Court dismisses appeal on interpretation of Income Tax Act sections; declines to address loss calculation, citing factual basis.

The Court dismissed the appeal in favor of the assessee regarding the interpretation of Sections 10B(2)(ii) and 10B(2)(iii) of the Income Tax Act on manufacturing activity, as it was settled by a prior judgment. The Court also declined to address the calculation of allowable loss percentage under the Act, stating it was a factual rather than a legal issue. Consequently, the appeal was dismissed on both grounds.

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Issues:
1. Interpretation of Sections 10B(2)(ii) and 10B(2)(iii) of the Income Tax Act regarding manufacturing activity.
2. Calculation of allowable loss percentage under the Income Tax Act.

Analysis:
1. The first issue in this appeal was whether the assessee was engaged in the manufacture or production of an article or thing, meeting the conditions specified in Sections 10B(2)(ii) and 10B(2)(iii) of the Income Tax Act. The Tribunal had ruled in favor of the assessee, which was challenged. However, both counsels agreed that a prior judgment by the Division Bench of the Court dated 10.10.2018 had already settled this issue. The Court, in line with the previous judgment, held that the substantial question of law regarding the manufacturing activity was decided against the Revenue and in favor of the assessee. Therefore, the appeal was dismissed on this ground.

2. The second issue revolved around the calculation of allowable loss percentage under the Income Tax Act. The Court noted that after considering the arguments from both sides, it was observed that the second substantial question of law was not a legal question but a factual one concerning the determination of the weight of loss on the total quantity. As such, the Court declined to provide an answer to this question. Consequently, the appeal was dismissed without further consideration on this issue.

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