2019 (9) TMI 258

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....e where the issue involved is debatable issue and not a mistake apparent from records. 2. For that ld. CIT(A)-III, Jaipur have further grossly erred under the facts and circumstances of the case in confirming the additions of Rs. 8,61,224/- on account of additional depreciation treating the assessee's manufacturing activities as not a manufacturing activities. 2.1 None appeared on behalf of the assessee when this appeal was repeatedly called for hearing till the Bench rose despite the fact that the notice was issued to the assessee through RPAD and the same has not been received back unserved. Accordingly, we propose to hear and dispose off the appeal ex-parte. 2.2 The original assessment was completed u/s 143(3) on 24-03-2015. Subs....

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....le Supreme Court while allowing claim of additional depreciation amounts a mistake apparent on record. He has relied on the orders of the authorities below. 2.5 Having considered the submissions of the ld. DR as well as careful perusal of the impugned orders and the submissions of the assessee before the ld. CIT(A), we find that the main contention of the assessee against the order passed u/s 154 of the Act is that the issue of additional depreciation and whether the assessee is engaged in the business of manufacturing is debatable issue which cannot be decided u/s 154 of the Act. At the outset, we note that the Hon'ble Supreme Court in the case of CIT vs Gem India Mfg. Co. (supra) has considered and decided this issue in respect of ac....

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....t marketable commodities having different uses; therefore, a company engaged in cutting and polishing raw diamonds for the purpose of export was engaged in the 'processing of goods' to convert them into marketable form. The question that the High Court and we are here concerned with is whether in cutting and polishing diamonds the assessee manufactures or produces articles or things. 6. There can be little difficulty in holding that the raw and uncut diamond is subjected to a process of cutting and polishing which yields the polished diamond, but that is not to say that the polished diamond is a new article or thing which is the result of manufacture or production. There is no material on the record upon which such a conclusion ca....

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....pra), Hon'ble Supreme Court has noted that the assessee in the said case was engaged in the activities which include excavation of marble blocks and processing of such blocks by cutting into tiles and thereafter processing the tiles in different shapes and sizes and polishing was held to be manufacture or production. Thus the process undertaken while manufacturing of tiles from the blocks of marbles is different than cutting and polishing of raw diamonds. Even otherwise the decision in the case of CIT vs Gems India Mfg. Co. (supra) was not at all referred or considered in the case of ITO vs Arihant Tiles & Marbles (P) Ltd. (supra), though both the decisions are passed by the same strength of Bench of Three Judges. The ld. CIT(A) has tho....