Deputy Commissioner of Income Tax, Hyderabad V. M/s Siva Shankar Minerals Ltd., Khammam

ITA 256/HYD/2012

• Counselvise Citation: 25622514 RSA 2012
• Duration Of Justice: 2 year(s) 5 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2003-2004
• Appeal Filed On: 17-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRIP SOMA SEKHAR REDDY
• Assessee Lawyers: M V ANIL KUMAR; A V SADASIVA
• Keywords: Wrong claim
• Section: 10B

Judgement Text

1 ITA NOS. 256 TO 261/HYD/2012 M/S SIVA SHANKAR MINERALS LTD. IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NOS. 256, 257, 258, 259, 260 & 261 /HYD/2012 A.YS.: 2003-04, 2004-05, 2005-06, 2007-08, 200 8-09 & 2009-10 DY. COMMISSIONER OF INCOME- TAX, CENTRAL CIRCLE 5, HYDERABAD .M/S SIVA SHANKAR MINERALS LTD., KHAMMAM. PAN AACCS5388N (APPELLANT) (RESPONDENT) REVENUE BY SHRIP. SOMA SEKHAR REDDY ASSESSEE BY SHRI A.V. SADASIVA & SHRI M.V. ANIL KUMAR DATE OF HEARING 15-07-2014 DATE OF PRONOUNCEMENT 08-08-2014 O R D E R PER BENCH: THESE ARE SIX APPEALS ALL BY THE DEPARTMENT AGAINS T THREE SEPARATE ORDERS OF THE CIT(A) PERTAINING TO ASSESSM ENT YEARS 2003-04 TO 2005-06 AND 2007-08 TO 2009-10. ITA NO. 256/HYD/2012 TO 259/HYD/2012 2. ALL THESE APPEALS HAVE BEEN FILED ON THE FOLLOWI NG COMMON GROUND: 3. GROUND NO. 1 & 6 BEING GENERAL IN NATURE ARE NO T REQUIRED TO BE ADJUDICATED UPON. 2 ITA NOS. 256 TO 261/HYD/2012 M/S SIVA SHANKAR MINERALS LTD. 4. THE ISSUE RAISED IN GROUND NO. 2 & 3 IS IN RESPE CT OF DISALLOWANCE MADE AT 25% BY THE AO OUT OF THE TOTAL EXPENDITURE CLAIMED UNDER THE HEAD MINING AND PROCESSING CHARG ES, WHICH WAS REDUCED TO 10% BY THE CIT(A). 5. FACTS BEING COMMON, WE DEAL WITH THE FACTS AS IN VOLVED IN ITA NO. 256/HYD/2012. BRIEFLY THE FACTS RELATING TO THE ISSUE IN DISPUTE ARE, ASSESSEE IS A COMPANY. PURSUANT TO A SEARCH AN D SEIZURE OPERATION CONDUCTED IN THE BUSINESS PREMISES OF M/S GVPR ENGINEERS LTD., AO ISSUED A NOTICE U/S 153C OF THE ACT CALLING FOR THE RETURN OF INCOME FROM THE ASSESSEE. IN RESPONSE TO THE SAID NOTICE, ASSESSEE FILED RETURN OF INCOME ON 17/10/2009 DECL ARING LOSS OF RS. 24,96,330/- AS WAS SHOWN IN THE ORIGINAL RETURN FIL ED BY HIM EARLIER ON 01/12/2013. IN COURSE OF ASSESSMENT PROCEEDING, THE AO WHILE EXAMINING THE PROFIT & LOSS ACCOUNT NOTICED THAT TH E ASSESSEE HAS DEBITED AN AMOUNT OF RS. 43,22,000/- TOWARDS MINING AND PROCESSING EXPENSES. IN RESPONSE TO THE QUERY RAISED BY THE AO ASSESSEE PRODUCED BILLS AND VOUCHERS IN SUPPORT OF THE EXPEN DITURE CLAIMED. HOWEVER, AO ON VERIFYING THE SAME NOTICED THAT SOME OF THE VOUCHERS ARE SELF-MADE AND DO NOT CONTAIN IDENTITY OF THE PA YEE, QUANTUM OF WORK ETC. AND THE PAYMENTS ARE MOSTLY MADE IN CASH. BY OBSERVING THAT THE ASSESSEE HAS NOT DISCHARGED THE ONUS OF PR OVING THE CLAIM OF EXPENDITURE FULLY AND SATISFACTORILY, HE DISALLOWED 25% OUT OF TOTAL EXPENDITURE CLAIMED AND ADDED AN AMOUNT OF RS. 10,8 0,525/-. BEING AGGRIEVED OF SUCH ADDITION, ASSESSEE PREFERRED APPE AL BEFORE THE CIT(A). 6. THE CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE VIS--VIS FACTS AND MATERIALS ON RECORD, FOUND THAT THE AO RESORTED TO ESTIMATION WITHOUT BRINGING SPECIFIC INFORMATION OR EVIDENCE ON RECORD. HE ALSO OBSERVED THAT THE DISALLOWANCES WER E NOT BASED ON ANY DEFECTS POINTED OUT IN MAINTENANCE OF BOOKS OF ACCOUNT OR BILLS FOR EXPENDITURE. HOWEVER, TAKING INTO ACCOUNT POSSI BLE INFLATION OF 3 ITA NOS. 256 TO 261/HYD/2012 M/S SIVA SHANKAR MINERALS LTD. EXPENDITURE BY THE ASSESSEE, THE CIT(A) REDUCED THE DISALLOWANCE TO 10% OUT OF THE TOTAL EXPENDITURE CLAIMED BY THE AS SESSEE. 