Delhi High Court
Commissioner Of Income Tax vs Ramsons Organics Ltd on 3 May, 2010
Author: Badar Durrez Ahmed
THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment delivered on: 03.05.2010
+ ITA 368/2010
COMMISSIONER OF INCOME TAX ... Appellant
- versus -
RAMSONS ORGANICS LTD ... Respondent
Advocates who appeared in this case:-
For the Appellant : Ms Prem Lata Bansal with Ms Anshul Sharma
For the Respondent : None
CORAM:-
HON'BLE MR JUSTICE BADAR DURREZ AHMED
HON'BLE MR JUSTICE V.K. JAIN
1. Whether Reporters of local papers may be allowed to
see the judgment ?
2. To be referred to the Reporter or not ?
3. Whether the judgment should be reported in Digest ?
BADAR DURREZ AHMED, J (ORAL)
1. The only issue, which the revenue seeks to raise before us, is
with regard to the cutting and processing of stone, marble, granite etc. and
as to whether such cutting and processing amounts to manufacture or
production so as to be eligible for deduction under Section 10 B of the
Income Tax Act, 1961 (hereinafter referred to as „the said Act‟).
2. The present appeal arises out of the order dated 09.04.2009
passed by the Income Tax Appellate Tribunal in ITA No. 2085/Del/2008
relating to the assessment year 2005-2006.
3. The Assessing Officer had deleted the deduction under Section
10B by holding that cutting and processing of stone, marble, granite etc. did
not amount to manufacture or production. However, the Commissioner of
Income Tax (Appeals) deleted the said disallowance and the same was
confirmed by the Income Tax Appellate Tribunal. In doing so, the Tribunal
followed the assessee‟s own case which had been decided by the Tribunal
by an order dated 29.08.2008 in respect of assessment years 2003-2004 and
2004-2005. The findings recorded by the Tribunal in the order dated
29.08.2008 for the earlier assessment years were that the assessee was
primarily purchasing raw stone blocks of sandstone, marble, granite etc. and
then cutting the same into desired thickness after calibration. The sliced
stone blocks were then put through various processes to give it the required
polished surface, design, water absorption resistance, quality etc. The end
result were tiles of various dimensions and designs and these tiles were used
for various purposes, such as flooring, wall tiles, kitchen tops, table tops
etc.. The Tribunal held that these multiple uses of the tiles produced by the
assessee could not have been done by solely using the main raw material
which was nothing but solid blocks of sandstone, marble or granite. It was
also noticed as a fact that the end product of the assessee was a product
which was commercially distinct from the primary raw material and was the
result of the activity conducted by the assessee. The Tribunal also noted
that the term "production" was wider than "manufacture" and even if it were
to be assumed that the assessee was not engaged in a manufacturing
activity, it was certainly engaged in the activity of production. The
processes employed by the assessee were carried out by highly skilled and
specialized workmen on the raw material and the price of the end product
was many times more than that of the raw material. Consequently, it was
found as a fact that the assessee was engaged in the process of production of
the said tiles.
4. In respect of the present year also, the Income Tax Appellate
Tribunal followed its earlier decision of the assessment years 2003-2004
and 2004-2005. We are also informed that appeals preferred against the
order passed in respect of the earlier assessment years have also been
dismissed by this Court. We see no reason to take a different view.
The present appeal is also dismissed.
BADAR DURREZ AHMED, J
V.K. JAIN, J
MAY 03, 2010
SR
