TaxTMI 
TaxTMI 
2020 (2) TMI 848
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....ncome Tax Act as the activity carried out by the Assessee of manufacturing and export of articles ready to decorate products such as bouquets, and also home and office decorations, garlands, potpourris etc. 2.The present Appeal was admitted by a Coordinate Bench of this Court on 08.03.2011 with the following Substantial Questions of Law. "(i) Whether on the facts and in the circumstances of the case, the Tribunal was right in deciding that the assessee is entitled for deduction under Section 10B contrary to the mandatory provision stipulated under the Act? (ii) Whether on the facts and in the circumstances of the case, the Tribunal was right in not deciding or giving any finding on the claim of the assessee for deductio....
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....s) is cited at the bar. A Coordinate Bench of this Court in the said judgment held as under: "15. We agree with the contentions made by the learned senior counsel appearing for the assessee that the process which the assessee had undertaken satisfies the test of manufacture to qualify for relief under Section 10B of the Income Tax Act. As already narrated in the preceding paragraph, the emphasis of the Revenue is that in the absence of any definition under the Act as to what 'manufacture' is, the decision of the Apex Court reported in 292 ITR 444 (CIT V. Tara Agencies) would squarely apply. It is contended that every change is not 'manufacture' and every change in an article as the result of treatment, p....
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....the Income Tax Act, inserted by Finance Act, 2003, with effect from 1.4.2004, which defines 'manufacture or produce' to include the cutting and polishing of precious and semi-precious stones, as is relevant for the assessment years under consideration, the decision relied on by the Revenue is not of any assistance. Learned Standing counsel appearing for the Revenue brought to our attention Section 2(29)BA, inserted under the Finance (No.2) Act 2009, with effect from 1.4.2009, which defines 'manufacture' to mean a change in a nonliving physical object or article or thing resulting in transformation of the object or article or thing into a new and distinct object or article or thing having a different name, character ....
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....o manufacturing activity." Thus the Apex Court pointed out that if the commodity can no longer be regarded as the original commodity but instead is recognized as a new and distinct article, then the activity of manufacture can be said to take place. 19. The decision relied on by the Revenue reported in 292 ITR 444 (CIT V. Tara Agencies), however, stands on a different footing. There, the assessee was engaged in purchase of different qualities of tea and blending the same for the purpose of export. On the question as to whether the assessee would be entitled to weighted deduction under Section 35B(1A) of the Income Tax act, the Supreme Court pointed out on facts that the assessee's activity amounted to processing only and the ac....