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TMI Blog2021 (8) TMI 662X X X X Extracts X X X X X X X X Extracts X X X X ..... certainly constituted a manufacturing process. It was clarified in the said case that mere mining of limestone and marble and cutting the same before it was sold will not constitute 'manufacture' or 'production' but conversion into lime and limedust could constitute the activity of manufacturing or production. This distinction has not been taken into account by the Department while rejecting the claim of the assessee(s) for deduction under section 80-IA - Decided against the revenue. - Tax Case Appeal No.484 of 2011 - - - Dated:- 5-8-2021 - Honourable Mr.Justice T.S.Sivagnanam And Honourable Ms.Justice Sathi Kumar Sukumara Kurup For the Appellant : M/s.R.Hemalatha Senior Standing Counsel For the Respondent : Mr.M.P.Senthilkumar JUDGMENT T.S.SIVAGNANAM, J. This appeal, filed by the Revenue under Section 260A of the Income Tax Act, 1961 (for brevity, 'the Act') is directed against the order 24.05.2011 made in ITA.No.268/Mds/2011 on the file of the Income Tax Appellate Tribunal, 'C' Bench, Chennai (for brevity, the Tribunal) for the assessment year 2004-2005. 2.The appeal was admitted on 09.11.2011 on the following subs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... into rough/crude blocks merely making them fit for transportation? 3.We have elaborately heard Mrs.R.Hemalatha, learned Senior Standing Counsel for the appellant/Revenue and Ms.Sri Niranjani Srinivasan, learned counsel appearing for the respondent/assessee. 4.There are three appeals arising out of three Assessment Years and we will take T.C.A.No.230 of 2010 as the lead case. 5.The assessee is engaged in the granite business and for the Assessment Year under consideration, AY 2005-06, they filed their return claiming 100% deduction under Section 10-B of the Act. The return was selected for scrutiny and the case was discussed with the assessee. The claim of the assessee was that they are in the business of manufacture of granites and they are a 100% export oriented unit and they are entitled to claim deduction under Section 10-B of the Act. The relevant records were also placed before the Assessing Officer to justify the said claim. The Assessing Officer proceeded to consider the matter by observing that, what is required to be decided is whether the assessee is engaged in the manufacture or production of an article or thing. After taking note of various factors, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s under the process as amounting to manufacture. Thus, when the resultant article no longer retained its original character, but has a different name and character, we do not find any justifiable ground to accept the plea of the Revenue solely by the reason of the absence of definition of 'manufacture' under Section 10B of the Income Tax Act, during the relevant assessment years namely, 2003-04, 2004-05 and 2005-06, that the terms 'manufacture' has to be read in a restricted way that the processing could not be included within the meaning of 'manufacture'. 9. Thus, going by the decision of the Supreme Court in the case of Gem Granites (supra), on the scope of the expression 'manufacture', in the absence of any specific definition, we have no hesitation in giving common man's understanding as to the scope of the expression that the expression 'manufacture' would include every process, which would ultimately result in the production of new article having a different character in view. 9.The decision in the case of Arihant Tiles Marbles (P) Ltd. (supra) would also aid the case of the assessee, wherein, the Court pointed out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0) 245 ITR 830 (SC) to support her submissions that, mining of limestones and marble blocks and thereafter cutting and sizing the same, would not amount to process of manufacture. 13.As pointed out by Ms.Sri Niranjani Srinivasan, learned counsel appearing for the respondent/assessee, the decision in the case of Lucky Minmat Pvt. Ltd. was considered by the Hon'ble Supreme Court in Arihant Tiles Marbles (P) Ltd. (supra) and it was pointed out as to how the important distinction was not noted by the Department. The operative portion reads as follows : 11. The main judgment on which the Department has placed reliance is the judgment of this Court in Lucky Minmat (P) Ltd. v. CIT [2000] 245 ITR 830. In that case, the following question came up for consideration before the Tribunal: Whether on the facts and in the circumstances of the case, the Tribunal was justified in holding that business activity of the assessee was in the nature of manufacturing or production so as to be entitled for relief under section 80HH of the Income-tax Act, 1961. The assessee in that case had the business of mining of limestones and marble blocks which thereafter were cut and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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