2020 (10) TMI 426

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....ppellate Tribunal, Madras 'B' Bench, Chennai in ITA No.1933/Chny/2017 dated 08.02.2018 for the Assessment Year 2014-2015. 2. The appeal was admitted on 12.11.2018 to consider the following substantial questions of law: "Whether the Income Tax Appellate Tribunal is right in law in following that the activity of the assessee of purchasing illuminate and removing dust from it and selling the dust removed illuminate amounts to 'manufacture', when Clause(r) of Section 2 of the special Ezonomic Zones Act, 2005 defines 'manufacture' otherwise and that the assessee is eligible for deduction under Section 10AA of the Income Tax Act, 1961?" 3. We have heard Mr. M.Swaminathan, Senior Standing Counsel assisted by ....

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....dated 02.09.2014 and the Assessing Officer rejected the claim of the assessee, who claimed deduction under Section 10AA of the Act, on the ground that the raw material and the finished product are one and the same and there was no manufacturing activity having taken place in the SEZ unit of the assessee. 5. The assessee filed an appeal before the Commissioner of Income Tax (Appeals)-III, Madurai, (the CIT(A), for brevity). The appeal was allowed by an order dated 07.12.2016, alleging that the processes carried out by the assessee in their SEZ unit, results in a new product having a different name, character or use, as per the definition of "manufacture", as defined under Section 2(r) of the Special Economic Zone Act, 2005 ....

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....d by them. A certificate has been given by the Assistant Development Officer dated 28.03.2013, certifying that the assessee's unit has commenced production on 29.02.2012. Further, the assessee has stated that the export invoice was submitted to the Assessing Officer during the assessment procedure. However, the same was ignored and was not taken into consideration. 10. The CIT(A) after considering the factual position accepted the submission of the assessee that the semi finished material purchased by the assessee is not marketable and usable in the industry, as what is purchased by the assessee includes silicon, sand and waste, which cannot be marketed as such, unless the waste materials are removed. The flow chart, which was ....