7. WE HAVE HEARD THE SUBMISSIONS OF THE PARTIES AND PERUSED THE MATERIAL ON RECORD AS WELL AS THE ORDERS OF THE REV ENUE AUTHORITIES. ON A BARE PERUSAL OF THE ASSESSMENT ORDER IT BECOME S CLEAR THAT AO HIMSELF HAS NOTED THAT OUT OF THE TOTAL EXPENDITURE CLAIMED BY THE ASSESSEE SOME OF THE EXPENDITURE WERE FOUND TO BE T HROUGH SELF- MADE VOUCHERS. HOWEVER, IT IS NOT KNOWN WHETHER AO HAS CONDUCTED ANY ENQUIRY OR CALLED FOR EXPLANATION FROM THE ASSE SSEE IN RESPECT OF THE ALLEGED DEFECTS AND DEFICIENCIES FOUND IN THE B ILLS AND VOUCHERS. IT IS ALSO A FACT THAT HE HAS NOT POINTED OUT ANY S PECIFIC DEFECTS AND DEFICIENCIES IN THE BOOKS OF ACCOUNT. THE CIT(A) AF TER CONSIDERING ALL THESE ASPECTS AND ALSO TAKING INTO CONSIDERATION TH E POSSIBLE INFLATION IN EXPENDITURE BY THE ASSESSEE HAS SUSTAINED THE DI SALLOWANCE AT 10% OUT OF THE TOTAL EXPENDITURE CLAIMED. HAVING PE RUSED THE ORDER OF THE CIT(A) IN THE CONTEXT OF FACTS AND MATERIALS ON RECORD, WE ARE OF THE VIEW THAT THE ORDER PASSED BY THE CIT(A) IN RES TRICTING THE DISALLOWANCE TO 10% IS FAIR AND REASONABLE AND NEE D NOT BE INTERFERED WITH. ACCORDINGLY, WE UPHOLD THE SAME B Y DISMISSING GROUND RAISED BY THE REVENUE. 8. THE NEXT ISSUE AS RAISED IN GROUND NOS. 4 & 5 IS IN RESPECT OF CIT(A) DELETING THE ADDITION MADE BY THE AO ON ACCO UNT OF DISALLOWANCE OF ADMINISTRATIVE EXPENSES. 9. BRIEFLY, THE FACTS ARE, AO DURING THE ASSESSMENT PROCEEDING NOTICED THAT THE ASSESSEE HAS CLAIMED RS. 11,01,838 /- TOWARDS SALARIES AND OTHER BENEFITS TO EMPLOYEES UNDER THE HEAD ADMINISTRATIVE EXPENSES. IN RESPONSE TO THE QUERY MADE BY THE AO, ASSESSEE PRODUCED BILLS AND VOUCHERS IN RESPECT OF THE EXPENDITURE CLAIMED. AO ON IDENTICAL REASONING AS WAS MADE IN C ASE OF MINING AND PROCESSING EXPENSES DISALLOWED 25% OUT OF THE T OTAL EXPENDITURE 4 ITA NOS. 256 TO 261/HYD/2012 M/S SIVA SHANKAR MINERALS LTD. CLAIMED. THE DISALLOWANCE WAS CHALLENGED IN APPEAL BEFORE THE CIT(A). THE CIT(A) AFTER CONSIDERING THE SUBMISSION S OF THE ASSESSEE AND EXAMINING THE FACTS AND MATERIALS ON RECORD WAS OF THE VIEW THAT DISALLOWANCE MADE WAS NOT JUSTIFIED AND ACCORDINGLY DELETED THE SAME BY HOLDING AS UNDER: 8.5 THE SUBMISSIONS OF THE APPELLANT AND THE OBSERV ATIONS OF THE AO ARE PERUSED. AS CONTENDED BY THE APPELLANT, THE AO REVISITED THE EXPENSES UNDER THE HEAD WHICH WAS ALR EADY ACCEPTED. FOR SAKE OF COMPLETING THE SEARCH ASSESSM ENTS AND THAT TOO WITHOUT ANY EVIDENCE FOUND IN SEARCH RELAT ED TO IT, THE AO MADE THE DISALLOWANCES. AS INDICATED, THE AMOUNT S UNDER THE HEAD ADMINISTRATIVE EXPENSES, REPRESENT SALAR IES AND OTHER BENEFITS TO EMPLOYEES, APART FROM OTHER MINOR EXPENSES. SALARIES AND OTHER BENEFITS ARE GENERALLY GOVERNED BY OTHER RELEVANT STATUTES SUCH AS ESIC AND EPF AND APPLICAB LE TO BIG EMPLOYERS LIKE THE APPELLANT UNDER REFERENCE. THERE ARE NO VERIFICATIONS/ENQUIRIES WHATSOEVER CONDUCTED BY THE AO, TO POINT OUT THE OVERSTATEMENT OR THE WRONGFUL NATURE OF THE CLAIMS UNDER THE HEAD. UNDER THE CIRCUMSTANCES, THE DISALL OWANCES ARE NOT JUSTIFIED. GENERALLY, LACK OF INFORMATION O R ENQUIRY LEADS TO ESTIMATION BUT ESTIMATION WITHOUT ANY INFORMATIO N MAY LEAD TO ABSURDITY. UNDER THIS HEAD OF DISALLOWANCES, THE BA SIC INFORMATION REQUIRED WAS NOT BROUGHT ON THE RECORD BY THE AO, TO ENABLE HIM TO RESORT TO ESTIMATION. HENCE, THE D ISALLOWANCES MADE BY THE AO UNDER THIS HEAD OF EXPENSES, FOR ALL THE THREE YEARS, STAND DELETED. 10. HAVING CONSIDERED THE SUBMISSIONS OF THE PARTIE S AND PERUSED THE MATERIALS ON RECORD AS WELL AS THE ORDERS OF TH E REVENUE AUTHORITIES, WE DO NOT FIND ANY INFIRMITY IN THE OR DER OF CIT(A) IN DELETING THE ADDITION MADE BY THE AO. UNDISPUTEDLY, THE EXPENDITURE INCURRED IS TOWARDS SALARIES AND BENEFITS PAID TO T HE EMPLOYEES. THAT BEING THE CASE, THERE IS LITTLE SCOPE FOR THE ASSES SEE TO INFLATE EXPENDITURE OR MAKE ANY BOGUS CLAIM. IN THE AFORESA ID VIEW OF THE MATTER, AO WAS NOT JUSTIFIED IN MAKING ADHOC DISALL OWANCE OF 25% OUT OF THE TOTAL EXPENDITURE CLAIMED WITHOUT BRINGING A NY EVIDENCE ON RECORD THAT THE EXPENDITURE CLAIMED IS EITHER BOGUS OR NOT SUPPORTED BY EVIDENCE. ACCORDINGLY, WE UPHOLD THE ORDER OF TH E CIT(A) BY DISMISSING THE GROUND RAISED. 