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TMI Blog2017 (4) TMI 1646X X X X Extracts X X X X X X X X Extracts X X X X ..... . Mahi Yadav for Mr. Sameer Jain For the Respondent(s) : Mr. Mahendra Gargeiya JUDGMENT PER 1. Since both these appeals involve common question of law and fact, they are decided by this common judgment. 2. By way of these appeals, the appellants have assailed the judgment and order of the Tribunal whereby Tribunal has dismissed appeal of the department and partly allowed the appeal of the assessee modifying the order of CIT(A). 3. While admitting the appeals, this court has framed following substantial question of law:- Appeal No. 287/2009 1. whether in the facts and circumstances of the case, the assessee is entitled for benefit of deductions under Sec. 80 IB when assessee is not involved in any manufacturing activity and is only engaged in mining blocks and cutting them into tiles and polishing them? Appeal No. 631/09 1. Whether in the facts and circumstances of the case the ITAT was justified in law in granting the benefit of deduction u/s. 80IB to the assessee despite of the facts that the assessee is not involved in manufacturing activity? 4. At the outset, counsel for the appellant has strongly relied upon the decision of the Supreme Court in Additional Commissioner of Commer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A) of the Income Tax Act which reads as under:- 10BA. Special provisions in respect of export of certain articles or things.- (1) Subject to the provisions of this section, a deduction of such profits and gains as are derived by an undertaking from the export out of India of eligible articles or things, shall be allowed from the total income of the assessee : Provided that where in computing the total income of the undertaking for any assessment year, deduction under section 10A or section 10B has been claimed, the undertaking shall not be entitled to the deduction under this section : Provided further that no deduction under this section shall be allowed to any undertaking for the assessment year beginning on the 1st day of April, 2010 and subsequent years. (2) This section applies to any undertaking which fulfils the following conditions, namely : (a) it manufactures or produces the eligible articles or things without the use of imported raw materials; (b) it is not formed by the splitting up, or the reconstruction, of a business already in existence : Provided that this condition shall not apply in respect of any undertaking which is formed as a result of the re-establishment, r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner. 7. And another decision of this court in Amruthsheele vs. Union of India (1995) (80) ELT 13 (Raj.) holding as under:- 7. Consequently we hereby allow the writ petition; and declare that no manufacturing process is involved in cutting marble blocks into slabs and, excise duty is not payable under the Act. The impugned notices dated 20-9-1982 (Annexure 5), 15-6-1982 (Annexure 6) and 15-3-1983 (Annexure 7) are hereby quashed. No order as to costs. 8. Counsel for the respondent Mr. Gargeiya has taken us to the order passed for assessment year 2003-2004 in Appeal No. 631/2009, and relied upon the following decisions:- (1). In Grace Exports vs. ITO (2012) 79 DTR 361 (Raj.) wherein it has been held as under:- Accordingly, the answer to question No. 1 is that the Tribunal was not justified in disallowing the benefit available to the assessee under s. 10B of the IT Act; and the view as taken by the Tribunal does not stand in conformity with the law declared by the Hon'ble Supreme Court in the case of ITO vs. Arihant Tiles Marbles (P) Ltd. (supra). Accordingly, the appeal as filed by the Revenue before Tribunal (ITA No. 357/Ju/2008) for the asst. yr. 2004-05 shall stand dism ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that, in answering that question, the High Court had held that raw diamonds and cut and polished diamonds were different and distinct marketable commodities having different uses ; Therefore, a company engaged in cutting and polishing raw diamonds for the purpose of export was engaged in the processing of goods to convert them into marketable form. The question that the High Court and we are here concerned with is whether, in cutting and polishing diamonds, the assessee manufactures or produces articles or things. 6. There can be little difficulty in holding that the raw and uncut diamond is subjected to a process of cutting and polishing which yields the polished diamond, but that is not to say that the polished diamond is a new article or thing which is the result of manufacture or production. There is no material on the record upon which such a conclusion can be reached. 7. The appeal is, therefore, allowed. The order under challenge is sot aside. The question quoted above is answered in the negative and in favour of the Revenue. The assessee shall pay to the Revenue the costs of the appeal. 5. He has contended that the view taken by the Tribunal is required to be reversed in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herein-above, has a wider meaning as compared to the word manufacture . Further, when one refers to the word production , it means manufacture plus something in addition thereto. The word production was not under consideration before this Court in the case of Aman Marble Industries Pvt. Ltd. (supra). Be that as it may, in that case, it was held that cutting of marble blocks into slabs per se did not amount to manufacture . This conclusion was based on the observations made by this Court in the case of Rajasthan State Electricity Board (supra). In our view, the judgment of this Court in Aman Marble Industries Pvt. Ltd. (supra) also has no application to the facts of the present case. One of the most important reasons for saying so is that in all such cases, particularly under the Excise law, the Court has to go by the facts of each case. In each case one has to examine the nature of the activity undertaken by an assessee. Mere extraction of stones may not constitute manufacture. Similarly, after extraction, if marble blocks are cut into slabs per se will not amount to the activity of manufacture. 17. In the present case, we have extracted in detail the process undertaken by each of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd processing of iron ore did not produce any new product whereas it was argued on behalf of the assessee that it did produce a distinct new product. The view expressed by the High Court that the activity in question constituted production has been affirmed by this Court in Sesa Goa's case saying that the High Court's opinion was unimpeachable. It was held by this Court that the word production is wider in ambit and it has a wider connotation than the word manufacture . It was held that while every manufacture can constitute production, every production did not amount to manufacture. 8. He has contended that the word production is to be construed as a wider meaning than manufacture and in view of the observations made by the Supreme Court, the view taken by the Tribunal is just and proper. 9. In CIT vs. Goverdhan Prasad D.B. Income Tax Appeal No. 299/2009 decided on 2.3.2017 similar view was taken. 10. Taking into consideration the activity which is carried out, in view of the above, we are in complete agreement with the view taken by the Tribunal. 11. The issues are answered in favour of the assessee and against the department. 12. The appeals stand dismissed. A copy of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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