with M/s. GVPR Engineers Ltd, we are of the opinion that there is no additional evidence accepted by the CIT(A) in the order. In fact as seen from the assessment order itself, the AO notes that assessee has claimed that the increase is attributable to ₹ 10.21 Crores spent on road development work at mines and TDS was deducted accordingly. It was the submission of the Ld. Counsel that assessee has furnished the same information which was furnished before the AO in the course of assessment pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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