5 ITA NOS. 256 TO 261/HYD/2012 M/S SIVA SHANKAR MINERALS LTD. ITA NOS. 260 & 261/HYD/2012 11. BOTH THESE APPEALS HAVE BEEN FILED ON THE FOLLO WING COMMON EFFECTIVE GROUNDS: 2. THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ENTIRE D ISALLOWANCE MADE U/S 10B OF IT ACT AS THE ASSESSEE COULD NOT GI VE ANY PROOFS OF ITS MANUFACTURING ACTIVITY CLEARLY DEPICT ING THE PROCESS MADE/INVOLVED MAKING IT ELIGIBLE FOR 10B CLAIM UNDE R IT ACT. ASSESSEES MERE CLAIM OF MANUFACTURING ACTIVITY IS NOT ACCEPTABLE AS AT BEST ASSESSEE HAS ONLY EXCAVATED B ASIC NATURAL IRON ORE FROM NATURE WITHOUT MAKING SPECIFI C ENGINEERING ACTIVITY OF PRODUCTION/MANUFACTURING AS PER THE SPI RIT OF THE IT ACT. 3. THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ENTIRE DISALLOWANCE MADE U/S 10B OF IT ACT ON THE INCOME A DMITTED AS UNDISCLOSED INCOME DURING SEARCH PROCEEDINGS U/S 13 2(4) OF IT ACT AS SUCH CLAIM IS PATENTLY ILLOGICAL AND AFTER T HOUGHT TO REGROUP THE FACTS OF CASE. 12. AS CAN BE SEEN THE ONLY DISPUTE IS WITH REGARD TO ALLOWANCE OF CLAIM OF DEDUCTION U/S 10B OF THE ACT BY THE CIT(A) . FACTS BEING COMMON, WE DEAL WITH THE FACTS AS INVOLVED IN ITA N O. 260/HYD/2012 RELATING TO AY 2008-09. 13. DURING THE ASSESSMENT PROCEEDING, THE ASSESSING OFFICER NOTICED THAT F OR THE RELEVANT ASST. YEAR, THE COMPANY CLAIMED DEDUCTION U/S 10B OF THE I.T. ACT TO THE EXTENT OF RS.15,04,16,446/-. ON INTERPRETING THE PROVISION CONTAINED U/S 10B, THE A SSESSING OFFICER WAS OF THE VIEW THAT FOR CLAIMING DEDUCTION U/S 10B A COMPANY HAS TO MANUFACTURE OR PRODUCE ARTICLES OR THINGS OR COMPUTER SOFTWARE. WHEREAS, ACCORDING TO THE ASSESSING OFFICER THE ASSESSEE WAS NOT INVOLVED IN MANUFACTURE OR PRODUCTION OF ANY ARTICLE OR THING. HE, THEREFORE, CALLED UPON THE ASSESSEE TO EXPLAIN WHY DEDUCTION CLAIMED U/S 10B SHALL NOT BE DISALLOWED. 6 ITA NOS. 256 TO 261/HYD/2012 M/S SIVA SHANKAR MINERALS LTD. 14. IN REPLY, ASSESSEE STATED THAT THE COMPANY BEI NG A 100% EOU IS ELIGIBLE FOR DEDUCTION U/S 10B OF THE I.T. ACT. ASSESSEE ALSO FILED SOME DOCUMENTS I INFORMATION IN SUPPORT OF ITS CLAIM. 15. HOWEVER, THE ASSESSING OFFICER REFERRING TO THE AUDIT REPORT IN FORM 3CD OPINED THAT AS THE ASSESSEE IS INVOLVED IN EXPORT OF GRANITE IT IS NOT MANUFACTURING OR PRODUCING ANY ARTICLE OR THING. THE ASSESSING OFFICER OBSERVED THAT IRON ORE IS ITSELF IN CRUDE FORM AND NO VALUE ADDITION IS MADE BY THE ASSESSEE-COMPANY BEFO RE EXPORTING THE SAME. AS REGARDS GRANITE BUSINESS ALSO, THE ASSESSI NG OFFICER OBSERVED THAT ASSESSEE HAS FAILED TO SUBSTANTIATE I TS CLAIM WITH NECESSARY DOCUMENTARY EVIDENCE AS TO HOW A COMMERCI ALLY NEW ARTICLE WAS PRODUCED BY IT. HE ALSO NOTED THAT NO BIFURCATION IN RESPECT OF THE ABOVE TWO BUSINESSES IS PRODUCED BY THE ASSESSEE. THE ASSESSEE HAS ALSO NOT MAINTAINED AND DRAWN SEPA RATE ACCOUNTS FOR THESE TWO BUSINESSES. NO SEPARATE MANUFACTURING ACCOUNT IS ALSO MAINTAINED BY THE ASSESSEE FOR THESE TWO BUSINESSES . HE NOTED THAT MINING EXPENSES CLAIMED IS TOWARDS MAINTENANCE OF M ACHINERY ONLY. THE FINAL ACCOUNTS ALSO DO NOT SHOW ANY WORK-IN-PRO GRESS, WHICH IS QUITE UNUSUAL. ASSESSING OFFICER OBSERVED THAT ASSE SSEE HAS NOT CONTINUOUSLY CLAIMED DEDUCTION U/S 10B IN EACH ASS ESSMENT YEAR AS IN AY 2007-08 DEDUCTION U/S 10B HAS NOT BEEN CLAIME D. 16. FURTHER, THE ASSESSING OFFICER NOTED THAT DURIN G THE SEARCH PROCEEDINGS THE MD OF THE COMPANY HAD STATED THAT T HE ASSESSEE- COMPANY WILL NOT CLAIM ANY DEDUCTION ON THE UNDISCL OSED INCOMES ADMITTED DURING THE COURSE OF SEARCH AND HAD VOLUNT ARILY ADMITTED UNDISCLOSED INCOME OF RS.1817.05 LAKHS WITHOUT CLAI MING ANY DEDUCTION, WHATSOEVER. 17. ON THE AFORESAID BASIS, THE ASSESSING OFFICER ULTIMATELY CONCLUDED THAT ASSESSEE IS NOT ENGAGED IN ANY MANU FACTURING ACTIVITY, HENCE, IS NOT ENTITLED FOR CLAIMING DEDU CTION U/S 10B OF THE 7 ITA NOS. 256 TO 261/HYD/2012 M/S SIVA SHANKAR MINERALS LTD. I.T. ACT. ACCORDINGLY, HE DISALLOWED THE DEDUCTION CLAIMED U/S 10B. BEING AGGRIEVED OF THE ASSESSMENT ORDER SO PASSED, ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A). 18. CONTESTING THE FINDING OF THE AOI ON VARIOUS C OUNTS THE ASSESSEE SUBMITTED BEFORE CIT(A) THAT AS IT FULFILS ALL CONDITIONS OF SECTION 10B IT IS ELIGIBLE FOR DEDUCTION. IT WAS SU BMITTED, NOT ONLY THE ASSESSEE IS AN APPROVED 100% EOU BUT THE MINING OF IRON ORE UNDERTAKEN BY IT ALSO COMES WITHIN THE TERM MANUFA CTURE OR PRODUCE ANY ARTICLES OR THINGS AS ENVISAGED IN SECTION 10B . IT WAS SUBMITTED, MANUFACTURE WAS NOT DEFINED. TO STRENGTHEN HIS AR GUMENT THAT MANUFACTURE AS USED IN SECTION 10B SHOULD BE INTE RPRETED LIBERALLY. THE ASSESSEE ALSO REFERRED TO DEFINITION OF MANUFAC TURE AS PROVIDED UNDER SEZ ACT, 2005 AND FOREIGN TRADE POLICY, WHICH ARE AS UNDER: 'MANUFACTURE MEANS TO MAKE, PRODUCE, FABRICATE, ASS EMBLE, PROCESS OR BRING INTO EXISTENCE, BY HAND OR BY MACH INE, A NEW PRODUCT HAVING DISTINCTIVE NAME, CHARACTER OR USED AND SHALL INCLUDE PROCESSES SUCH AS REFRIGERATION, REPACKING, POLISHING, LABELING, RECONDITIONING, REPAIR, REMAKING, REFERBU SHING, TESTING, CALIBRATION AND RE- ENGINEERING. MANUFACTURE, FOR T HE PURPOSE OF FOREIGN TRADE POLICY SHALL ALSO INCLUDE AGRICULTURE , AQUACULTURE, ANIMAL HUSBANDRY, FLORICULTURE, HORTICULTURE, PISCI -CULTURE, POULTRY, SERICULTURE, VITICULTURE AND MINING.' FURTHER, THE DEFINITION OF WORD 'MANUFACTURE' AS PE R SEC.2(R) OF THE SEZ ACT, 2005 IS AS UNDER: 'THE MANUFACTURE MEANS TO MAKE, PRODUCE, FABRICATE, ASSEMBLE, PROCESS OR BRING INTO EXISTENCE, BY HAND OR BY MACHINE, A NEW PRODUCT HAVING A DISTINCTIVE NAME, C HARACTER OR USES AND SHALL INCLUDE PROCESSES SUCH AS REFRIGERAT ION, CUTTING, POLISHING, BLENDING, REPAIR, REMAKING, RE-ENGINEERI NG AND INCLUDES AGRICULTURE, AQUACULTURE, ANIMAL HUSBANDRY , FLORICULTURE, HORTICULTURE, PISCICULTURE, POULTRY, SERICULTURE, VITICULTURE AND MINING.' 19. IT WAS EXPLAINED BY THE ASSESSEE THAT THE ENTI RE PROCESS OF MINING TO EXPORT INVOLVE A NUMBER OF STAGES, WHICH ARE AS UNDER: (A) EXPLORATION AND EXCAVATION OF IRON ORE MINERALS 8 ITA NOS. 256 TO 261/HYD/2012 M/S SIVA SHANKAR MINERALS LTD. (B) CLEARING OF SUBSOIL AND WEATHERED BOULDERS (C) DRILLING AND BLASTING (D) EXTRACTION, EXCAVATION AND TRANSPORTATION (E) CRUSHING, PRIMARY SCREENING AND SECONDARY SCREE NING (F) SIZING AND SEGREGATION (G) GRADING ETC. (H) LOADING & EXPORTING IT WAS SUBMITTED THAT ALL THE AFORESAID OPERATIONS WERE CARRIED WITH THE DEPLOYMENT OF HUGE PLANT & MACHINERY FOR THE PU RPOSE OF GETTING THE PRODUCTS OF REQUIRED GRADE AND DERIVED THE PROD UCTS STANDARD AS PER THE SPECIFICATIONS OF BUYER DEPENDING ON THEIR GRADE OF FE (+/- 63.5 & + 64%) AND WHICH ARE FIT FOR EXPORT. THE EN D PRODUCTS/BYE PRODUCTS ARE SHOWN TO BE IRON ORE FINES, CALIBRATED IRON ORE AND THE WASTE DUMPS. ASSESSEE RELIED UPON THE DECISION IN C ASE OF CIT VS. SESA GOA LTD., (271 ITR 331)(SC) WHEREIN IT WAS HEL D THAT THE WORD PRODUCTION IS WIDE ENOUGH TO TAKE IN ITS AMBIT TH E MINING ACTIVITY AS ORE IS A THING WHICH IS PRODUCED THROUGH HUMAN EFFO RT AS A RESULT OF SUCH ACTIVITY. HE RELIED ON THE DECISION OF CIT VS. SINGERENI COLLIERIES CO. LTD. (221 ITR 48) AND N.C. BUDHIRAJA & CO. (204 ITR 412) WHEREIN IT WAS HELD THAT PRODUCTION IS OF MUCH WI DER CONNOTATION THAN MANUFACTURE. ASSESSEE ALSO RELIED UPON CBDT CI RCULAR NO. 2 OF 2009 DT. 09/03/2009 ON EXEMPTION U/S 10B TO 100% EO U. 20. THE CIT(A) AFTER CONSIDERING THE SUBMISSIONS O F THE ASSESSEE IN THE CONTEXT OF MATERIALS ON RECORD AS WELL AS EX AMINING THE REAL NATURE OF ACTIVITY UNDERTAKEN NOTED THAT THOUGH INI TIALLY ASSESSEE WAS ENGAGED IN GRANITE EXPORT, BUT, SUBSEQUENTLY IT DIV ERTED TO THE BUSINESS OF IRON ORE MINING HAVING SET UP A SEPARAT E UNIT AT BELLARY AND STARTED ITS ACTIVITY IN 2007. HE FURTHER NOTED THAT ASSESSEE IS APPROVED AS 100% EOU BY THE CERTIFICATE ISSUED BY D EVELOPMENT COMMISSIONER, KOCHI. THE CIT(A) ALSO NOTED THAT ASS ESSEE IS REGISTERED WITH CENTRAL EXCISE DEPARTMENT AS A MANU FACTURER OF IRON ORE AND THIS FACT HAS NOT BEEN DISPUTED BY THE ASSE SSING OFFICER. UPON CONSIDERING THE AFORESAID FACTUAL POSITION AND FOLLOWING THE RATIO LAID DOWN IN NUMBER OF DECISIONS CITED BEFORE HIM, LEARNED CIT(A) 9 ITA NOS. 256 TO 261/HYD/2012 M/S SIVA SHANKAR MINERALS LTD. ALLOWED ASSESSES CLAIM OF EXEMPTION U/S 10B ON FOL LOWING CONCLUSION: 9.7 CONSIDERING THE RATIOS OF THE JUDICIAL DECISIO NS AS REFERRED ABOVE AND RELEVANCE OF THE SAME TO THE FACTS OF THE CASE INVOLVED, I AM INCLINED TO CONCLUDE THAT APPELLANT IS ELIGIBLE FOR DEDUCTION U/S 10B OF THE I.T.ACT ON THE PROFITS REL ATED TO THE EXPORT OF THE IRON ORE. BY VIRTUE OF THE PROCESS / PRODUCTION OF IRON ORE WHICH ALSO INVOLVES THE ACTIVITIES THAT MA KE THE 100% EOUS ELIGIBLE FOR THE DEDUCTIONS U/S LOB, AS ENUMER ATED IN SOME OF THE JUDICIAL DECISIONS REFERRED ABOVE, THE APPELLANT IS ELIGIBLE FOR THE DEDUCTIONS U/S 10B OF THE I.T.ACT, 1961, THOUGH THE SAID DECISIONS ARE NOT ENTIRELY ON THE SUBJECT OF DEDUCTION U/S 10B FOR EXPORT OF IRON ORE. WHAT IS APPLICABLE TO THIS CASE IS THE RATIO OF THE DECISIONS WHERE THE WORD 'PRODUCTI ON' IS DISTINGUISHED FROM 'MANUFACTURE' AND IN THIS CASE T HE WORD 'PRODUCTION' IS APPLICABLE, AND THE WORD 'PRODUCE' CONNOTE WIDER MEANING COMPARED TO THE WORD 'MANUFACTURE', WHICH W AS HEAVILY RELIED UPON BY THE ASSESSING OFFICER, WHILE NEGATING THE CLAIMS OF THE APPELLANT. 9.8 FURTHER, AS CONCLUDED IN MANY LEADING JUDICIAL PRONOUNCEMENTS, WHERE THE LANGUAGE USED FOR DEFINIT ION OF THE WORDS IN THE ACT ARE NOT CLEAR OR WHERE MORE THAN O NE MEANING IS POSSIBLE, THE HARMONIOUS INTERPRETATIONS/CONSTRU CTION IS BEST SUITABLE REMEDY WHICH INVOLVES EITHER IMPORTING OF THE DEFINITION PROVIDED IN THE SAME ACT OR IN OTHER RELATED STATUT ES. IN THIS CASE, DEFINITION OF WORD 'MANUFACTURE', THOUGHT NOT USED IN SEC. 10B, HAS BEEN USED IN OTHER PROVISIONS SUCH AS SEC. 32A, 80HH & 80-1 OF THE I.T.ACT, APART FROM OTHER STATUTES WH ICH DEAL WITH THE SUBJECT MATTER OF EXPORTS. IT IS ALSO A SETTLED PRINCIPLE THAT THE BENEVOLENT PROVISIONS, INTENDED FOR PROVIDING I NCENTIVES MAY BE INTERPRETED LIBERALLY. FURTHER, THE ASSESSIN G OFFICER HAS NOT BROUGHT OUT ANY MATERIAL TO KEEP ON RECORD TO P ROVE THAT APPELLANT HAS NOT PRODUCED OR MANUFACTURED AN ARTIC LE OR THING WHICH PROHIBITS THE APPELLANT FROM CLAIMING THE DED UCTION U/S LOB, EXCEPT MERELY FALLING ON THE LITERAL DEFINITIO N OF THE WORD 'MANUFACTURE' USED IN THE SAID PROVISION AND COMING TO THE CONCLUSION THAT ASSESSEE'S ACTIVITY OF IRON ORE EXP ORT IS NOT AMOUNTED TO MANUFACTURING. FURTHER, IT IS ALSO CLEA R THAT THE WORD 'PRODUCE' IS USED SIMULTANEOUSLY IN THE PROVIS IONS OF SEC.10B, APART FROM THE WORD 'MANUFACTURE', AND AS PER THE INTERPRETATIONS OF THE JUDICIAL DECISIONS REFERRED SUPRA, THE WORD 'PRODUCE' CONNOTES WIDER ACTIVITIES AND THE ACTIVIT Y, OF THE APPELLANT FALLS IN SUCH CATEGORY/DEFINITION, SO AS TO BE ELIGIBLE FOR DEDUCTION U/S 10B OF THE I.T.ACT, 1961. 21. THE LEARNED DR SUBMITTED BEFORE US THAT DURING POST SEARCH 10 ITA NOS. 256 TO 261/HYD/2012 M/S SIVA SHANKAR MINERALS LTD. PROCEEDING, ASSESSEE HAD STATED THAT IT WILL NOT CL AIM ANY DEDUCTION ON THE ADDITIONAL INCOME ADMITTED DURING THE COURSE OF SEARCH. IN THIS CONTEXT, THE LEARNED DR REFERRED TO THE STATEMENT R ECORDED FROM G.S.P VEERA REDDY, M.D. OF M/S GBR ENGINEERS LTD. S PECIFICALLY REFERRING TO THE ASSESSEES ANSWER TO QUESTION NO. 14 & 17, LEARNED DR SUBMITTED THAT THE ASSESSEE HAVING OFFERED ADDIT IONAL INCOME ON THE CONDITION THAT IT WILL NOT CLAIM ANY DEDUCTION, THE AO WAS JUSTIFIED IN DISALLOWING THE CLAIM OF DEDUCTION U/S 10B OF TH E ACT. SO FAR AS THE MERITS OF THE CLAIM OF DEDUCTION U/S 10B OF THE ACT IS CONCERNED, LEARNED DR SUPPORTING THE VIEW TAKEN BY THE AO SUBM ITTED THAT MINING ACTIVITY DOES NOT CONSTITUTE MANUFACTURE/PRO DUCTION OF ANY ARTICLE OR THING SO AS TO ENTITLE THE ASSESSEE TO C LAIM DEDUCTION U/S 10B. IT WAS SUBMITTED BY THE LEARNED DR THAT BY PRO CESS OF MINING NO NEW ARTICLE OR THING IS EITHER MANUFACTURED OR PROD UCED. THEREFORE, IT CANNOT BE CONSIDERED TO BE ELIGIBLE BUSINESS FOR AV AILING EXEMPTION U/S 10B. IN SUPPORT OF SUCH CONTENTION, LEARNED DR RELIED UPON A DECISION OF THE HONBLE KARNATAKA HIGH COURT IN CAS E OF V.M. SALGAONKAR BROTHERS VS. CIT 217 ITR 849 AND A DECI SION OF HONBLE AP HIGH COURT IN CASE OF DECCAN CEMENTS VS. CIT, 36 0 ITR 444. 22. THE LEARNED AR ON THE OTHER HAND STRONGLY SUPPO RTING THE FINDING OF THE CIT(A) SUBMITTED THAT THE ASSESSEE H AS NEVER MADE ANY DECLARATION DURING THE SEARCH PROCEEDING FOR NOT CL AIMING DEDUCTION U/S 10B OF THE ACT. THE LEARNED AR SUBMITTED THAT I N FACT ASSESSEE HAS DECLARED MORE INCOME IN THE RETURN OF INCOME FI LED FOR AY UNDER CONSIDERATION AND THE SUBSEQUENT AY I.E. 2009-10 TH AN WHAT WAS OFFERED AT THE TIME OF POST SEARCH PROCEEDING. FOR THAT REASON ALONE, AO TOTALLY IGNORED THE OFFER MADE BY THE ASSESSEE U /S 132(4) AND STARTED HIS COMPUTATION WITH THE PROFIT DISCLOSED I N THE P&L A/C BY THE ASSESSEE FILED ALONG WITH THE RETURN OF INCOME. IT WAS, THEREFORE, SUBMITTED THAT WHILE ACCEPTING THE PROFIT DECLARED BY THE ASSESSEE IN THE P&L A/C, THERE IS NO REASON WHY THE AO SHOULD N OT HAVE ALLOWED THE CLAIM OF DEDUCTION U/S 10B OF THE ACT. SO FAR A S THE OBSERVATION OF 11 ITA NOS. 256 TO 261/HYD/2012 M/S SIVA SHANKAR MINERALS LTD. THE AO THAT MINING ACTIVITY IS NOT ELIGIBLE FOR CLA IM OF DEDUCTION U/S 10B OF THE ACT, THE LEARNED AR SUBMITTED THAT SUCH CONCLUSION OF THE AO IS FACTUALLY NOT CORRECT AS DURING THE YEAR UNDE R CONSIDERATION ASSESSEE HAS STOPPED GRANITE MINING ACTIVITY AND HA S ONLY CONCENTRATED ON IRON ORE MINING ACTIVITY. IT WAS S UBMITTED THAT THIS IS THE FIRST YEAR OF MINING ACTIVITY IN IRON ORE FOR W HICH ASSESSEE CLAIMED DEDUCTION U/S 10B. THEREFORE, AO WAS NOT CORRECT IN OBSERVING THAT ASSESSEE HAS NOT CLAIMED ANY DEDUCTION IN THE AY 20 07-08. SO FAR AS AOS FINDING THAT MINING ACTIVITY DOES NOT COME WIT HIN THE TERM MANUFACTURE OR PRODUCTION, LEARNED AR SUBMITTED THAT MINING OF IRON ORE UNDERTAKEN BY THE ASSESSEE PASSES THROUGH A NUMBER OF PROCESSES TO GET THE FINAL PRODUCT I.E. IRON ORE, H ENCE, IT AMOUNTS TO MANUFACTURE/PRODUCTION OF GOODS AS ENVISAGED U/S 10 B OF THE ACT. IN SUPPORT OF SUCH CONTENTION, LEARNED AR RELIED ON TH E DECISION OF THE HONBLE SUPREME COURT IN CASE OF CIT VS. SESA GOA, 271 ITR 331. IT WAS SUBMITTED THAT THE ASSESSEE IS APPROVED AS 100% EOU AND HAS STARTED PRODUCTION FROM 15/01/2007. IT WAS, THUS, S UBMITTED THAT CIT(A) HAVING ACCEPTED ASSESSEES CLAIM OF DEDUCTIO N U/S 10B OF THE ACT, AFTER EXAMINING THE RELEVANT STATUTORY PROVISI ONS AS WELL AS APPLYING THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN CASE OF CIT VS. SESA GOA (SUPRA), THE SAME SHOULD BE UPHELD . 23. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTI ES AND PERUSED THE MATERIALS ON RECORD AS WELL AS THE ORDERS OF TH E REVENUE AUTHORITIES. THE FACT THAT ASSESSEE IS AN APPROVED 100% EOU HAS NOT BEEN CONTROVERTED BY THE DEPARTMENT AT ANY STAGE. T HUS, ASSESSEE SATISFIES THE PRIMARY CONDITION FOR AVAILING EXEMPT ION U/S 10B. FROM THE ASSESSMENT ORDER, IT IS CLEAR THAT THE AO HAS D ENIED DEDUCTION U/S 10B BASICALLY FOR THE FOLLOWING REASONS. 1) ASSESSE E DURING THE SEARCH PROCEEDING HAD VOLUNTARILY ADMITTED UNDISCLO SED INCOME OF RS. 1817.05 LAKHS WITHOUT CLAIMING DEDUCTION U/S 10B. 2 ) ASSESSEE HAS NOT CLAIMED DEDUCTION U/S 10B FOR TEN CONSECUTIVE A SSESSMENT YEARS BEGINNING FROM AY 2006-07 AND 3) ASSESSEE IS NOT EN GAGED IN ANY 12 ITA NOS. 256 TO 261/HYD/2012 M/S SIVA SHANKAR MINERALS LTD. MANUFACTURING OR PRODUCTION ACTIVITY. SO FAR AS THE OBSERVATION THAT ASSESSEE HAS VOLUNTARILY OFFERED NOT TO CLAIM ANY D EDUCTION U/S 10B IS CONCERNED, ON A PERUSAL OF THE STATEMENT RECORDE D FROM SRI V.B VEERA REDDY, DATED 12/09/2008, WE DO NOT FIND ANY S UCH SPECIFIC REPLY GIVEN BY HIM THAT NO DEDUCTION WOULD BE CLAIM ED U/S 10B OF THE ACT. IN ANY CASE OF THE MATTER, IT IS CLEAR FROM TH E ASSESSMENT ORDER THAT THE ASSESSEE HAS SHOWN MORE INCOME IN THE RET URN OF INCOME FILED BY HIM THAN WHAT WAS OFFERED AT THE TIME OF S EARCH AND IN FACT THE AO HAS ACCEPTED THE PROFIT DECLARED BY THE ASSE SSEE IN P&L A/C. THEREFORE, AOS OBSERVATION THAT THE ASSESSEE HAS O FFERED NOT TO CLAIM ANY DEDUCTION U/S 10B IS OF LITTLE RELEVANCE AND AS OTHERWISE IS ALSO NOT BORNE OUT FROM THE FACTS ON RECORD. SO FAR AS THE SECOND ALLEGATION OF THE AO THAT ASSESSEE HAS NOT CLAIMED DEDUCTION U/S 10B FOR 10 CONSECUTIVE ASSESSMENT YEARS IS CONCERNED, O N A PERUSAL OF FACTS ON RECORD, IT BECOMES CLEAR THAT THE IRON ORE MINING ACTIVITY WAS STARTED BY THE ASSESSEE IN FY 2007-08 CORRESPONDING TO THE AY UNDER CONSIDERATION. THEREFORE, THE AO WAS NOT CORRECT IN OBSERVING THAT THE ASSESSEE HAS NOT CLAIMED ANY DEDUCTION IN AY 2006-0 7. THE THIRD GROUND FOR DENIAL OF DEDUCTION U/S 10B IS, ASSESSE E IS NOT ENGAGED IN MANUFACTURING ACTIVITY. AS CAN BE SEEN FROM THE ELA BORATE DISCUSSION IN THE ORDER OF THE CIT(A), THE MINING OF IRON ORE AS UNDERTAKEN BY THE ASSESSEE PASSES THROUGH VARIOUS PROCESSES AND THE F INAL PRODUCT IS NOT SIMILAR TO IRON ORE IN ITS NATURAL FORM AS FOUN D UNDER THE EARTH. THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. SE SA GOA LTD. (SUPRA) HAD AN OCCASION TO EXAMINE THE IMPORT OF TH E TERM MANUFACTURE OR PRODUCE WHILE CONSIDERING THE ISS UE AS TO WHETHER PLANT INSTALLED FOR EXTRACTING MINING AND PROCESSIN G IRON ORE WOULD QUALIFY FOR INVESTMENT ALLOWANCE HELD AS UNDER: 9. THE REASONING GIVEN BY THE HIGH COURT, IN THE DECIS IONS NOTED BY US EARLIER, IS, IN OUR OPINION, UNIMPEACHA BLE. THIS COURT HAD, AS EARLY AS IN 1961, IN CHRESTIAN MICA I NDUSTRIES LTD. VS. STATE OF BIHAR (1961) 12 STC 150 (SC), DEFINED THE WORD 'PRODUCTION', ALBEIT, IN CONNECTION WITH THE BIHAR SALES-TAX ACT, 1947. THE DEFINITION WAS ADOPTED FROM THE MEANING A SCRIBED TO 13 ITA NOS. 256 TO 261/HYD/2012 M/S SIVA SHANKAR MINERALS LTD. THE WORD IN THE OXFORD ENGLISH DICTIONARY AS MEANIN G 'AMONGST OTHER THINGS THAT WHICH IS PRODUCED; A THING THAT R ESULTS FROM ANY ACTION, PROCESS OR EFFORT, A PRODUCT; A PRODUCT OF HUMAN ACTIVITY OR EFFORT'. FROM THE WIDE DEFINITION OF TH E WORD 'PRODUCTION', IT HAS TO FOLLOW THAT MINING ACTIVITY FOR THE PURPOSE OF PRODUCTION OF MINERAL ORES WOULD COME WITHIN THE AMBIT OF THE WORD 'PRODUCTION' SINCE ORE IS 'A THING', WHICH IS THE RESULT OF HUMAN ACTIVITY OR EFFORT. IT HAS ALSO BEEN HELD BY THIS COURT IN CIT VS. N.C. BUDHARAJA & CO. & ANR. (1993) 114 CTR (SC) 420 : (1993) 204 ITR 412 (SC) THAT THE WORD 'PRODUCTION' IS MUCH WIDER THAN THE WORD 'MANUFACTURE'. IT WAS SAID : 'THE WORD PRODUCTION HAS A WIDER CONNOTATION THAN THE WORD MANUFACTURE. WHILE EVERY MANUFACTURE CAN BE CHARACTERISED AS PRODUCTION, EVERY PRODUCTION NEED NOT AMOUNT TO MANUFACTURE .......... THE WORD PRODUCTION OR PRODUCE WHEN USED IN JUX TAPOSITION WITH THE WORD MANUFACTURE TAKES IN BRINGING INTO EXISTENCE NEW GOODS BY A PROCESS WHICH MAY OR MAY NOT AMOUNT TO MANUFACTURE. IT ALSO TAKES IN ALL THE BY-PRODUCTS, INTERMEDIATE PRODUCTS AND RESIDUAL PRODUCTS WHICH EMERGE IN THE COURSE OF MANUFACTURE OF GOODS.' IT IS, THEREFORE, NOT NECESSARY, AS HAS BEEN SOUGHT TO BE CONTENDED BY LEARNED COUNSEL FOR THE REVENUE, THAT THE MINED ORE MUST BE A COMMERCIALLY NEW PRODUCT. THE DECISIO NS AND OTHER AUTHORITIES ON THE DEFINITION OF THE WORD 'OR E', AS CITED BY THE APPELLANT, ARE IRRELEVANT. 10. LEARNED COUNSEL APPEARING ON BEHALF OF THE ASSESSEE , CORRECTLY SUBMITTED THAT THE OTHER PROVISIONS OF TH E ACT, PARTICULARLY S. 33(1)(B)(B) R/W ITEM NO. 3 OF THE F IFTH SCHEDULE TO THE ACT, WOULD SHOW THAT MINING OF ORE IS TREATED A S 'PRODUCTION'. SEC. 35E ALSO SPEAKS OF PRODUCTION IN THE CONTEXT OF MINING ACTIVITY. THE LANGUAGE OF THESE SECTIONS IS SIMILAR TO THE LANGUAGE OF S. 32A(2). THERE IS NO REASON FOR U S TO ASSUME THAT THE WORD 'PRODUCTION' WAS USED IN A DIFFERENT SENSE IN S. 32A. WE ARE, THEREFORE, OF THE OPINION THAT EXTRACTION A ND PROCESSING OF IRON ORE AMOUNTS TO 'PRODUCTION' WITHIN THE MEAN ING OF THE WORD IN S. 32A(2)(B)(III) OF THE ACT AND, CONSEQUEN TLY, THE ASSESSEE IS ENTITLED TO THE BENEFIT OF S. 32A(1) OF THE ACT. THE QUESTION WHETHER THE HIGH COURT WAS CORRECT IN HOLD ING THAT THE ACTIVITY DID NOT AMOUNT TO 'MANUFACTURE' IS LEFT OP EN. 14 ITA NOS. 256 TO 261/HYD/2012 M/S SIVA SHANKAR MINERALS LTD. 24. FURTHER, BOARDS INSTRUCTION NO. 2 OF 2009 DATE D 09/03/2009, ALSO CLARIFIES THAT 100% EXPORT ORIENTED UNITS ARE ELIGIBLE FOR DEDUCTION U/S 10B OF THE ACT IF THEY ARE CERTIFIED BY DEVELOPMENT COMMISSIONERS. THERE IS NO DISPUTE TO THE FACT THAT ASSESSEE HAS BEEN CERTIFIED BY THE DEVELOPMENT COMMISSIONER. TH EREFORE, CONSIDERED IN THE AFORESAID CONTEXT AND APPLYING TH E RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN CASE OF CIT VS. SES A GOA LTD. (SUPRA) WE ARE OF THE VIEW THAT CIT(A) HAS CORRECTL Y HELD THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 10B OF THE A CT. SO FAR AS DECISIONS RELIED UPON BY THE LEARNED DR ARE CONCERN ED, BOTH OF THEM ARE FOUND TO BE FACTUALLY DISTINGUISHABLE AND DO NO T APPLY TO THE FACTS OF THE PRESENT CASE. IN CASE OF B.M. SALGAONKAR BRO THERS VS. CIT(SUPRA), THE HONBLE KARNATAKA HIGH COURT WHILE CONSIDERING ASSESSEES ENTITLEMENT TO DEDUCTION U/S 80J FOUND T HAT THE PLANT ON WHICH DEDUCTION WAS CLAIMED WAS FOR SIZING AND WASH ING OF IRON ORE. THEREFORE, THE HONBLE HIGH COURT HELD THAT SINCE T HERE IS NO MANUFACTURE OR PRODUCTION OF NEW ARTICLE OR THING D EDUCTION CANNOT BE ALLOWED. HOWEVER, IN THE PRESENT CASE, ASSESSEE IS ENGAGED IN THE MINING AS WELL AS PROCESSING ACTIVITY. IT NOT ONLY EXTRACTS IRON ORE FROM BENEATH THE EARTH BUT ALSO CONVERTS IT TO A SPECIFI C GRADE THROUGH CERTAIN PROCESSES. THEREFORE, CERTAINLY ASSESSEE C AN BE CONSIDERED TO BE ENGAGED IN PRODUCTION OF ARTICLE OR THING. SO FAR AS THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN CASE OF DEC CAN CEMENTS VS. CIT (SUPRA) IS CONCERNED, THERE THE ISSUE BEFORE TH E HONBLE HIGH COURT WAS CLAIM OF DEDUCTION U/S 80HH IN RESPECT O F THE CEMENT MANUFACTURING ACTIVITY. THE HONBLE HIGH COURT, THE REFORE, HELD THAT CEMENT MANUFACTURING ACTIVITY AND MINING OF LIME ST ONE ARE TWO DIFFERENT AND DISTINCTIVE ACTIVITIES, HENCE, MINING OF LIME STONE CANNOT BE CONSIDERED AS PART OF MANUFACTURING OF CEMENT. F URTHER, SUB- SECTION (10) OF SECTION 80HH SPECIFICALLY EXCLUDES MINING ACTIVITIES FROM AVAILING DEDUCTION. THE HONBLE JURISDICTIONAL HIGH COURT KEEPING IN VIEW THE AFORESAID STATUTORY PROVISION H ELD THAT ASSESSEE IS NOT ENTITLED FOR BENEFIT U/S 80HH. WHEREAS, THER E IS NO SUCH 15 ITA NOS. 256 TO 261/HYD/2012 M/S SIVA SHANKAR MINERALS LTD. PROVISION AKIN TO SECTION 80HH(10) UNDER SECTION 10 B OF THE ACT RESTRICTING BENEFIT TO MINING ACTIVITY. ON THE CONT RARY, EXPLANATION 4 OF SECTION 10B MAKES IT CLEAR THAT THE TERM MANUFACTU RE AND PRODUCE AS CONTEMPLATED UNDER SECTION 10B IS INCLUSIVE AND NOT EXHAUSTIVE. THEREFORE, CONSIDERING THE FACTS OF THE ASSESSEES CASE IN THE CONTEXT OF PROVISION CONTAINED U/S 10B AS WELL AS IN THE LI GHT OF RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF SESA GO A LTD. (SUPRA) AND INSTRUCTION ISSUED BY THE CBDT, WE ARE OF THE OPINION THAT THE CIT(A) WAS CORRECT IN ALLOWING THE CLAIM OF DEDUCTI ON U/S 10B OF THE ACT. ACCORDINGLY, WE UPHOLD THE SAME BY DISMISSING GROUNDS RAISED BY THE DEPARTMENT. 25. IN THE RESULT, BOTH THE APPEALS ARE DISMISSED. 26. TO SUM UP, ALL THE APPEALS OF THE DEPARTMENT AR E DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 08/08/2014. SD/- SD/- (B. RAMAKOTAIAH) (SAKTIJIT DEY) ACCOUNTANT MEMBER JU DICIAL MEMBER HYDERABAD, DATED: 8 TH AUGUST, 2014 KV COPY TO:- 1) DCIT, CC-5, 8 TH FLOOR, AAYAKAR BHAVAN, BASHEERBAGH, HYDERABAD. 2) M/S SIVA SHANKAR MINERALS LTD., SY.NO. 192, WARA NGAL X ROADS, NEAR VAARTHA OFFICE, EDULAPURAM, KHAMMA. 3) CIT(A)-VII, HYDERABAD. 4) THE CIT(CENTRAL), HYDERABAD 5)THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDER ABAD. 16 ITA NOS. 256 TO 261/HYD/2012 M/S SIVA SHANKAR MINERALS LTD. DESCRIPTION DATE INTLS 1. DRAFT DICTATED ON SR.P.S. 2. DRAFT PLACED BEFORE AUTHOR SR.P.S 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER VP 5 APPROVED DRAFT COMES TO THE SR.P.S./PS SR.P.S. 6. KEPT FOR PRONOUNCEMENT ON SR.P S. 7. FILE SENT TO THE BENCH CLERK SR.P.S. 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER