ITO, Jaipur V. CROSSLAND INDUSTRIES, Jaipur

ITA 124/JPR/2013

• Counselvise Citation: 12423114 RSA 2013
• Duration Of Justice: 2 year(s) 5 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2004-2005
• Appeal Filed On: 31-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P C PARWAL CA DHK
• Section: 10B; 148

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH VH-VKJ-EHUK] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI T.R. MEENA, AM VK;DJ VIHY LA-@ ITA NO. 124/JP/2013 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2004-05 THE ITO WARD- 4 (2) JAIPUR CUKE VS. M/S. CROSSLAND INDUSTRIES C-57, ROAD NO. 5 VKI AREA , JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AACFC 2071R VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SMT. NEENA JEPH, JCIT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL, CA LQUOKBZ DH RKJH[K@ DATE OF HEARING : 18/06/2015 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 17/07/2015 VKNS'K@ ORDER PER T.R. MEENA, AM THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A)-II, JAIPUR DATED 20-11-2012 FOR THE ASSESSME NT YEAR 2004-05 WHEREIN THE REVENUE HAS RAISED SOLITARY GROUND AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DIRECTING T O ALLOW THE DEDUCTION U/S 10B TO THE ASSESSEE HOLDING THE ACTIV ITY OF THE ASSESSEE AS MANUFACTURING, WITHOUT CONSIDERING THE FACTS THAT THE ACTIVITIES OF THE ASSESSEE WERE MORE IDENTICAL TO THE CASE OF M/S. LUCKY MINMAT, WHERE THE APEX COURT DID NOT HOLD THE ACTIVITIES AS MANUFACTURING. ITA NO. 124/JP/2013 ITO, WARD- 4 (2), JAIPUR VS. M/S. CROSSLAND INDUSTR IES, JAIPUR . . 2 2.1 BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE F IRM IS ENGAGED IN THE MANUFACTURING AND EXPORT OF CUT AND POLISHED NATURA L AND SLAT STONE TILES FROM BLOCKS. THE ASSESSEE FILED ITS RETURN DECLARIN G INCOME OF RS. 4,83,947/- ON 29-10-2004 AFTER CLAIMING EXEMPTION A MOUNTING TO RS. 43,55,509/- U/S 10B OF THE ACT. THE RETURN WAS PROCESSED U/S 143(1) OF THE ACT ON 25-04-2005. THE NOTICE U/S 148 OF THE ACT WAS ISSUED ON THE ASSESSEE ON 4-02-2011. IN RESPONSE TO THIS NOTICE, THE ASSESSEE FILED REPLY ON 10-02-2011 INDICATING THAT RETURN ALREADY FILED ON 29-10-2004 MAY BE TREATED AS RETURN FILED IN RESPONSE TO THIS NOTICE AND ALSO REQUESTED THE AO TO GIVE REASONS FOR ISSUING THE NOTICE U/S 148 OF T HE ACT. THE AO HAS GIVEN THE FOLLOWING REASONS FOR REOPENING THE ASSES SMENT. THE ASSESSEE HAS FAILED ITS RETURN OF INCOME ON 2 9-10-2014 DECLARING TOTAL INCOME OF RS. 4,83,947/-. THE RETUR N WAS PROCESSED U/S 143(1) ON 25-04-2005 AND REFUND WAS ISSUED TO T HE ASSESSEE. ON PRELIMINARY VERIFICATION, IT WAS FOUND THAT THE ASSESSEE HAS CLAIMED EXEMPTION U/S 10B AMOUNTING TO RS. 43,5 5,509/-. ASSESSEE'S BUSINESS IS MANUFACTURING OF NATURAL AN D SLATE STONES. DURING ASSESSMENT PROCEEDINGS FOR THE ASS ESSMENT YEAR 2006-07, IT WAS FOUND THAT THE ASSESSEE IS NOT DOIN G ANY MANUFACTURING ACTIVITY AND SIMPLY CUTTING, SIZING A ND POLISHING SLATE STONES. THE ACTIVITY DONE BY THE ASSESSEE IS NOT MANUFACTURING ACTIVITY, THEREFORE, EXEMPTION U/S 10B IS NOT ALLO WABLE TO ASSESSEE. DURING THE YEAR (A.Y.04-05), THE SITUATION IS SIMIL AR. IN THE CASE OF LUCKY MINMET (P) LTD. VS. CIT, 245 ITR 830, IT WAS HELD THAT CONVERSION OF MARBLE BLOCKS IN SLABS/TILES IS NOT A MANUFACTURING PROCESS. ON THE BASIS OF ABOVE FACTS PRIMA FACIE, IT IS FOUN D THAT INCOME TO THE TUNE OF RS. 43,55,509/- ESCAPED ASSES SMENT . ITA NO. 124/JP/2013 ITO, WARD- 4 (2), JAIPUR VS. M/S. CROSSLAND INDUSTR IES, JAIPUR . . 