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TMI Blog2017 (3) TMI 1658X X X X Extracts X X X X X X X X Extracts X X X X ..... of mining of iron ore for export. Mining is carried out in leased area under mining license No.2487 in N-E range, Siddapur, Sandur Taluk, Bellary, Karnataka. There are two separate undertakings and one of them is 100% Export Oriented Unit ('EOU') which was set up in the Assessment Year 2007-08. The assessee was subjected to search under Section 132 on 10.12.2010 which continued till 7.2.2011 when the final Panchanama was drawn. Subsequently, a Notice under Section 153A of the Income Tax Act, 1961 (in short 'the Act') was issued by the Assessing Officer. In response to which the assessee filed returns of income for the assessment years 2009-10 and 2010-11 declaring income of Rs. 28,16,70,090 and Rs. 110,88,62,620. For the Assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctares in the mining license No.2487 was approved by the concerned authorities. Thus the learned Authorised Representative has submitted that any export from this area which was approved as an EOU is classifed as an export from EOU and consequently eligible for deduction under Section 10B of the Act. The 100% EOU purchased plant and machinery known as the 'Sesa Plant' on 31.3.2008 and it was put to use in the following month i.e. April, 2008 relevant to the Assessment Year 2009-10. The 100% EOU is bounded by 5.20 Hectares area however Sesa Plant could not be located within the bounded area due to techno-economical reason. Initially the assessee wanted the bounded area of 5.2 Hectares to be redefined to include the Sesa Plant also with a vie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Thus he has contended that when all exports of assessee were approved by the Excise and Custom authorities and there is no violation of any of the conditions under Section 10B then the assessee is eligible for deduction in respect of iron ore mined and excavated and would process through Sesa Plant which is part of the EOU unit. The export of the iron ore was mined and excavated but processed through a non-EOU unit would not contradict any of the conditions under Section 10B of the Act and therefore the status of the assessee as EOU is not in dispute then deduction under Section 10B cannot be denied merely because of outsourcing of processing of iron ore. He has referred to the profit and loss account as well as ledger account to show tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 10B was accepted by Assessing Officer in scrutiny assessment under Section 143(3) of the Act for the Assessment Years 2007-08 and 2008-09. The Assessing Officer has not disputed the fact that the 100% EOU of the assessee was approved for the entire mining area of 105.22 Hectares under mining License 2487 in N-E range, Bellary District, Karnataka. Therefore the mining and excavation of iron ore of the assessee has been carried out form the area belonging to 100% EOU unit. The EOU unit of the assessee purchased plant and machinery known as Sesa Plant and iron ore was processed in this plant apart from outsourcing of some of the processing work to NAPC Ltd. The Assessing Officer denied the claim of the assessee under Section 10B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee claimed 50% deduction in the earlier years. However, for the year under consideration the assessee claimed deduction under Section 10B of the Act for the entire income of EOU but the Assessing Officer denied the claim. The excavation of iron ore is undisputedly done by the EOU from the mining area belong to EOU and therefore the entire raw-material belongs to the EOU of the assessee. The point of controversy is only regarding the processing of the iron ore as it was done by the Sesa Plant situated outside the bonded area. The Assessing Officer has not disputed the fact that Sesa Plant belongs to the EOU of the assessee. Since the assessee is not an importer of any goods or articles to be used for manufacturing activity for export ..... X X X X Extracts X X X X X X X X Extracts X X X X
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