TaxTMI 
TaxTMI 
2015 (11) TMI 637
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....ed in trading activity in purchase and sale of tea and there was no processing or blending out of activities carried out by it. Since common grounds are raised in both the appeals of assessee as well as the revenue and issue is identical, we have reproduced the ground as raised by assessee vide ground no. 2 in AY 2002-03 and the ground as raised by revenue vide ground no. 2 in AY 2002-03: Assessee's ground in AY 2002-03 "2. a) For that the Ld. CIT(A) erred in rejecting the grounds Nos. 4, 5, 6 & 7 taken before him against denial of exemption of Rs. 37,80,468/- u/s. 10B of the I.T. Act on the basis of the view taken in the order in the appeal of a group Company M/s. Northern Projects Ltd. for the Asst. Year 2003-04. b) For that the Ld. CIT(A) failed to notice that the said assessee M/s. Northern Projects Ltd. had filed appeal against the order of the Ld. CIT(A) on the issue of the denial of the exemption u/s. 10B in the Asst. Year 2003-04 and the said issue in the Asst. Year 2003-04 was still subjudice before the Appellate Tribunal." Revenue's ground in AY 2002-03: "2. That on the facts and circumstances of the case, the Ld. CIT(A) has erred in law as well as on fa....
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....tion of the claim for exemption u/s. 10B in the case of the appellant company also. Ground Nos. 4, 5, 6 & 7 are rejected." Aggrieved, now assessee is in appeal before. 4. At the outset, Ld. counsel for assessee, Shri R.P. Agarwal, Senior advocate stated that the issue now stands covered by the order of Special Bench of ITAT Kolkata in the case of Madhu Jayanti International Ltd. v. Dy. CIT (2012) 137 ITD 377 (Kol) (SB) and he referred to relevant para 35 to 37 of the order, which reads as under:- "35. We find from the above facts and circumstances and case laws relied on by both the sides that the assessee was exclusively engaged in blending, packaging and export of tea bags, tea packets and bulk tea packs. The assessee's division enjoys recognition as a 100% EOU, which is granted by the Development Commissioner, Ministry of Commerce & Industry, Govt. of India. The 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 declined for the reasons that by the Finance Act 2000, the definition of 'manufacture' which included 'processing' contained in section 10B of t....
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.....02.2006. Hon'ble Kerala High Court in the case of Girnar Industries (supra) had held such amendment in Section 10AA to be of clarificatory in nature. The definition of 'manufacture' under the SEZ Act, Exim Policy, Food Adulteration Rules and Tea (Marketing) Control Order is much wider than what is the meaning of the term 'manufacture' under the common parlance, and it includes processing, blending, packaging etc. In view of the above and respectfully following the decision of Hon'ble Kerala High Court in the case of Girnar Industries (supra) and Tata Tea Limited (supra), we hold that the assessee is entitled for exemption under Section 10B of the Act on account of blending of tea. Similarly, in our view, the industrial units engaged in the very same activity i.e. blending, packing and export of tea in the free trade zone shall also be entitled to enjoy tax exemption 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 ex....
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....stive manner, the assessee has argued in its paper book hat for the purposes of section 100B of the Income Tax Act 1961 an exclusive definition has been given in respect of the said two words and that the expression 'manufacture' has been defined to include inter alia any 'process' for the purposes of section 10B of the Income Tax Act 1961. Placing reliance on various judicial pronouncements, the assessee has pleaded that the activity of blending carried out by it leads to 'production' of tea and is, therefore, eligible for benefit of deduction u/s. 10B of the Income Tax Act 1961." In view of the above remand report of AO, Ld. counsel for assessee argued that assessee has submitted complete procedure of blending of tea along with blend sheets during the remand proceedings and once the AO has admitted that there is blending and this is exactly in line with order of ITAT Kolkata Special Bench in the case of Madhu Jayanti International Ltd. (supra). On query from the Bench, Ld. CIT-DR Shri Adhir Kumar Bar relied on the order of AO. 5. We find that factual there is a blending of tea in the present case of assessee and assessee before AO during remand proceedin....
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....isation of money by the recipient of the commission and stated that neither the assessee nor the Government of India was involved in parting with some of the funds so received as commission under a pact between the Iraq Government and the United Nations. The Tribunal held that the assessee was concerned with commercial expediency of the payment and not with the actual costs incurred in rendering the services for which the payment was made. Hon'ble Calcutta High Court confirmed the order of Tribunal in the case of CIT Vs. Rajarani Exports P. Ltd. (2014) 361 ITR 152 (Cal) by observing as under: "Aggrieved by the order of the Commissioner (Appeals) the Revenue preferred an appeal before the Tribunal. The Tribunal dismissed the appeal holding, inter alia, as follows: 'The assessee has made payment for commission and has been rendered services in consideration of the same. As a matter of fact, it is not even the Revenue's case that no services have been rendered at all. The fact that services have been rendered by a party other than the agent to whom commission is paid is wholly immaterial so far as deductibility in the hands of the assessee is concerned. As for the po....