Ofincometax-I,Jodhpur v. M/S Kwal Pro Exports, 12 Kamal Apartment, Circuit House Road, Jodhpur

HIGH COURT OF JUDICATURE FOR RAJASTHAN ATJODHPUR D.B. Income Tax Appeal No. 113 / 2011 Commissioner ofIncomeTax-I,Jodhpur. ----Appellant Versus M/S Kwal Pro Exports, 12 Kamal Apartment, Circuit House Road, Jodhpur. ----Respondent _____________________________________________________ For Appellant(s) :Mr.K.K.Bissa For Respondent(s) :Mr.Anil Bhandari _____________________________________________________ HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE VINIT KUMAR MATHUROrder 05/05/2018 1.Three questions of law were settled by this Court on 28.4.2011 they read as under:- " (i). Whether on the facts and in the presentcircumstances of the case, the Tribunal was justified inholding that the assessee is said to have undertakenbusiness activity amounting to manufacture bycontravening its own earlier order dt. 6.10.2006 for A.Y.2001-02 in appeal No.633/JU/2005 ? (ii).Whether on the facts and in the presentcircumstances of the case, the Tribunal was justified inholding that the assessee is eligible for deduction underSection 10B of the Income Tax Act ? (iii). Whether on the facts and in the presentcircumstances of the case, the Tribunal was legallycorrect in holding that assessee’s activity of assembling,labeling, relabeling and repacking etc., weremanufacturing or production activities ignoring the lawlaid down by Court in the case of CIT vs. Lucky MineralP.Ltd. Reported in 226 ITR 245 ?” 2.Relevant would it be to note that the respondent carries onbusiness at Jodhpur purchasing wooden blocks and subjecting thesame to carving, finishing and polishing. Wooden handicrafts aremanufactured and sold as a commercially distinct product. 3.The issue would therefore be whether the activity carried outby the respondent in converting wood into the handicraft involvinggrinding, surface smoothing, chemical dipping, drawing, polishing,pacakaging etc. would amount to manufacture or produce anarticle so as to make the assessee eligible for make expemtionunder Section 10(B) (A) of the Income Tax Act, 1961. 4.The issue is no longer res integra. On 02.03.2017 decidingD.B.Income Tax Appeal No.299/2009, C.I.T. Vs. Goverdhan Prasadfollowed in D.B.Income Tax Appeal No.30/2008, M/S Kwal ProExports Vs. The Assistant Commissioner of Income Tax, the viewtaken is that the assessee would be entitled to the exemptionclaimed. 5.In that view of the matter the appeal is deciding in favour ofthe assessee and against the department. 6.The appeal is dismissed. (VINIT KUMAR MATHUR)J. (PRADEEP NANDRAJOG)CJ.