COMMISSIONER OF INCOME TAX-III vs. M/S.MINERAL ENTERPRISES LTD

3 same. The revenue took a stand that the said process does not amounts to manufacture and therefore the assessee was not entitled to deduction under Section 10-B of the Act. Ultimately, the issue was decided by the Tribunal in favour of the assessee. Therefore, the issue whether the assessee is entitled for deduction under Section 10B of the Act for the assessment year 2005-2006 was settled pursuant to the order of the Tribunal.

4 That the assessee had claimed deduction in respect of purchase and sales of iron ore fines. Therefore, the assessing authority restricted the claim to R.42,02,88,123/- as against Rs.44,10,01,757/-. Aggrieved by the same, an appeal was preferred before the Commissioner of Income-Tax (Appeals).

The Commissioner of Income-Tax (Appeals), partly allowed the same with regard to restriction based on the findings recorded in the assessee’s own case for the previous year holding that the same amounts to manufacture/processing and so far as certain discrepancies as noted in the bills submitted by the assessee, the Assessing Officer was directed to re-consider the said discrepancies. Aggrieved by the same, the Revenue preferred an appeal before the Tribunal for all the assessment years namely, 2005-2006, 2006-2007, 2008-2009 and 2007-2008.

5 arises out of appeal proceedings 1254/Bangalore/11 for the assessment year 2008-200. By the order dated 28-04-2014, the appeals were admitted to consider the following substantial questions of law.

“(1) Whether on the facts and in the circumstances of the case, the Tribunal is right in law in upholding the order of the Commissioner in allowing the assesee’s claim for deduction under Section 10B of the I.T.Act, for the traded iron ore, without appreciating the fact that the activity of the assessee in extraction and processing of mining ore does not amount to manufacture or production of article or thing as prescribed in Section 10B and when requirements for eligibility under said provision is not satisfied by assessee ?

(2) Whether on the facts and in the circumstances of the case, the Tribunal is right in law in holding that the reimbursement of travelling expenses of Rs.5,55,808/- and supervision charges of Rs.15,30,870/- are to be excluded both from the total turnover as well as from export turnover only as per the definitions as given in Section 10A/10B of the I.T. Act and total turnover has not been defined in the Section?

(3) Whether the Tribunal is correct in law in holding that the deduction under Section 10B should be computed in the above manner following the judgment of this Court in the case of TATA Elaxsi, which has not become final since the SLP preferred by Revenue is pending before Apex Court on this issue?

(4) Whether on the facts and in the circumstances of the case, the Tribunal justified in law in holding that the assessee is entitled to additional depreciation on windmill without appreciating the fact that the additional depreciation is allowable only on new plant or machinery included in the fixed assets schedule and not on the windmills engaged in power generation ?

(5) Whether on the facts and in the circumstances of the case, the Tribunal is justified in law in holding that the assessee is entitled to additional depreciation on Windmill by relying on the decision of the Madras High Court in the case of CIT vs. VTM Ltd., 319 ITR 336 without appreciating

7 the fact that the Department has not accepted the said decision of the High Court of Madras and has filed SLP before the Supreme Court, which is still pending and the decision of the Madras High Court in the above case has still not become final ?”

Learned counsel submits that substantial questions of law Nos. 2 & 3 are covered by the judgment in the case of COMMISSIONER OF INCOME-TAX, CENTRAL- III vs. HCL TECHNOLOGIES LTD., reported in [2018] 93 TAXMANN.COM 33 (SC). Hence the questions of law are answered in favour of the assessee and against the revenue.

8 noted in the bills submitted by the assessee. The discrepancies are as to whether the purchase is made by the assessee are ROM or iron ore fines. The plea of the assessee is that what has been purchased is ROM which is processed. However, the finding of the Assessing Officer is that what has been purchased and what has been sold is iron ore. The reasons in support of such a decision has been accorded therein. In so considering the plea of the assessee and the material led-in, the Commissioner of Income-Tax(Appeals), was of the view that there are discrepancies in certain bills with regard to purchase of iron ore fines or ROM. The above discrepancies were noted in the order of Commissioner of Income- Tax(Appeals). It is for this reason that the Assessing Officer was directed to re-consider the bills wherein the said discrepancies are noticed and only after verifying the same to re-do the assessment with reference to the discrepancies only. However, what is further contended is that it is not just the discrepancies in the bills but also with

9 regard to the documents furnished by the assessee with regard to the Customs Department and Department of Mines etc. Therefore, the learned counsel for the assessee contends that when the matter is required to be re- considered, the same should be re-considered so far as all these years which are relevant to the case of the assessee.

10 substantial question of law is answered to the extent that the authorities were justified in directing the Assessing Officer to restrict the deductions on the bills where discrepancies were noted and to re-work the deductions after verifying the bills. The substantial question of law is accordingly answered. The appeal is accordingly disposed off.

Sd/-

Sd/- JUDGE

JUDGE

Rsk/-