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TMI Blog2021 (6) TMI 818X X X X Extracts X X X X X X X X Extracts X X X X ..... s other case laws to buttress the revenue s view that the deduction u/s 10B is available in respect of manufacture or production activities. Hence the issue has to be examined independently without having resort to the decision rendered by the co-ordinate bench in AY 2006-07. Assessee has furnished the Profit and Loss account which show that the assessee has incurred expenses on extraction and quarrying, purchase of blocks and purchase of finished goods. Assessee has been doing its own processing of raw blocks and has also purchased finished goods. The Hon ble Supreme Court has held in the case of Arihant Tiles Marbles P Ltd [ 2009 (12) TMI 1 - SUPREME COURT] that sawing of marble blocks into slabs and tiles and polishing activities amount to manufacture or production. Hence the assessee should be eligible for deduction u/s 10B in respect of export of granite slabs, which it has subjected to production process. Since the provisions of sec.10B refers to the activity of manufacture or production , we are of the view that the assessee shall not be eligible for deduction u/s 10B in respect of profits realised export of purchased finished goods (trading items). The break-up details of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd finished granite stones. In the year relevant to assessment year 2003-04, the new unit was registered with Cochin SEZ. The assessee claimed deduction u/s 10B of the Act in respect of the new unit from that year onwards. In the original assessment proceedings for the year under consideration, the A.O. allowed the deduction claimed by the assessee u/s 10B of the Act. The Ld. CIT(A), in the revision order, observed that the assessee is not eligible for deduction u/s 10B of the Act for the following reasons:- a) The new unit is a case of splitting up/reconstruction of a business already in existence. b) The assessee has transferred old plant & machinery previously used for other business and the value of such machinery constitutes 84% of the total value of machinery as on 31.3.2004, which exceeds the threshold limit of 20%. c) The business of the assessee was established as DTA in 1983- 84 and 10 years have elapsed much earlier. d) If at all, deduction u/s 10B of the Act is allowable to the assesse, it is allowable only in respect of profit relatable to export of monuments, since the assessee has earned profits on export of granites, which is a trading item. The Ld. CIT(A) n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court in the case of CIT Vs. ARR-ESS Exim Pvt Ltd. (ITA No.551/2013 & 553/2013). In the above said case, the Hon'ble Delhi High Court has expressed the view that section 10B of the Act is a beneficial provision and the assessee should be given the benefit of exemption even on the goods which the assessee has not manufactured himself but has got produced through outsourcing i.e. it is held that the manufacture would include procurement through outsourcing. Since revenue could not contradict the above said decision with any other judicial precedent, the coordinate bench held that the assessee would be eligible for deduction u/s 10B of the Act in respect of whole of its profit. 6. The Ld. CIT(A), after considering the decision of the coordinate bench rendered for assessment year 2006-07 and also the decision of Hon'ble Delhi High Court in the case of ARR-ESS Exim Pvt Ltd. (supra) proceeded to discuss various other case laws with regard to the claim for deduction u/s 10B of the Act. The Ld. CIT(A) relied on the following decisions: a) CIT Vs. N.C. Budharaja & Copany (1993) 204 ITR 412. b) CIT Vs. Gwalior Ryan Silk Manufacturing Company Ltd. (1992) 196 ITR 149 (SC). c) Tonira Pha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties. The assessee's case is that it has produced cut and polished granite slabs. It is also the case of the assessee that the co-ordinate bench of Tribunal has allowed the deduction on the profit realized on export of granite slabs in AY 2006-07 by following the decision rendered by Hon'ble Delhi High Court in the case of CIT Vs. ARR-ESS Exim Pvt Ltd. (ITA No.551/2013 & 553/2013). 11. In this regard, we notice that the Tribunal, in AY 2006-07, has followed the decision rendered by Hon'ble Delhi High Court in the case of CIT Vs. ARR-ESS Exim Pvt Ltd. (supra) by observing that no other contrary decision has been brought to its notice by the revenue. However, the Ld CIT(A), after noticing above said observations of the Tribunal, has discussed various other case laws to buttress the revenue's view that the deduction u/s 10B is available in respect of manufacture or production activities. Hence the issue has to be examined independently without having resort to the decision rendered by the co-ordinate bench in AY 2006-07. 12. The assessee has furnished the Profit and Loss account at pages 63 of the paper book. A perusal of the same would show that the assessee has incurred expenses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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