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TMI Blog2018 (6) TMI 1474X X X X Extracts X X X X X X X X Extracts X X X X ..... a process of manufacture, this court cannot easily interfere therewith. Appeal fails. This court does not interfere with the order of the Appellate Tribunal which has upheld that the claim of the assessee for exemption under Section 10B of the Act. - ITAT No. 156 of 2015 GA No.3673 of 2015 - - - Dated:- 27-6-2018 - Sanjib Banerjee And Abhijit Gangopadhyay, JJ. For the Appellant : Mr R. N. Bandopadhyay, Adv., Mr Aniket Mitra, Adv For the Respondent : Mr J. P. Khaitan, Sr Adv., Mr Pratyush Jhunjhunwala, adv ORDER Abhijit Gangopadhyay, J. In this appeal under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as the said Act) the Principal Commissioner of Income Tax (hereinafter referred to as the Revenue) has challenged the judgment and order dated April 30, 2015 passed by the Income Tax Appellate Tribunal, C Bench, Kolkata (the Tribunal, in short, hereafter) in I.T.A No. 1038/KOL/2008 for the assessment year 2004-05. 2. The matter relates to Section 10B of the said Act as has been substituted by the Finance Act, 2000 with effect from April 1, 2001. 3. The assessee filed its return on October 18, 2004 disclosing a total income Nil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id appeal the assessee disclosed its activities towards manufacturing to show that such activities would amount to manufacturing. Such activities were ironing, packing, affixing bar code labels, emblem graphics, affixing stickers, putting silica gel pouch inside the packets, putting heat treated emblem on some of the garments etc. 9. Thus the question which arose before CIT (A) was whether such activities by the assessee in respect of the semi-finished garments were to be considered as manufacturing . 10. In the appeal against the assessment order before the CIT (A) the assessee submitted that the term manufacture had not been defined in the said Act and to gather its meaning, the assessee quoted extensively from several other Statutes which defined the term manufacture or production relevant to the activity governed by those Statutes. The assessee also cited certain judicial pronouncements made in Addl. CIT v. A. Mukherjee (113 ITR 718 Kolkata), M/s. Bejbarua Tea Company v. CIT (220 ITR 530), CIT Gujarat v. Ajay Printer (58 ITR 811) and the judgments reported in 119 ITR 145 and 235 ITR 5 and an unreported judgment of this court in ITA No. 657 of 2008 (Commissioner of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... war Khullar Private Limited. It also noted the judgment and order in Ektara Exports Pvt. Ltd. (supra). 17. The Appellate Tribunal dismissed the appeal filed by the Revenue as it found no infirmity in the order of the CIT (A), holding that the claim of the assessee for exemption for under Section 10B of the Act was rightly allowed. 18. At the hearing before this Court the appellant (i.e. the Revenue) has submitted that the assessee was not a manufacturer and the term manufacture cannot be applied in respect of its so called hundred per cent export oriented undertaking. 19. Though the appellant has framed three questions, it has pressed only one question stating the same to be a substantial question of law. 20. The question is as follows: Whether on the facts and in the circumstances of the case, the Learned Tribunal erred in facts as well as in law in holding that the assessee was carrying on manufacturing activity for claiming deduction under Section 10B of the Income Tax Act though the tax auditor in the Tax Audit Report categorically mentioned that it is a trading concern and no consumption of raw material had taken place. 21. This question as framed by the Rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held in Deputy CST v. Pio Food Packers reported in [1980] 46 STC 63 that the test for determination whether manufacture can be said to have taken place is whether the commodity which is subjected to the process of manufacture can no longer be regarded as the original commodity, but is recognized in the trade as a new and distinct commodity. It was observed (page 65): Commonly, manufacture is the end result of one or more processes through which the original commodity is made to pass. The nature and extent of processing may vary from one case to another, and indeed there may be several stages of processing and perhaps a different kind of processing at each stage. With each process suffered, the original commodity experiences a change. But it is only when the change, or a series of changes, take the commodity to the point where commercially it can no longer be regarded as the original commodity but instead is recognized as a new and distinct article that a manufacture can be said to take place. 24. In the course of the hearing, the respondent has relied on the view expressed in similar circumstances by this court in Ektara Export Pvt. Ltd. The respondent has relied on anoth ..... X X X X Extracts X X X X X X X X Extracts X X X X
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