3 THE ASSESSEE VIDE LETTER DATED 9-03-2011 OBJECTED T O THE NOTICE U/S 148 OF THE ACT AND THE AO VIDE HIS LETTER DATED 5-04-2011 REJECTED THE CONTENTION OF THE ASSESSEE AND SUBSEQUENTLY DISALLOWED THE CLA IM OF RS. 43,55,509/- TO THE ASSESSEE AS TO EXEMPTION U/S 10B OF THE ACT. 2.2 THE ASSESSEE PREFERRED FIRST APPEAL BEFORE THE LD. CIT(A) WHO AFTER CONSIDERING VARIOUS ORDERS OF THIS BENCH OF ITAT I N THE CASE OF THE ASSESSEE ALLOWED EXEMPTION U/S 10B OF THE ACT AFTE R OBSERVING AS UNDER:- 5. ON MERITS ALSO, THE CASE OF THE AO DOES NOT ST AND BECAUSE HON'BLE ITAT IN VARIOUS DECISIONS IN THE C ASE OF THE APPELLANT IN DIFFERENT YEARS HAS HELD THAT THE APPE LLANT IS NOT ONLY CUTTING OR SIZING THE BOULDERS BUT SLICING BOULDERS INTO TILES, CALIBRATING AND ALSO POLISHING THE SAME BEFORE SALE IN THE MARKET. HON'BLE TRIBUNAL IN A.Y. 2003-04 HAS HELD IN THE A PPELLANTS OWN CASE THAT THE SLATE STONE TILES IS A DISTINCT MARKE TABLE COMMODITY, THEREFORE, IT RESULTS INTO MANUFACTURING / PRODUCTI ON OF ARTICLE OR THING. FOR THE SAKE OF FURTHER CLARITY IT MAY BE ME NTIONED THAT THE CASE OF LUCKY MINMET (P) LTD. 245 ITR 830 RELATES T O THE BUSINESS OF A MINOR OWNER WHERE THE ASSESSEE WAS PRIMARILY ENGAGED IN MINING OF LIMESTONE AND MARBLE BLOCKS AND THEREAFTE R, CUTTING & SIZING THE BLOCKS BEFORE TRANSPORTING AND MARKETING , WHEREAS THE APPELLANT IS COVERED BY HON'BLE SUPREME COURT DECI SION IN THE CASES F CIT VS. SESA GROUND OF APPEAL 271 ITR 331 W HERE LARGE BENCH OF HON'BLE SUPREME COURT AFTER DECISION OF L UCKY MINMAT HAS SPECIFICALLY DEALT WITH AMBIT OF PRODUCTION UPH OLDING THE ACTIVITY OF MARKING/ POLISHING GRANITE SLABS AS PR ODUCTON HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF M/S. A RIHANT TILES & MARBLES VS. ITO, 211 CTR 169 (RAJ.) HELD THAT CONV ERSION OF MARBLE BLOCKS INTO SLABS AND TILES AMOUNTS TO MANUF ACTURE OF THING OR ARTICLE WITHIN THE MEANING OF SECTION 80IA/80IB OF THE I.T. ACT. FURTHER THE APPELLANTS OWN CASE FOR ASSESSMENT YEA R 2001-02, 2002-03, 2004-05 AND 2006-07, THE HON'BLE ITAT HEL D THAT THE ACTIVITIES UNDERTAKEN BY THE APPELLANT AMOUNT TO MA NUFACTURE AND HELD DEDUCTION U/S 10B ALLOWABLE TO THE APPELLANT. 2.3 THE LD. DR RELIED ON THE ORDER OF THE AO. ITA NO. 124/JP/2013 ITO, WARD- 4 (2), JAIPUR VS. M/S. CROSSLAND INDUSTR IES, JAIPUR . . 4 2.4 ON THE OTHER HAND, THE LD. AR RELIED ON THE O RDER OF THE LD. CIT(A) AS WELL AS EARLIER DECISIONS OF THIS BENCH IN THE CASE OF THE ASSESSEE. 2.5 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE HAVE GONE THROUGH EARLIER O RDERS OF THIS BENCH WHEREIN WE OBSERVED THAT THIS BENCH HAS ALLOWED THE DEDUCTION U/S 10B OF THE ACT TO THE ASSESSEE. RESPECTFULLY FOLLOWING THE DECISIONS OF THIS BENCH (SUPRA), WE FIND NO REASON TO INTERFERE IN TH E ORDER OF THE LD. CIT(A). THUS THE APPEAL OF THE REVENUE IS DISMISSED . 3.0 IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 17 /07/20 15. SD/- SD/- VKJ-IH-RKSYKUH VH-VKJ-EHUK (R.P.TOLANI) (T.R. MEENA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 17 /07/2015 *MISHRA VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE ITO, WARD- 4(2), JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- M/S. CROSSLAND INDUSTRIES, JAIPUR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO.124/JP/2013) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR