DCIT, Jaipur V. M/S GALAXY IMPEX, Jaipur

ITA 748/JPR/2011

• Counselvise Citation: 74823114 RSA 2011
• Duration Of Justice: 5 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 19-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: N M RANKA; NK JAIN
• Section: 80IB; 10B

Judgement Text

1 ITA 748-11 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH B JAIPUR BEFORE SHRI R.K. GUPTA AND SHRI N.L. KALRA ITA NO. 748/JP/2011 ASSTT. YEAR : 2008-09. THE DCIT, CIRCLE-6, VS. M/S. GALAXY IMPEX, JAIPUR. 45, GEM ENCLAVE, MALVIYA NAGAR, JAIPUR. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUNIL MATHUR RESPONDENT BY : SHRI N.M. RANKA & SHRI NK JAIN DATE OF HEARING : 09.01.2012 DATE OF PRONOUNCEMENT : 30.01.2012. ORDER DATE OF ORDER : 30/01/2012. PER R.K. GUPTA, J.M. THIS IS AN APPEAL BY DEPARTMENT AGAINST THE ORDER OF LD. CIT (A) RELATING TO ASSESSMENT YEAR 2008-09. 2. THE DEPARTMENT IS OBJECTING IN ALLOWING EXEMPTIO N UNDER SECTION 10B AMOUNTING TO RS. 3,26,75,754/- TO THE ASSESSEE. 3. THE LD. D/R HAS FAIRLY STATED THAT ISSUE IS COVE RED BY THE ORDER OF TRIBUNAL IN CASE OF ASSESSEE. HOWEVER, HE PLACED RELIANCE ON THE ORD ER OF AO. 4. ON THE OTHER HAND, LD. COUNSEL OF THE ASSESSEE P LACED RELIANCE ON THE ORDER OF LD. CIT (A). COPY OF ORDER OF TRIBUNAL IN CASE OF ASSE SSEE FOR THE IMMEDIATELY PRECEDING YEAR I.E. 2007-08 WAS ALSO FILED. 2 5. AFTER CONSIDERING THE SUBMISSIONS AND PERUSING T HE ORDERS OF AUTHORITIES BELOW AND THE TRIBUNAL, WE FIND THAT ISSUE IS SQUARELY CO VERED BY THE DECISION OF TRIBUNAL IN CASE OF ASSESSEE ITSELF. THE A.O. HAS DISALLOWED T HE EXEMPTION UNDER SECTION 10B BY OBSERVING THAT ASSESSEE HAS NOT FULFILLED THE PRIMA RY CONDITION OF MANUFACTURING AND PRODUCTION OF ANY ARTICLE OR THING. THEREFORE, ASSE SSEE IS NOT ENTITLED EXEMPTION UNDER SECTION 10B OF THE ACT. FOR THE ASSESSMENT YEARS 2 003-04 TO 06-07 ON SIMILAR REASONING THE CLAIM OF EXEMPTION UNDER SECTION 10B WAS DENIED . MATTER REACHED UPTO THE STAGE OF TRIBUNAL AND THE TRIBUNAL HAS ALLOWED THE EXEMPTION . THEREAFTER, FOLLOWING THE EARLIER ORDERS OF THE TRIBUNAL, THE TRIBUNAL CONFIRMED THE ORDER OF LD. CIT (A) FOR ASSESSMENT YEAR 2007-08 ALSO. THE FINDING OF TRIBUNAL IN ITA NO. 1231/JP/2010 FOR THE ASSESSMENT YEAR 2007-08 HAS BEEN RECORDED IN PARA 2.3 IN ITS O RDER AT PAGES 2 TO 4 ARE AS UNDER :- 2.3 WE HAVE HEARD BOTH THE PARTIES. THE TRIBUNAL WHILE DECIDING THE APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2006 -07 HAS REPRODUCED THE PARAGRAPH FROM THE ORDER OF THE TRIBUNAL IN THE CAS E OF THE ASSESSEE FOR THE ASSESSMENT YEARS 2003-04 TO 2004-05. IT WILL BE USEFUL TO REPRODUCE THE FOLLOWING PARAGRAPH FROM THE ORDER OF THE TRIBU NAL IN THE CASE OF THE ASSESSEE FOR THE ASSESSMENT YEARS 2003-04 TO 2005-0 6. 7. AFTER CONSIDERING THE ABOVE SUBMISSIONS, WE FIN D THAT THE ISSUE RAISED IN THE GROUND IS FULLY COVERED WITH TH E DECISION OF JAIPUR BENCH OF THE TRIBUNAL IN THE CASES OF SURAJ MARBLES PVT. LTD. ITA NOS. 512 TO 514/JP/03 ORDER DATED 18.8.200 6 AND M/S. AGARWAL MARBLE & INDUSTRIES LTD. ITA NO. 676/JP/04 DATED 22.12.06 WHEREIN AFTER HAVING GONE THROUGH THE DECI SION OF HONBLE SUPREME COURT IN THE CASE OF LUCKY MINMAT P VT. LTD. AND SESA GOA LTD., THE TRIBUNAL HAS COME TO THE CONCLUS ION THAT THE ACTIVITIES OF CUTTING OF MARBLE BLOCKS INTO USABLE SLABS/TILES IS A 3 MANUFACTURING ACTIVITY. IN THIS REGARD WE ALSO FIN D SUPPORT FROM THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT I N A RECENT JUDGMENT DATED 30.5.2007 IN THE CASE ARIHANT TILES AND MARBLES LTD. VS. ITO (SUPRA) HOLDING THAT CUTTING OF GRANIT E/MARBLE BLOCKS INTO USABLE SLABS IS A MANUFACTURING ACTIVITY BECAU SE THE MARBLE BLOCKS AS A MINERAL PRODUCE FROM EARTH BY ITSELF IS NOT USABLE FOR ANY PURPOSES AND, THEREFORE, TO MAKE IT USABLE VARI OUS PROCESSES WHICH COULD BE APPLIED TO BRING IT TO THAT STAGE WO ULD AMOUNT TO MANUFACTURING. 8. THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF AKASH STONE INDUSTRIES LTD. VS. ACIT, 13 SOT 15 (MU MBAI) HAS HELD THAT WHERE ASSESSEE USED TO TRANSFORM ROUGH RA W MARBLE BLOCKS INTO FINISHED POLISHED SLABS BY SUBJECTING T O RAW BLOCKS TO SEVERAL PROCESSES, LIKE PEELING, DRESSING, CORRECTI NG NATURAL FLAWS, PADDING, SORTING, GRADING , SHAPING, SIZING, POLISH ING ETC. TO PRODUCE FINISHED PRODUCTS LIKE POLISHED MARBLE SLAB S/TILES/TABLE TOP WHICH WAS A COMMERCIAL DISTINCT COMMODITY HAVING DI STINCTIVE NAME AND USE, IT COULD BE SAID THAT THE ASSESSEE IS ENGAGED IN MANUFACTURING/PRODUCTION OF POLISHED MARBLES, SLABS , TILES, TABLE TOPS ETC. AND IN SUCH CASE THE ASSESSEE WOULD BE EN TITLED TO DEDUCTION UNDER SECTION 80IB OF THE ACT. SECTION 1 0B IS A SPECIAL PROVISION IN RESPECT OF NEWLY ESTABLISHED 100% EXPO RT ORIENTED UNDERTAKING. THIS SECTION APPLIES TO ANY UNDERTAKI NG WHICH FULFILLS THE CONDITIONS BESIDES OTHERS THAT IT MANU FACTURES OR PRODUCE ANY ARTICLE OR THING. UNDISPUTEDLY, THE AS SESSEE IS A 100% EOU. THE EARLIER SECTION 10B HAS BEEN SUBSTITUTED BY FINANCE ACT, 2000 WITH EFFECT FROM 1.4.2001 I.E. IN RESPECT OF SUCH EOU WHICH COMMENCES PRODUCTION ON 1.4.2000 IN THE MANNE R PROVIDED THEREIN. THE EXPLANATION BELOW SECTION 10B OF THE ACT DEFINES MANUFACTURING WHICH IS WIDER IN ITS APPLICATION A ND LEGISLATURE IN HIS WISDOM LOOKING TO SCHEME AND THE REGISTRATION G RANTED TO THE 4 EOU HAS INCLUDED THE WORD PROCESS. IT ALSO EXPL AINS THE EXPRESSION PRODUCE ANY ARTICLE OR THING IN EXPANDE D AND WIDER SENSE AND FURTHER EXTEND IT TO INCLUDE PRODUCTION O N COMPUTER PROGRAMME. UNDER THESE CIRCUMSTANCES, WE ARE OF T HE VIEW THAT THERE IS NO INFIRMITY IN THE FIRST APPELLATE ORDER IN THIS REGARD WHICH IS ALSO SUPPORTED BY THE DECISIONS OF HONBLE SUPRE ME COURT AND HONBLE JURISDICTIONAL HIGH COURT. THE SAME IS UPH ELD. THE GROUND IS THUS REJECTED. THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH C OURT IN THE CASE OF ARIHANT TILES AND MARBLES (P) LTD. HAS BEEN AFFIRME D BY THE HON'BLE APEX COURT IN THE CASE OF ITO VS. ARIHANT TILES AN D MARBLES (P) LTD , 320 ITR 79. THIS ISSUE HAS BEEN DECIDED BY THE TRIB UNAL IN THE CASE OF THE ASSESSEE FOR EARLIER YEARS ON THE BASIS OF THE DEC ISION OF THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT, WHICH HAS BEEN AFFIRMED BY THE HON'BLE APEX COURT, WHILE DECIDING THE APPEAL IN TH E CASE OF THE ASSESSEE FOR THE EARLIER ASSESSMENT YEAR AND THEREFORE, THE ISSUE IS DECIDED AGAINST THE REVENUE FOR THE ASSESSMENT YEAR UNDER CONSIDERA TION ON SIMILAR LINES. FOLLOWING THE DECISION OF THE TRIBUNAL FOR PRECEDIN G YEAR, WE HOLD THAT LD. CIT (A) WAS JUSTIFIED IN ALLOWING THE ISSUE IN FAVOUR OF THE AS SESSEE FOLLOWING THE ORDER OF TRIBUNAL FOR ASSESSMENT YEAR 2007-08. WE CONFIRM HIS ORDER. 6. IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISMI SSED. 7. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 30. 01.2012. SD/- SD/- ( N.L. KALRA ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR, D/- 5 COPY FORWARDED TO :- THE DCIT, CIRCLE-6, JAIPUR. M/S. GALAXY IMPEX, JAIPUR. THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 748/JP/2011) BY ORDER, AR ITAT JAIPUR.