M. K. Industries, Kolkata V. DCIT, Central Circle-XIII, Kolkata, Kolkata

ITA 2102/KOL/2008

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 70505 (ITAT-KOLKATA)
• Duration Of Justice: 5 year(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2013
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2001-2002
• Appeal Filed On: 27-11-2008
• Court: TRIBUNAL
• Department Lawyers: R P NAG SRDR
• Assessee Lawyers: S JHAJHARIA
• Section: 143(3); 10AA; 80HHC; 234B; 10B; 147; 148; 263; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH A KOLKATA BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI ABRAHAM P GEORGE, ACCOUNTANT MEMBER ITA NO. 2102 / KOL / 2008 & ITA NO.636/KOL/2009 ASSESSMENT YEAR :2001-02 M.K. INDUSTRIES 2/2 JUSTICE DWARKANATH ROAD, KOLKATA 700 020 [ PAN NO.AAFFM 3708 E ] DCIT, CC-III, KOLKATA, 18, RABINDRA SARANI, KOLKATA 700 001 V/S . V/S . DCIT, CENTRAL CIRCLE- XIII, KOLKATA, 5 TH FLOOR, PODAR COURT, 18, RABINDRA SARANI, KOLKATA 700 001 M/S M.K. INDUSTRIES 2/2, JUSTICE DWARKA NATH ROAD, KOLKATA 700 020 / APPELLANT .. / RESPONDENT) ITA NO.951/KOL/2008 & ITA NO.873/KOL/2009 ASSESSMENT YEAR: 2003-04 M.K. INDUSTRIES, 2/2 JUSTICE DWARKANATH ROAD, KOLKATA 700 020 DCIT, CC-III, KOLKATA, 18, RABINDRA SARANI, KOLKATA 700 001 V/S . V/S . COMMISSIONER OF INCOME-TAX, CENTRAL-II, KOLKATA,3 RD FLOOR, PODDAR COURT, 18, RABINDRA SARANI, KOLKATA 700 001 M/S M.K. INDUSTRIES 2/2, JUSTICE DWARKA NATH ROAD, KOLKATA 700 020 / APPELLANT .. / RESPONDENT) ITA NO.2102,636,951,873,707, 221 & 2104 A.YS.01-02, 0 3-04 TO 05-06 M.K.INDS. V. ACIT / DCIT CC-XIII, KOL PAGE 2 ITA NO.707/KOL/2009 (ASSESSMENT YEAR: 2003-04) ITA NO.221/KOL/2008 (ASSESSMENT YEAR: 2004-05 ITA NO.2104/KOL/2008 (ASSESSMENT YEAR: 2005-06) M.K. INDUSTRIES, 2/2 JUSTICE DWARKANATH ROAD, KOLKATA 700 020 M.K. INDUSTRIES, 2/2 JUSTICE DWARKANATH ROAD, KOLKATA 700 001 V/S . V/S . ACIT, CENTRAL CIRCLE- XIII, KOLKATA,5 TH FLOOR, PODDAR COURT, 18, RABINDRA SARANI, KOLKATA 700 001 DCIT, CENTRAL CIRCLE- XIII, KOLKATA, 5 TH FLOOR, 18, PODDAR COURT, KOLKATA 700 020 / APPELLANT .. / RESPONDENT) /BY ASSESSEE SHRI S.JHAJHARIA, AR /BY REVENUE SHRI R.P.NAG, SR-DR /DATE OF HEARING 28-11-2013 ! /DATE OF PRONOUNCEMENT 19-12-2013 ' ' ' ' / // / O R D E R PER MAHAVIR SINGH, JUDICIAL MEMBER:- OUT OF THESE 7 APPEALS FIVE ARE BY ASSESSEE AND 2 BY REVENUE. FIRST WE WILL TAKE UP ITA 636/KOL/2009, BY REVENUE AND ITA 2102/KOL/2008, BY ASSESSEE. THESE CROSS APPEALS ARE ARISING OUT OF THE ORDER OF CIT(A), CENTRAL-II, KOLKATA IN APPEAL NO.111/CC-XIII/CIT(A)/C-II/07-08 DATED 27 TH MARCH,2008. RE-ASSESSMENT WAS FRAMED BY ACIT CC-XIII, KOLKATA FOR THE AY 2001-02 VIDE HIS ORDER DATED 28-12-2007 U/S 147/143(3) OF T HE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). ITA NO.2102,636,951,873,707, 221 & 2104 A.YS.01-02, 0 3-04 TO 05-06 M.K.INDS. V. ACIT / DCIT CC-XIII, KOL PAGE 3 2. FIRST WE WILL DEAL WITH ASSESSEES APPEAL. TH E ASSESSEE HAS RAISED THE ISSUE REGARDING DENIAL OF CLAIM OF EXEMPTION BY THE LOWER AUTHORITIES, AS CLAIMED U/S. 10B OF THE ACT AND ALTERNATIVE CLAIM O F THE ASSESSEE WAS TO ALLOW THE CLAIM OF DEDUCTION U/S. 80HHC OF THE ACT. FOR T HIS, ASSESSEE HAS RAISED FOLLOWING GROUND NOS. 2 & 3:- 2. THAT THE REJECTION OF THE APPELLANTS CLAIM FOR EXEMPTION U/S. 10B OF THE ACT FOR THE ASSESSMENT YEAR 2001-2002 IN THE SU M OF RS.5,39,47,889, IS ARBITRARILY MADE WITHOUT ANY REL EVANCE TO THE FACTS. 3. THAT THE REJECTION OF THE APPELLANTS ADDITIONAL GROUND FOR ALTERNATE CLAIM FOR DEDUCTION U/S. 80HHC OF THE ACT FOR THE A SSESSMENT YEAR 2001-2002, IS ARBITRARILY MADE WITHOUT ANY RELEVANC E TO THE FACTS. 