Itxa/585/2012 Of Commissioner Of Income Tax-16 v. Jayendra H. Shah

sbw *1* IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO. 585 OF 2012 Commissioner of Income Tax-16 ..Appellant -Versus-Jayendra H. Shah ..Respondent ........... Mr. A. R. Malhotra for the Appellant. Mr. Jitendra Jain i/b. Mr. A. K. Jasani for the Respondents. ........... CORAM: S.C. DHARMADHIKARIAND B.P. COLABAWALLA, JJ. DATE :- 11[th] JULY, 2014 P.C.: 1]This appeal challenges the order passed by the Income Tax Appellate Tribunal dated 14[th] September, 2011. The assessment year in question is 1998-99. 2]Mr. Malhotra appearing on behalf of the revenue in support of this appeal submits that, the substantial question of law would arise from the wrong and erroneous inference drawn by the Tribunal as also the Commissioner of Income Tax (Appeals) from the contents of the remand report submitted by the Assessing Officer. This is a clear case where the findings are perverse and are vitiated by an error of law apparent on the 1/4 3]We have with the assistance of Mr. Malhotra perused the memo of appeal and all annexures thereto. The deduction was claimed under section 80IA by the respondent on the footing that he had set up a manufacturing unit at Daman. The revenue throughout contested this claim and urged that cutting and polishing of Diamond is not a manufacturing activity and, therefore, the deduction was not eligible and allowable. In first round, the assessee came up to the Tribunal and the Tribunal directed a remand to the Assessing Officer to consider as to whether the activities undertaken can be said to be “manufacture”. The Assessing Officer in the second round and as is evident from the narration of the facts by the Tribunal once again was unsuccessful before the Assessing Officer. Therefore, he carried the matter in appeal. In appeal, the Commissioner of Income Tax (Appeals) directed once again a remand. The remand report was submitted by the Assessing Officer on 15[th] October, 2007. 4]It is the contents in this remand report which Mr. Malhotra would challenge and submit that they did not contain anything to favour the case of the assessee rather the same disputes the case of the assessee. 5]We are unable to agree because after the submission of the remand report, the Commissioner of Income Tax granted the relief. The matter was again carried to the Tribunal but this time by the revenue but the findings of fact which are referred in para-7 and 8 would show that the assessee had procured the materials in question and after the necessary process sold the product namely Diamond Studded Silver Jewellery. He sold the same to M/s. Shukra Jewellery Ltd. and that is a sister concern. The assessee gave the details as to how the silver was acquired by him. The assessee had carried on activity of manufacturing of Diamond Studded Silver Jewellery, he filed all the details by addressing various letters. That proved purchases, sales, consumption of silver in manufacturing of Diamond Studded Silver Jewellery, list of workers and that there were 10 workers in Diamond Division and 23 in Jewellery division. The clarifications from the consultant, certificate from the Sales Tax Department, Daman, all this material remained uncontroverted. The Diamond Studded Silver Jewellery, after the aforementioned activity, sold to M/s. Shukra Jewellery Ltd. was, therefore, in the given facts and circumstances termed as 'manufacture'. It is in these circumstances that the claim under section 80IA was granted. We do not find any perversity in the findings or misreading of the remand report or drawing incorrect inferences therefrom. The Tribunal has referred to all the materials and whether the remand report has been correctly reproduced or not but the materials that the Tribunal refers to in para-8 of its order have never been questioned nor challenged. In these circumstances, we do not find that the appeal raises any substantial questions of law. It is accordingly dismissed. No costs. (B.P.COLABAWALLA, J.) (S.C. DHARMADHIKARI, J.)