TaxTMI 
TaxTMI 
2017 (2) TMI 1268
X X X X Extracts X X X X
X X X X Extracts X X X X
....dmitting Appeal No. 2 of 2012 on April 25, 2012 has framed the following substantial question of law : "(i) Whether in the facts and circumstances of the case, the Income-tax Appellate Tribunal was justified in holding that the asses see was eligible for exemption under section 10BA of the Income-tax Act despite the fact that the assessee was not fulfilling the required conditions which was proved during the course of survey proceedings and was evident from the purchases made through form 17B of sales tax ? (ii) Whether in the facts and circumstances of law, the Income-tax Appellate Tribunal was justified in confirming the deletion of additions for depositing ESI and PF beyond the time prescribed without appreciating the provisions of section 36(1)(va) of the Act ?" 2.2. This court while admitting Appeal No. 4 of 2012 on April 25, 2012 has framed the following substantial question of law : "(i) Whether in the facts and circumstances of the case, the Income-tax Appellate Tribunal was justified in holding that the asses see was eligible for exemption under section 10BA of the Income-tax Act despite the fact that the assessee was not fulfilling the requir....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l not be entitled to the deduction under this section : Provided further that no deduction under this section shall be allowed to any undertaking for the assessment year beginning on the 1st day of April, 2010 and subsequent years. (2) This section applies to any undertaking which fulfils the following conditions, namely :- (a) it manufactures or produces the eligible articles or things without the use of imported raw materials ; (b) it is not formed by the splitting up, or the reconstruction, of a business already in existence : Provided that this condition shall not apply in respect of any undertaking which is formed as a result of the re-establishment, reconstruction or revival by the assessee of the business of any such undertaking as is referred to in section 33B, in the circumstances and within the period specified in that section ; (c) it is not formed by the transfer to a new business of machinery or plant previously used for any purpose. Explanation.-The provisions of Explanation 1 and Explanation 2 to sub-section (2) of section 80-I shall apply for the purposes of this clause as they apply for the purposes of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the Reserve Bank of India as convertible foreign exchange for the purposes of the Foreign Exchange Management Act, 1999 (42 of 1999), and any rules made thereunder or any other corresponding law for the time being in force ; (b) 'eligible articles or things' means all hand-made articles or things, which are of artistic value and which require the use of wood as the main raw material ; (c) 'export turnover' means the consideration in respect of export by the undertaking of eligible articles or things received in, or brought into, India by the assessee in convertible foreign exchange in accordance with sub-section (3), but does not include freight, tele communication charges or insurance attributable to the delivery of the articles or things outside India ; (d) 'export out of India' shall not include any transaction by way of sale or otherwise, in a shop, emporium or any other establishment situate in India, not involving clearance of any customs station as defined in the Customs Act, 1962 (52 of 1962)." 4. He has contended that the word which has been used in the section "manufacturing or process" is to be construed very strictly....
X X X X Extracts X X X X
X X X X Extracts X X X X
....negative and in favour of the Revenue. The assessee shall pay to the Revenue the costs of the appeal." 5. He has contended that the view taken by the Tribunal is required to be reversed in view of the observations made by the Supreme Court. 6. Mr. Jhanwar, counsel for the respondent has taken us to the judgment of the Tribunal and contended that while considering the process which has been undertaken by the assessee, the Tribunal has observed as under : "The various activities carried out by the appellant, are as under : (i) Firstly, the appellant purchases wood, semi-finished material which requires further wood and other work of beautification and of artistic value. There apart, the other raw material, the wood out of which is the main, and others, i.e., grass, nails, etc., are purchased. (ii) Thereafter various other items are added depending upon the designs, size, quality of the subjected item to be exported. (iii) After purchasing the semi finished goods and raw material, as stated above, the very first step is to assemble the same, if so required. Some time the semi-finished furniture is required to be given further shape as per the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uch cases, particularly under the excise law, the court has to go by the facts of each case. In each case one has to examine the nature of the activity undertaken by an assessee. Mere extraction of stones may not constitute manufacture. Similarly, after extraction, if marble blocks are cut into slabs that per se will not amount to the activity of manufacture. In the present case, we have extracted in detail the process under taken by each of the respondents before us. In the present case, we are not concerned only with cutting of marble blocks into slabs. In the present case, we are also concerned with the activity of polishing and ultimate conversion of blocks into polished slabs and tiles. What we find from the process indicated hereinabove is that there are various stages through which the blocks have to go through before they become polished slabs and tiles. In the circumstances, we are of the view that on the facts of the cases in hand, there is certainly an activity which will come in the category of 'manufacture' or 'production' under section 80-IA of the Income-tax Act. As stated hereinabove, the judgment of this court in Aman Marble Industries P. L....