3. BRIEFLY STATED FACTS ARE THAT THE ORIGINAL ASSES SMENT WAS FRAMED U/S. 143(3) BY THE ASSESSING OFFICER VIDE HIS ORDER DATE D 31-03-2004, IN WHICH THE EXEMPTION CLAIMED U/S.10B OF THE ACT WAS ALLOWED. E VEN IN THE RE-ASSESSMENT THE AO HAS RECORDED THE FACT THAT THE ASSESSEE HAS BLENDED TEA AND BLENDING IS NOT MANUFACTURING OR PRODUCTION. THE RELEVANT FI NDING OF THE AO IN HIS RE- ASSESSMENT ORDER DATED 28-12-2007 READS AS UNDER:- UPON PERUSAL OF THE MATERIALS ON RECORD, IT IS SEEN THAT THE ASSESSEE FIRM HAS NOT MANUFACTURED OR PRODUCED ANY ARTICLE O R THING. IT HAS ONLY EMPLOYED A MANUAL AND OR TO SOME EXTENT MACHINE-DRI VEN PROCESS FOR MIXING DIFFERENT VARIETIES OF TEA WHOSE END-RESULT WAS OBTAINED BY THE ASSESSEE AS BLENDED TEA FOR THE PURPOSE OF SALE I NCLUDING EXPORT SALE DURING THE YEAR. IN THIS PROCESS, NO PHYSICAL CHEMI CAL, BIO-CHEMICAL OR ANY OTHER CHANGE HAS TAKEN PLACE IN THE INPUT RESUL TING IN DEFINITE CHANGE IN THE COMPOSITION OF THE OUTPUT INGREDIENTS AND SHAPE OF RAW MATERIALS. PRECISELY, THE INPUT ON A PHYSICAL ADMIX TURE DOES NOT RESULT IN COMPOSITIONAL CHANGE IN THE OUTPUT, THOUGH THE TAST ED OF THE PRODUCT, BEING BLENDED TEA, MAY BE DIFFERENT FROM THE INPUT. THE EXISTENCE OF QUALITATIVELY TWO OR MORE VARIETIES OF TEA GRANULES IN AN ALLEGED BLENDING ACTIVITY IS NOT AT ALL A MANUFACTURING ACTIVITY FOR THE SIMPLE REASON THAT THE GRANULES OF TWO OR MORE VARIETIES OF TEA ARE ST ILL MAINTAINING THEIR ORIGINAL CHARACTER AND THERE IS NO CHANGE IN THEIR COMPOSITION EVEN AFTER BLENDING AND PACKAGING. THUS, THE ASSESSEE CANNOT C LAIM THAT THE ACTIVITY OF BLENDING SIMPLICITOR, WITHOUT HAVING EN GAGED ITSELF IN THE MANUFACTURE OR PRODUCTION OF TEA BEFORE RESORTING T O THE ACTIVITY OF BLENDING AND PACKAGING, AMOUNTS TO MANUFACTURE OR PRODUCTION. ITA NO.2102,636,951,873,707, 221 & 2104 A.YS.01-02, 0 3-04 TO 05-06 M.K.INDS. V. ACIT / DCIT CC-XIII, KOL PAGE 4 IN VIEW OF THE ABOVE THE ASSESSING OFFICER DENIED T HE CLAIM OF EXEMPTION U/S.10B OF THE ACT AND ALSO CLAIM OF DEDUCTION U/S. 80HHC OF THE ACT WAS NOT ALLOWED. 4. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT( A), WHO ALSO CONFIRMED THE ACTION OF THE AO. BEFORE CIT(A) ASSES SEE HAS ALSO RAISED THE ISSUE OF RE-OPENING U/S 147 R.W.S. 148 OF THE ACT. BEFORE US ALSO THE ASSESSEE HAS ALSO RAISED THE ISSUE OF RE-OPENING BY WAY OF A DDITIONAL GROUND. THE RELEVANT ADDITIONAL GROUND RAISED BY ASSESSEE READS AS UNDER:- 1. FOR THAT THE ASSESSING OFFICER WAS WHOLLY WRONG AND JUSTIFIED IN INITIATING THE RE-ASSESSMENT PROCEEDINGS U/S 147 OF THE INCOME TAX ACT, 1961 BY ISSUE OF NOTICE U/S. 148 ON 08.12.2006. THE LEARNED CIT (APPEALS) WAS ALSO EQUALLY WRONG AND UNJUSTIFIED IN DISMISSING THE APPEAL WITHOUT DECIDING THIS PERTINENT ISSUE OF THE UNLAWFUL INITIATION OF THE RE-ASSESSMENT PROCEEDINGS U/S. 147 / 143(3) RAI SED IN APPEAL FILED BEFORE HIM. THE ACTIONS OF THE AO AND THE LD. CIT(A ) WERE WHOLLY UNREASONABLY, UNCALLED FOR AND BAD IN LAW. THE RE-A SSESSMENT MADE U/S. 147 / 143(3) IS LIABLE TO BE WHOLLY QUASHED / CANCELLED. 5. AS REGARDS TO REOPENING OF THE ASSESSMENT, THE A SSESSING OFFICER RECORDED THE FOLLOWING FACTS IN HIS ASSESSMENT ORDE R:- IN THE INSTANT CASE, THE ASSESSEE FILED THE ORIGIN AL RETURN OF INCOME ON 31/10/2001 FOR THE AY 2001-02 DECLARING TOTAL INCOM E OF RS.54,53,870/-. AN ASSESSMENT WAS MADE U/S. 143(3) ON 31/03/2004 AS SESSING THE TOTAL INCOME AT RS.54,53,870/-. IN THE ORIGINAL RET URN, THE ASSESSEE MADE A CLAIM FOR EXEMPTION U/S. 10B AMOUNTING TO RS .5,39,47,889/- WHICH WAS ALLOWED IN THE ASSESSMENT MADE U/S. 143(3 ). PERUSAL OF THE RETURN AND MATERIALS ON RECORD REVEALS THAT THE ASS ESSEE WAS MERELY ENGAGED IN THE ACTIVITY OF BLENDING OF TEA AND DID NOT DISCLOSE THE RELEVANT MATERIALS TRULY AND FULLY AS TO HOW THE AC TIVITY OF BLENDING OF TEA AMOUNTED TO MANUFACTURE OR PRODUCTION FOR THE PURPO SE OF CLAIMING EXEMPTION U/S.10B. IN THE FACTS AND CIRCUMSTANCES O F THE CASE AND UNDER THE PROVISIONS OF LAW, THE ACTIVITY OF BLENDI NG OF TEA DOES NOT AMOUNT TO EITHER MANUFACTURE OR PRODUCTION, IN THE ABSENCE OF WHICH THE ASSESSEE IS NOT ELIGIBLE FOR EXEMPTION U/S. 10B. SI NCE THE ASSESSEE HAS ALREADY CLAIMED EXEMPTION U/S. 1210B AMOUNTING TO R S.5,39,47,889/- FOR WHICH IT WAS OTHERWISE NOT ELIGIBLE, NOTICE U/S . 148 WAS ISSUED ON 08/12/2006 REQUIRING THE ASSESSEE TO FILE ITS RETUR N OF INCOME WITHIN 30 DAYS OF THE RECEIPT OF THIS NOTICE. THE NOTICE WAS DULY SERVED ON THE ASSESSEE ON 29/01/2007. ITA NO.2102,636,951,873,707, 221 & 2104 A.YS.01-02, 0 3-04 TO 05-06 M.K.INDS. V. ACIT / DCIT CC-XIII, KOL PAGE 5 6. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE STAT ED THAT THE RE-OPENING IS A JURISDICTIONAL ISSUE AND IT WILL GO TO THE ROOT O F THE CASE AND HENCE THE SAME BE ADMITTED AND DECIDED. ON QUERY FROM THE BENCH, T HE LD. SR-DR FAIRLY CONCEDED THAT THE ISSUE CAN BE ADMITTED AND CAN BE ADJUDICATED UPON. WE HAVE HEARD BOTH THE SIDES AND GONE THROUGH THE FACT S AND CIRCUMSTANCES ON THE ISSUE OF RE-OPENING. AS REPRODUCED ABOVE THE PA RA FROM THE ASSESSMENT ORDER, IT IS CLEAR THAT THE ASSESSING OFFICER HAS R E-OPENED ONLY FOR THE PURPOSE OF DISALLOWING CLAIM OF EXEMPTION U/S.10B OF THE AC T FOR THE REASON THAT ACTIVITY OF BLENDING OF TEA DOES NOT AMOUNT TO EITHER MANUFA CTURE OR PRODUCTION AND ACCORDING TO HIM, IN THE ABSENCE OF WHICH ASSESSEE IS NOT ELIGIBLE FOR EXEMPTION U/S. 10B OF THE ACT. ADMITTEDLY, THE ASSE SSMENT YEAR INVOLVED IS 2001-02 AND ORIGINAL ASSESSMENT WAS FRAMED U/S. 143 (3) OF THE ACT VIDE ORDER DATED 31-03-2004 AND THERE IS NO FAILURE ON THE PAR T OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSA RY FOR FRAMING OF ASSESSMENT OF THIS ASSESSMENT YEAR. EVEN NOW BEFORE US, LD. SR -DR COULD NOT BRING ANY ARGUMENT OR EVIDENCE WHICH PROVES THAT THERE IS ANY FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL F ACTS NECESSARY FOR FRAMING OF ASSESSMENT OF THIS ASSESSMENT YEAR. IN SUCH EVENTUA LITY, WE ARE OF THE VIEW THAT THE RE-OPENING IS BAD IN LAW AND WE QUASH THE SAME. 7. THE NEXT ISSUE ON MERITS, THE ASSESSING OFFICER HAS RECORDED THE FACTS IN ASSESSMENT ORDER AND ADMITTED THE BLENDING IN VI EW OF THE DETAILS FILED BEFORE HIM AND THE RELEVANT FINDING OF THE AO ARE R E-PRODUCED BY US IN PARA-3 ABOVE, WHICH CLEARLY REVEALS THE MIND OF THE AO THA T HE HAS ACCEPTED THE BLENDING IN VIEW OF THE DETAILS FILED BEFORE HIM. THE RELEVANT DETAILS FILED BY LETTER DATED 25-06-2003 BEFORE THE AO, WHICH READS AS UNDER:- 1. WE ARE INTO THE BUSINESS OF EXPORTING BLENDED, B RANDED PACKET TEA / BLENDED TEA. THEREFORE, THE PRINCIPAL RAW MATERIAL IN OUR PROCESSING INDUSTRY IS TEA. 2. THE CHIEF SOURCE OF PROCUREMENT OF TEA OF VARIOU S GRADES FOR VARIOUS SEASONS IS FROM SIX DIFFERENT TEA AUCTION CENTRES O F INDIA VIZ., KOLKATA, ITA NO.2102,636,951,873,707, 221 & 2104 A.YS.01-02, 0 3-04 TO 05-06 M.K.INDS. V. ACIT / DCIT CC-XIII, KOL PAGE 6 SILIGURI, GUWAHATI, COCHIN, COONOOR AND COIMBATORE. APART FROM PURCHASES THROUGH AUCTIONS AS AFORESAID, THERE ARE INSTANCES OF BUYING TEA FROM PRIVATE PARTIES BUT THE QUANTITY AND AMOUN T INVOLVED IN SUCH PURCHASES FROM PRIVATE PARTIES WHEN COMPARED WITH T HE TOTAL PURCHASES, ARE VERY INSIGNIFICANT. THE AUCTION CENTRE WISE DET AILS OF PURCHASES OF TEA (BOTH IN TERMS OF QUANTITY AND ALSO IN MONETARY TERMS) HAVE BEEN SET OUT IN EXHIBIT-1 . 3. A BRIEF NOTE HAS BEEN PREPARED WHICH DESCRIBES T HE MAJOR STEPS OF PROCESSING OF MANUAL MIXING / BLENDING OF TEA, PACK ETING OF TEA TILL ITS SHIPMENT FOR EXPORT. THIS BRIEF NOTE ALSO CONTAINS A PHOTOGRAPHIC PRESENTATION AS APPEARING IN ANNEXURE-1 THROUGH ANN EXURE-7 OF THE MAJOR STEPS OF MANUAL PROCESSING OF TEA MIXING / BL ENDING AND PACKETING OF TEA MEANT FOR EXPORTS. THIS BRIEF NOTE ALONG WITH THE PHOTOGRAPHIC PRESENTATION APPEARS AS EXHIBIT-2. 4. INVOICE WISE DETAILS OF EXPORTS OF BLENDED TEA M ADE DURING THE FINANCIAL YEAR ENDED MARCH 31, 2001, DULY CERTIFIED BY OUR BANKERS, WHICH INTER ALIA GIVES DETAILS OF (A) INVOICE NO. ( B) INVOICE DATE (C) BANK REFERENCE (D) GR NO. (E) GR DATE (F) TOTAL NET WEIG HT IN KILOGRAM (G) VALUE IN US $ (H) TO WHOM PACKET TEA EXPORTED (I) B ILL OF LADING NUMBER (J) BILL OF LADING DATE (K) LETTER OF CREDIT NO. (M) DATE OF RECEIPT OF EXPORT PROCEEDS. THE WHOLE SET OF PAPERS HAVE BEEN MARKED AS EXHIBIT 3. DURING THE YEAR UNDER REFERE NCE THE ASSESSEE HAS NOT EFFECTED ANY SALE IN THE LOCAL MARKET. IN O THER WORDS, THE ENTIRE TURNOVER COMPRISES OF EXPORTS ONLY. 5. THE MANUAL PROCESS OF MIXING / BLENDING OF PACKE T TEA DOES NOT YIELD ANY BY-PRODUCTS OR SEMI-PROCESSED MATERIALS. 6. DURING THE FINANCIAL YEAR ENDED MARCH 31, 201, T HE ASSESSEE HAD OUT-SOURCE THE PROCESS OF MIXING / BLENDING OF TEA AND PACKETING THEREOF AT KOLKATA AT THEIR PLACES STATED IN THE EXHIBIT-4. THE SAME EXHIBIT ALSO INDICATES THE NAME AND ADDRESSES OF THE CONTRACTORS WHO HAD DONE THE ABOVE PROCESSING ACTIVITIES DURING THE FINANCIAL YE AR ENDED MARCH 31,2001, AT OUR RENTED PREMISES AT EL-1, MAHAPE M.I .D.C., NAVI MUMBAI 400 705. THE PAYMENTS TO THESE PARTIES HAV E BEEN MADE CHIEFLY BY ACCOUNT PAYEE CHEQUES 7 DRAFTS AND HAVE BEEN RECORDED INTO REGULAR BOOKS OF ACCOUNTS. HOWEVER, THE ANNUALIZED SUMMARY OF AMOUNT THUS CREDITED / PAID HAVE BEEN SET OUT IN EXHIBIT -4 . A SPECIMEN COPIES OF THE BILLS / CONTRACTS ARE APPENDED WITH T HIS EXHIBIT-4. IT IS TO BE NOTED THAT THE ENTIRE EXPENSES AMOUNTING TO RS.49,6 9,293 OF BLENDING / PACKETING / CLEARING ETC., HAVE BEEN CHARGED TO PRO FIT & LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31,2001 UNDER THE BROAD HE AD CLEARING & FORWARDING CHARGES. IT MAY BE NOTED THAT PRESENTLY THE ASSESSEE ITA NO.2102,636,951,873,707, 221 & 2104 A.YS.01-02, 0 3-04 TO 05-06 M.K.INDS. V. ACIT / DCIT CC-XIII, KOL PAGE 7 OPERATES AT D-1441, TTC INDUSTRIAL AREA, MIDC, SHIR WANE, NERUL, NAVI MUMBAI 400 706. AGGRIEVED ASSESSEE CAME IN APPEAL BEFORE US. 8. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MATERIALS PLACED BEFORE US. THE ASSESSEE CLAIMED EXEMPTION U/S.10B O F THE ACT FOR MANUFACTURING OF PACKED TEA FROM ITS 100% EOU. DURI NG THE COURSE OF ASSESSMENT PROCEEDING, ASSESSEE IN RESPONSE TO SPEC IFIC QUERY REGARDING AS TO HOW THE UNDERTAKING FULFILLED THE CRITERIA LAID DOWN U/S.10B OF THE ACT AND CLAIMED THAT IT IS MANUFACTURING PACKED TEA. ASSE SSEE-COMPANY REPLIED THAT IT WAS ENGAGED IN MANUFACTURING OF PACKED TEA THAT THE MANUFACTURING ACTIVITY WAS UNDERTAKEN IN 100% EOU AT FALTA. ASSESSEE CLAIM ED THAT IT HAS BEEN GIVEN BY MINISTRY OF COMMERCE A SANCTION OF 100% EO U OF GREEN CARD. BEFORE THE ASSESSING OFFICER, ASSESSEE FILED A SANCTION LE TTER OF 14-03-2000 ISSUED BY THE EPZ OF FALTA EXPORT PROCESSING ZONE AND IN THE PERMISSION LETTER OF 15- 09-2000 ISSUED BY THE EOU-NRI SECTION OF THE SECRET ARIAT FOR INDUSTRIAL ASSISTANCE OF THE DEPARTMENT OF INDUSTRIAL POLICY A ND PROMOTION UNDER THE MINISTRY OF COMMERCE AND INDUSTRY. THE ASSESSEE-COM PANY MANUFACTURED DURING THE FINANCIAL YEAR 2000-01 PACKED TEA. THE I NVOICES OF THE ASSESSEE- FIRM ALSO ENDORSE THIS FACT AND EACH INVOICES IS IS SUED UNDER THE SIGNATURE OF THE OFFICIAL OF THE DEPARTMENT OF CUSTOMS BEFORE THE MANUFACTURED PACKET TEA IS SHIPPED. BUT ACCORDING TO AO, THE ASSESSEE- COMPANY HAS NOT MANUFACTURED OR PRODUCED ANY ARTICLE OR THING BUT I T HAS ONLY BLENDED TEA AND FOR BLENDING ASSESSEE HAS FILED DETAILS. 9. BEFORE US LD. COUNSEL, SHRI S. JHAJHARIA DRAWN O UR ATTENTION TO ASSESSMENT ORDER AT PAGE-2, WHERE THE ASSESSING OFF ICER HAS NOTED THE FACT THAT THE ASSESSEE HAS FILED DETAILS AND THE SAME IS REPRODUCED ABOVE BY US. IN VIEW OF THE FACT THAT ASSESSEE HAS BLENDED TEA A ND COMPLETE DETAILS ARE FILED BEFORE THE AO, THE ISSUE IS SQUARELY COVERED IN FAVOUR OF ASSESSEE BY THE DECISION OF SPECIAL BENCH OF THIS TRIBUNAL IN THE C ASE OF MADHUJAYANTI ITA NO.2102,636,951,873,707, 221 & 2104 A.YS.01-02, 0 3-04 TO 05-06 M.K.INDS. V. ACIT / DCIT CC-XIII, KOL PAGE 8 INTERNATIONAL LTD. V. DCIT IN ITA NO. 1463/KOL/2007 AS REPORTED IN (2012) 137 ITD 377 (KOL) (SB), WHEREIN IT IS HELD AS UNDER:- 35. WE FIND FROM THE ABOVE FACTS AND CIRCUMSTANCES AND CASE LAW S RELIED ON BY BOTH THE SIDES THAT THE ASSESSEE WAS EXCLUSIVELY EN GAGED IN BLENDING, PACKAGING AND EXPORT OF TEA BAGS, TEA PACKETS AND BULK TEA PACKS. THE ASSESSEES DIVISION ENJOYS RECOGNITION AS A 100% EOU, WHICH IS GRANTED BY THE DEVELOPMENT COMMISSIONER, MINISTRY OF COMMERCE & INDUSTRY, GOVT. OF INDIA. TH E ASSESSEE CLAIMED EXEMPTION U/S. 10B OF THE ACT FOR AYS 2000-01 ONWARDS, WHICH WAS GRANTED UPTO THE AY 2003- 04. HOWEVER, FOR THE AY 2004-05, EXEMPTION WAS DEC LINED FOR THE REASONS THAT BY THE FINANCE ACT 2000, THE DEFINITION OF MANUFACTURE W HICH INCLUDED PROCESSING CONTAINED IN SECTION 10B OF THE ACT WAS DELETED W.E .F. 01.04.2001. THE ARGUMENT OF THE DEPARTMENT IS THAT MANUFACTURE OR PRODUCTION HA D LIBERAL MEANING UNDER THE DEFINITION CLAUSE CONTAINED IN SECTION 10B OF THE A CT UNTIL ITS DELETION WHICH COVERS EVEN PROCESSING AND, THEREFORE, BLENDING AND PACKAG ING OF TEA FOR EXPORT WAS TREATED AS MANUFACTURE OR PRODUCTION OF AN ARTICLE QUAL IFYING FOR EXEMPTION. WE ARE OF THE CONSIDERED VIEW THAT THE CONTENTION OF THE ASSE SSEE THAT THE SCHEME OF INCOME TAX EXEMPTION AVAILABLE TO UNITS IN THE SEZ U/S. 10A OF THE ACT AND UNITS IN THE FREE TRADE ZONE PROVIDED U/S. 10AA OF THE ACT AND THE EXEMPTIO N AVAILABLE TO 100% EOU U/S. 10B OF THE ACT ARE VERY SIMILAR IN NATURE AND THE W ORDINGS OF THE STATUTORY PROVISIONS ARE SIMILAR IN NATURE IS CORRECT. WE FIND THAT HON BLE KERALA HIGH COURT ALSO CONSIDERED THE JUDGMENT IN THE DECISION OF SUPREME COURT IN TARA AGENCIES, SUPRA RELIED ON BY THE LD. CIT, DR, WHEREIN HONBLE SUPRE ME COURT CLEARLY HELD THAT BLENDING OF TEA DOES NOT AMOUNT TO MANUFACTURE OR PRODUCTION OF AN ARTICLE, BUT IS ONLY PROCESSING. WE FIND THAT THE ASSESSEE WAS EXC LUSIVELY ENGAGED IN BLENDING AND PACKING OF TEA FOR EXPORT AND WAS NOT MANUFACTURING OR PRODUCING ANY OTHER ARTICLE OR THING. IT WAS RECOGNISED AS A 100% EOU DIVISION AND THE DEPARTMENT HAD NO CASE THAT THE ASSESSEE'S UNIT ENGAGED IN EXPORT OF TEA B AGS AND TEA PACKETS WAS NOT A 100% EOU. IF EXEMPTION WAS DENIED ON THE GROUND THAT PRO DUCTS EXPORTED WERE NOT PRODUCED OR MANUFACTURED IN THE INDUSTRIAL UNIT OF THE ASSESSEE'S 100% EOU, IT WOULD DEFEAT THE VERY OBJECT OF SECTIONS 10B OF THE ACT. 36. WE, IN VIEW OF THE ABOVE, HOLD THAT WHEN THE PR ODUCTS FOR WHICH THE ASSESSEES UNIT IS RECOGNIZED AS A 100% EOU ARE TEA BAGS, TEA IN PACKETS AND TEA IN BULK PACKS AND THE ASSESSEE IS EXCLUSIVELY ENGAGED IN BLENDING AND PACKING OF TEA FOR EXPORT MAY NOT BE MANUFACTURER OR PRODUCER OF ANY OTHER ARTICL E OR THING IN COMMON PARLANCE. HOWEVER, FOR THE PURPOSE OF SECTION 10A, 10AA AND 1 0B, WE HAVE TO CONSIDER THE DEFINITION OF THE WORD MANUFACTURE AS DEFINED IN SECTION 2(R) OF SEZ ACT, EXIM POLICY, FOOD ADULTERATION RULES, 1955, TEA (MARKETI NG) CONTROL ORDER, 2003, ETC. WE ALSO FIND THAT THE DEFINITION OF MANUFACTURE A S PER SECTION 2(R) OF THE SEZ ACT, 2005 IS INCORPORATED IN SECTION 10AA OF THE INCOME- TAX ACT WITH EFFECT FROM 10.02.2006. HONBLE KERALA HIGH COURT IN THE CASE OF GIRNAR INDUSTRIES (SUPRA) HAD HELD SUCH AMENDMENT IN SECTION 10AA TO BE OF CLARIF ICATORY IN NATURE. THE DEFINITION OF MANUFACTURE UNDER THE SEZ ACT, EXIM POLICY, FO OD ADULTERATION RULES AND TEA (MARKETING) CONTROL ORDER IS MUCH WIDER THAN WHAT I S THE MEANING OF THE TERM MANUFACTURE UNDER THE COMMON PARLANCE, AND IT INC LUDES PROCESSING, BLENDING, PACKAGING ETC. IN VIEW OF THE ABOVE AND RESPECTFUL LY FOLLOWING THE DECISION OF HONBLE KERALA HIGH COURT IN THE CASE OF GIRNAR IND USTRIES (SUPRA) AND TATA TEA LIMITED (SUPRA), WE HOLD THAT THE ASSESSEE IS ENTIT LED FOR EXEMPTION UNDER SECTION 10B OF THE ACT ON ACCOUNT OF BLENDING OF TEA. SIMILARL Y, IN OUR VIEW, THE INDUSTRIAL UNITS ITA NO.2102,636,951,873,707, 221 & 2104 A.YS.01-02, 0 3-04 TO 05-06 M.K.INDS. V. ACIT / DCIT CC-XIII, KOL PAGE 9 ENGAGED IN THE VERY SAME ACTIVITY I.E. BLENDING, PA CKING AND EXPORT OF TEA IN THE FREE TRADE ZONE SHALL ALSO BE ENTITLED TO ENJOY TAX EXEM PTION UNDER SECTION 10A OF THE ACT. 37. ACCORDINGLY, WE ANSWER THE QUESTION REFERRED IN FAVOUR OF THE ASSESSEE BY HOLDING THAT THE ASSESSEES WHO ARE IN THE BUSINESS OF BLENDING AND PROCESSING OF TEA AND EXPORT THEREOF, IN 100% EOUS ARE MANUFACTURER/ PRODUCER OF THE TEA FOR THE PURPOSE OF CLAIMING EXEMPTION U/S.10B OF THE ACT. FURTHER, ASSESSEES WHO ARE IN THE BUSINESS OF BLENDING AND PROCESSING OF TEA IN RESPE CT OF UNDERTAKINGS IN FREE TRADE ZONES ARE MANUFACTURER/PRODUCER OF TEA FOR THE PURP OSE OF CLAIMING EXEMPTION U/S. 10A OF THE ACT. WE HAVE EXAMINED AND DISCUSSED THE FACTS IN THE CASE OF MADHU JAYANTI INTERNATIONAL LTD. AND FOUND THAT THERE IS BLENDING OF TEA AND CONSEQUENTLY THE ASSESSEE IS ELIGIBLE FOR EXEMPTION U/S. 10B OF THE ACT AS PRAYED FOR. THEIR APPEAL FOR THE AY 2004-05 IS ALLOWED. AS REGARDS OTHER APPEALS AND THAT OF THE INTERVENERS, THE MATTERS ARE RESTORED BACK TO THE DIVISION BENCH, WI TH DIRECTIONS TO DECIDE THOSE APPEALS IN THE LIGHT OF PRINCIPLE LAID DOWN HEREIN, SO FAR AS THE CLAIM FOR RELIEF U/S. 10A OR 10B OF THE ACT IN ACCORDANCE WITH LAW. 10. AS THE FACTS AND CIRCUMSTANCES ARE EXACTLY IDEN TICAL, AS WHAT WAS BEFORE SPECIAL BENCH IN THE CASE OF MADHUJAYANTI INTERNATIONAL LTD. (SUPRA), TAKING A CONSISTENT VIEW, WE ALLOW THE CLAIM OF THE ASSESSEE. AS WE HAVE ALLOWED THE CLAIM OF EXEMPTION U/S10B OF THE ACT, W E NEED NOT TO GO INTO THE ISSUE OF DEDUCTION U/S.80HHC OF THE ACT AS THE SAME HAVE BECOME INFRUCTUOUS. BOTH THE PARTIES ALSO CONCEDED THE ISS UE OF DEDUCTION U/S.80HHC OF THE ACT. 11. NOW WE WILL DEAL WITH REVENUES APPEAL. REVENU E HAS RAISED FOLLOWING GROUNDS. 1. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FAC T IN RECTIFYING HIS EARLIER ORDER BY ALLOWING THE ALTERNATIVE CLAIM OF DEDUCTION U/S. 80HHC, WHEREAS THE MAIN CLAIM OF THE ASSESSEE WAS DEDUCTIO N U/S.10B, WHICH WAS DENIED AS THE ASSESSEE WAS NOT ENTITLED TO SUCH DEDUCTION. 2. IN DOING SO, THE LD. CIT(A) HAS ERRED IN LAW AND ON FACT IN NOT APPRECIATING THAT BY FILING THE SPECIAL AUDIT IN RE PORT FORM NO.10CCAC THE ASSESSEE SATISFIED ONE OF THE CONDITIONS FOR CL AIMING THE DEDUCTION U/S. 80HHC WHEREAS NO FINDING WAS GIVEN ON THE OTHE R CONDITIONS, NAMELY AS TO WHETHER ASSESSEES TURNOVER COMPRISED OF EXPORT ONLY AND FOREIGN EXCHANGE REMITTANCE RECEIVED AS CERTIFIED B Y THE BANK, ARE REQUIRED TO BE SATISFIED FOR THE DEDUCTION U/S. 80H HC. ITA NO.2102,636,951,873,707, 221 & 2104 A.YS.01-02, 0 3-04 TO 05-06 M.K.INDS. V. ACIT / DCIT CC-XIII, KOL PAGE 10 12. SINCE WE HAVE ALREADY ALLOWED THE APPEAL OF ASS ESSEE ON THE RE- OPENING ASSESSMENT, HENCE, THE ISSUE OF REVENUES A PPEAL AS REGARDS TO DEDUCTION U/S. 80HHC OF THE ACT HAS BECOME INFRUCTU OUS, WHICH NEEDS NO ADJUDICATION. 13. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED AN D THAT OF REVENUE IS DISMISSED. NOW COMING TO ITA NO./951/KOL/2008 OF ASSESSEES AP PEAL.. 14. THIS APPEAL BY ASSESSEE IS ARISING OUT OF THE ORDER OF CIT CC-II, KOLKATA U/S. 263 OF THE ACT VIDE ORDER DATED 10-03- 2008 FOR THE ASSESSMENT YEAR 2003-04. THE ONLY ISSUE IN THIS APPEAL OF ASSE SSEE IS AGAINST THE REVISION ORDER PASSED U/S.263 OF THE ACT DIRECTING THE AO TO WITHDRAW EXEMPTION U/S 10B OF THE ACT. 15. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE ST ATED THAT THIS ISSUE OF BLENDING, WHETHER BLENDING IS MANUFACTURING OR PROD UCTION OR NOT? ACCORDING TO HIM, THIS ISSUE IS SETTLED IN ASSESSEES OWN CAS E BY THIS TRIBUNAL IN ITA NO. 1173/KOL/2007 DATED 09-01-2012 IN IMMEDIATELY PRECEDING AY I.E. AY 2002- 03, WHEREIN SIMILAR REVISION PROCEEDINGS WERE UNDER TAKEN BY THE CIT CC KOLKATA AND HONBLE TRIBUNAL VIDE ORDER DATED 09-01 -2012 QUASHED REVISION ORDER PASSED U/S. 263 OF THE ACT VIDE PARA 8 AND 9 AS UNDER:- 8 IN VIEW OF THE ABOVE FACTS AND CASE LAWS OF TATA TEA LTD. AND GIRNAR INDUSTRIES (SUPRA), AS REFERRED BY THE LD. COUNSEL THE CASE LAW OF HONBLE SUPREME COURT IN THE CASE OF MALABAR INDUST RIAL CO. LTD. VS. CIT (2000) 243 ITR 83 (SC), IS APPLICABLE TO THE FA CTS OF THIS CASE. HONBLE SUPREME COURT HAS CONSIDERED THE PHRASE PR EJUDICIAL TO THE INTEREST OF THE REVENUE,, AND INTERPRETED THAT IT HAS TO BE READ IN CONJUNCTION WITH AN ERRONEOUS ORDER PASSED BY THE A O AND INTERPRETED THAT IT HAS TO BE READ IN CONJUNCTION WITH AN ERRON EOUS ORDER PASSED BY THE AO AND EVERY LOSS OF REVENUE AS CONSEQUENCE OF AN ORDER OF AO, IT CANNOT BE TREATED AS PREJUDICIAL TO THE INTEREST OF REVENUE. HONBLE SUPREME COURT DISCUSSED EXAMPLE, WHERE THE AO ADOPT ED ONCE OF THE COURSES PERMISSIBLE IN LAW AND IT HAS RESULTED IN L OSS OF REVENUE, OR WHERE TWO VIEWS ARE POSSIBLE AND HE HAS TAKEN ONE VIEW WITH WHICH ITA NO.2102,636,951,873,707, 221 & 2104 A.YS.01-02, 0 3-04 TO 05-06 M.K.INDS. V. ACIT / DCIT CC-XIII, KOL PAGE 11 THE COMMISSIONER DOES NOT AGREE, IT CANNOT BE TREAT ED THAT THE ASSESSMENT ORDER IS ERRONEOUS SO AS TO PREJUDICIAL TO THE INTEREST OF REVENUE UNLESS THE VIEW TAKEN BY AO IS UNSUSTAINABL E IN LAW. WE HAVE GONE THROUGH THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF MALABAR INDUSTRIAL CO. LTD. (SUPRA) AND FIND THAT T HIS PHRASE PREJUDICIAL TO THE INTEREST OF REVENUE, WHERE ONE OF THE POSSI BLE VIEWS IS TAKEN BY THE AO, HAS BEEN INTERPRETED AS UNDER: THE PHRASE PREJUDICIAL TO THE INTERESTS OF THE RE VENUE HAS TO BE READ IN CONJUNCTION WITH AN ERRONEOUS ORDER PASSED BY THE ASSESSING OFFICER. EVERY LOSS OF REVENUE AS A CONSE QUENCE OF AN ORDER OF THE ASSESSING OFFICER CANNOT BE TREATED AS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. FOR EXAMPLE, WHEN AN INCOME-TAX OFFICER ADOPTED ONE OF THE COURSES PERMISSIBLE IN L AW AND IT HAS RESULTED IN LOSS OF REVENUE; OR WHERE TWO VIEWS ARE POSSIBLE AND THE INCOME-TAX OFFICER HAS TAKEN ONE VIEW WITH WHIC H THE COMMISSIONER DOES NOT AGREE, IT CANNOT BE TREATED A S AN ERRONEOUS ORDER PREJUDICIAL TO THE INTERESTS OF THE REVENUE, UNLESS THE VIEW TAKEN BY THE INCOME-TAX OFFICER IS UNSUSTAINABLE IN LAW. IT HAS BEEN HELD BY THIS COURT THAT WHERE A SUM NOT EARNED BY A PERSON IS ASSESSED AS INCOME IN HIS HANDS ON H IS SO OFFERING, THE ORDER PASSED BY THE ASSESSING OFFICER ACCEPTING THE SAME AS SUCH WILL BE ERRONEOUS AND PREJUDICIAL TO T HE INTERESTS OF THE REVENUE. RAMPYARI DEVI SARAOGI V. CIT [1968] 67 ITR 84 (SC) AND IN SMT. TARA DEVI AGGARWAL V. CIT [1973] 88 ITR 323 (SC). 9. WE FIND \FROM THE ASSESSMENT ORDER PASSED U/S 14 3(3) OF THE ACT AFTER DUE CONSIDERATION OF FACTS AS WELL AS THE REV ISION ORDER OF CIT PASSED U/S 263 OF THE ACT THAT THERE IS NO DISPUTE REGARDING THE FACT THAT THE ASSESSEE IS EXCLUSIVELY ENGAGED IN BLENDING AND PACKAGING OF TEA FOR EXPORT AND IS NOT MANUFACTURING OR PRODUCING AN Y OTHER ARTICLE OR THING BUT STILL IT IS RECOGNISED AS A 100% EOU UNIT BY A BOARD APPOINTED BY CENTRAL GOVERNMENT IN EXERCISE OF POWERS CONFERR ED U/S. 40 OF THE INDUSTRIES (DEVELOPMENT & REGULATION) ACT, 1951 AND THE RULES MADE THEREUNDER. THIS RECOGNITION IS WITHIN THE MEANING OF TERM CONTAINED IN THE DEFINITION CLAUSE OF SECTION 10B OF THE ACT AND IT IS NOT THE CASE OF REVENUE THAT ASSESSEES UNIT IS NOT ENGAGED IN EXPO RT OF TEA BAGS OR TEA PACKETS OR IS NOT A 100% EOU UNIT. FURTHER, IT IS A WORSE POSITION THAT THE ASSESSEE WAS EVEN DENIED DEDUCTION U/S. 80HHC O F THE ACT WHICH IS AVAILABLE TO MERCHANT EXPORTER, WHICH THE ASSESS EE IS. HENCE, WE ARE OF THE VIEW THAT THE AO WHILE FRAMING ASSESSMENT HA S TAKEN A POSSIBLE VIEW AND IN TERM OF THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF MALABAR INDUSTRIAL CO. LTD. (SUPRA), THE AO HAS TAKEN THE COURSE PERMISSIBLE IN LAW AND WHERE TWO VIEWS ARE POSSIBLE AND THE AO HAS TAKEN ONE VIEW, WITH WHICH THE CIT DOES NOT AGREE, IT CANNOT BE SAID ITA NO.2102,636,951,873,707, 221 & 2104 A.YS.01-02, 0 3-04 TO 05-06 M.K.INDS. V. ACIT / DCIT CC-XIII, KOL PAGE 12 THAT THE ASSESSMENT ORDER IS ERRONEOUS SO AS TO PRE JUDICIAL TO THE INTEREST OF REVENUE. IN THE PRESENT CASE ALSO THE V IEW TAKEN BY THE AO IS NOT UNSUSTAINABLE RATHER IT IS A VIEW WHICH IS SUST AINABLE IN VIEW OF THE DECISION OF HONBLE KERALA HIGH COURT IN THE CASES OF TATA TEA LTD. AND GIRNAR INDUSTRIES (SUPRA). IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANC ES, WE HOLD THAT REVISION ORDER PASSED U/S. 263 OF THE ACT IS NOT SUSTAINABLE IN LAW AND HENCE, QUASHED. LD. COUNSEL FOR THE ASSESSEE STATED THAT SIMILAR AR E THE FACTS ARE IN THE PRESENT CASE ALSO WHEREIN DURING THE YEAR UNDER CON SIDERATION, THE ASSESSEE- FIRM HAS CLAIMED EXEMPTION U/S. 10B OF THE ACT IN R ESPECT OF PROFIT DERIVE FROM 100% EOU WHICH HAS BEEN ENGAGED IN MANUFACTURING O F PACKED TEA. EVEN ON MERITS, LD. COUNSEL FOR THE ASSESSEE STATED THAT THIS ISSUE IS NOW COVERED OF ASSESSEES OWN CASE IN OTHER AY ALSO, WHICH WE N EED NOT TO REPRODUCE AGAIN, AS THE ORDER OF SPECIAL BENCH IN THE CASE OF MADHUJAYANTI INTERNATIONAL LTD. (SUPRA), WHEREIN THE TRIBUNAL HAS ALLOWED THE CLAI M OF EXEMPTION U/S. 10B OF THE ACT IN THE CASE OF THE ASSESSEE. AS THE ISSU E IS SQUARELY COVERED, EVEN ON MERITS, WE QUASH THIS REVISION PROCEEDINGS U/S. 263 OF THE ACT AND ALLOW THE APPEAL OF ASSESSEE. 16. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. NOW ASSESSEES APPEAL IN ITA NO. 707/KOL/2009 AND R EVENUES APPEAL IN ITA NO.873/KOL/2009. 17. THESE CROSS-APPEALS ARE ARISING OUT OF ORDER OF CIT(A) CC-II, KOLKATA IN APPEAL NO. 134/CC-II-13/CIT-C-II/80 DATED 05-03-200 9. ASSESSMENT ORDER FRAMED BY DCIT CC-XIII FOR ASSESSMENT YEAR 2003-04 VIDE HIS ORDER DATED 30- 12-2008 U/S. 263 R.W.S. 143(3) OF THE ACT TO GIVE E FFECT TO THE ORDER OF CIT CC PASSED U/S. 263 OF THE ACT. IN APPEAL OF ASSESSEE, THE ISSUE IS REGARDING DISALLOWANCE OF CLAIM OF EXEMPTION U/S. 10B OF THE ACT AND THE RELEVANT GROUND NO.2 READS AS UNDER:- 2. THAT THE REJECTION OF THE APPELLANTS CLAIM FOR EXEMPTION U/S. 190B OF THE ACT FOR THE ASSESSMENT YEAR 2003-2004 IN THE SU M OF RS.8,18,09,141, IS ARBITRARILY MADE WITHOUT ANY REL EVANCE TO THE FACTS. ITA NO.2102,636,951,873,707, 221 & 2104 A.YS.01-02, 0 3-04 TO 05-06 M.K.INDS. V. ACIT / DCIT CC-XIII, KOL PAGE 13 IN REVENUES APPEAL, THE FOLLOWING ARE THE THREE GR OUNDS:- 1. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FAC T ALLOWING CLAIM OF DEDUCTION U/S. 80HHC, WHEREAS THE MAIN CLAIM OF THE ASSESSEE WAS DEDUCTION U/S. 10B, WHICH WAS DENIED AS THE ASSESSE E WAS NOT ENTITLED TO SUCH DEDUCTION. 2. IN DOING SO, THE LD. CIT(A) HAS ERRED IN LAW AND ON FACT ION FOLLOWING HIS ORDER U/S. 154 FOR AY 2001-02 IN THE CASE OF TH E ASSESSEE IN NOT APPRECIATING THAT THE ORDER RELIED UPON BY THE LD. CIT(A) WAS NOT ACCEPTED BY THE DEPARTMENT AND SECOND APPEAL WAS FI LED, WHICH IS SUB JUDICE. 3. IN DOING SO, THE LD. CIT(A) HAS ERRED IN LAW AND ON FACT ALLOWING THE DEDUCTION U/S. 80HHC IN NOT APPRECIATING THAT TAN I DENTICAL ISSUE IS SUB JUDICE BEFORE THE HONBLE TRIBUNAL IN THE CASE OF T HE ASSESSEE FOR AY 2004-05 AND ALSO OTHER YEARS AND THE MATTER HAS NOT YET REACHED FINALITY. 18. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE FAI RLY CONCEDED THAT THE TRIBUNAL HAS ALREADY QUASHED THE REVISION PROCEEDIN GS U/S. 263 OF THE ACT AND AS WE QUASH THE REVISION PROCEEDINGS, THESE CONSEQU ENT APPEALS IN RESPONSE TO ASSESSMENT FRAMED U/S. 263 R.W.S. 143(3) OF THE ACT HAVE BECOME INFRUCTUOUS AND ACADEMIC. HENCE, NEED NO ADJUDICATI ON. 19. IN THE RESULT, APPEAL OF ASSESSEE AND THAT OF R EVENUE IS DISMISSED. COMING TO ASSESSEES APPEALS IN ITA NOS. 221 & 2104 /KOL/2008. 20. THESE TWO APPEALS BY ASSESSEE ARE ARISING OUT O F DIFFERENT ORDERS OF COMMISSIONER OF INCOME-TAX (APPEALS)-CENTRAL-II, KO LKATA IN APPEALS NO. 271,106/CC-XIII/CIT(A)/C-II/06-07/07-08 DATED 18-12 -2007 AND 27-03-2008. ASSESSMENTS WERE FRAMED U/S. 143(3) OF THE ACT VIDE ORDER DATED 22-12-2006 AND 28-12-2007 BY DCIT/ACIT FOR THE ASSESSMENT YEAR S 2004-05 & 2005-06 RESPECTIVELY. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS IN BOTH THE YEARS:- 2. THAT THE REJECTION OF THE APPELLANTS CLAIM FOR EXEMPTION U/S. 10B OF THE ACT FOR THE ASSESSMENT YEAR 2004-2005 IN THE SU M OF RS.6,49,38,617, IS ARBITRARILY MADE WITHOUT ANY REL EVANCE TO THE FACTS. ITA NO.2102,636,951,873,707, 221 & 2104 A.YS.01-02, 0 3-04 TO 05-06 M.K.INDS. V. ACIT / DCIT CC-XIII, KOL PAGE 14 3. THAT THE LEVY OF INTEREST OF RS.71,97,861 IN T ERMS OF SECTION 234B OF THE ACT FOR THE ASSESSMENT YEAR 2004-2005, IS ARBIT RARY AND WITHOUT ANY RELEVANCE TO THE FACTS. 4. THAT CHARGING OF INTEREST UNDER SECTION 234D IN THE SUM OF RS.42,132 FOR THE ASSESSMENT YEAR 2004-2005, IS ARB ITRARY AND WITHOUT ANY RELEVANCE TO THE FACTS. AY.2005-06 2. THAT THE REJECTION OF THE APPELLANTS CLAIM FO R EXEMPTION U/S. 10B OF THE ACT FOR THE ASSESSMENT YEAR 2005-2006 IN THE SU M OF RS.1,77,99,295, IS ARBITRARILY MADE WITHOUT ANY REL EVANCE TO THE FACTS. 21. ON MERITS THIS ISSUE OF EXEMPTION U/S.10B OF TH E ACT IS ALREADY DECIDED IN FAVOUR OF ASSESSEE IN ASSESSEES APPEAL IN AY 20 01-02 BY FOLLOWING THE CASE LAW IN THE CASE OF MADHUJAYANTI INTERNATIONAL LTD. (SUPRA). AS REGARDS TO THE ISSUE OF CHARGING OF INTEREST U/S. 234B AND 234 D, THIS IS IN THE NATURE OF CONSEQUENTIAL AND AO WILL DETERMINE ACCORDINGLY. I N VIEW OF THE FACTS AND CIRCUMSTANCES, WHICH ARE EXACTLY IDENTICAL IN THE P RESENT APPEALS, HENCE TAKING A CONSISTENT VIEW, WE ALLOW THESE APPEALS OF ASSESSEE. 22. IN THE RESULT, BOTH THE APPEALS OF ASSESS EE ARE ALLOWED. 23. IN COMBINED RESULT, APPEALS OF ASSESSEE ARE ALLOWED AND THAT OF REVENUES ARE DISMISSED. . ORDER PRONOUNCED IN THE OPEN COURT 19 /12/ 2013 SD/- SD/- (ABRAHAM P GORGE) ( MAHAVIR SINGH) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) KOLKATA, *DKP #$%- 19 /12/2013 + ITA NO.2102,636,951,873,707, 221 & 2104 A.YS.01-02, 0 3-04 TO 05-06 M.K.INDS. V. ACIT / DCIT CC-XIII, KOL PAGE 15 ' ' ' ' ,,- ,,- ,,- ,,- .- .- .- .- / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. $0$,1 2 / CONCERNED CIT 4. 2- / CIT (A) 5. - 56 ,,,1, ,1!, / DR, ITAT, KOLKATA 6. 69: ;< / GUARD FILE. BY ORDER/ ' , =/> $ ,1!, +