Income Tax Appellate Tribunal - Rajkot
The Ito, Ward-1,, Gandhidham vs Shri Madhukumar V. Gupta,, Gandhidham on 1 November, 2018
आयकर अपील य अ धकरण, राजकोट यायपीठ, राजकोट ।
IN THE INCOME TAX APPELLATE TRIBUNAL
RAJKOT BENCH, RAJKOT
BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER
AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER
आयकर अपील सं./ ITA No. 558/Rjt/2012
नधा रण वष /Assessment Year: 2009-10
ITO, Vs. Shri Madhukar V. Gupta,
Ward - 1, Prop. M/s. Chemical Solution,
Gandhidham. Plot No.444, Sector-IV,
Kandla Special Economic Zone,
Gandhidham.
(PAN No. AHKPG 9904 A)
अपीलाथ / (Appellant) यथ / (Respondent)
Assessee by : Shri M. J. Ranpura, A.R.
Revenue by : Shri Praveen Verma, Sr. D. R.
सु न वाई क तार ख/ Date of Hearing : 11.09.2018
घोषणा क तार ख / Date of Pronouncement : 01.11.2018
आदे श/O R D E R
PER WASEEM AHMED, ACCOUNTANT MEMBER:
The captioned appeal has been filed at the instance of the revenue against the appellate order of the Learned Commissioner of Income-Tax (Appeals)-II, Rajkot ["CIT(A)" in short] relevant to Assessment Year 2009-10.
2. Revenue has raised the following grounds of appeal:-
1. "Ld. CIT(A) has erred in deleting the addition of Rs. 1,37,83,808/- after considering that mere repacking of goods in same form as manufacturing / services which is a prerequisites for claiming exemption u/s. 10AA.
2. The Ld. CIT(A) has erred in deleting the addition of Rs. 1,37,83,808/-
after holding that the assessee was engaged in blending activities despite the fact that there was no change in outward and inward quantity of chemicals as mentioned by the A.O. in its assessment order and thus there was no blending activities being carried out.
3. The Ld. CIT(A) has erred in deleting the addition of Rs. 1,37,83,808/-
after holding that the assessee was engaged in blending activities ignoring the fact that blending of chemicals requires special instruments/ 2 ITA No.558/Rjt/2012 ITO vs. Shri Madhukar V. Gupta AY : 2009-10 machinery and temperature conditions and in most of the chemicals reaction either there is gain or loss of weight.
4. The Ld. CIT(A) has erred in deleting the addition of Rs. 1,37,83,808/-
after holding that Form No. 56F is not a prerequisite document for claiming exemption u/s. 10AA after ignoring the fact that Income Tax Act itself specifies that claim of exemption u/s. IOAA should be supported b% the Form No. 56F and should be a part of the audit report.
5. The Ld. C1T(A) has erred in deleting the addition of Rs. 1,37,83,808/-
after holding that even if it is assumed that the assessee are of trading in nature but still they falls under services which is against the spirit of the Law. Trading of Goods cannot be termed as rendering of any kind of service.
6. The Ld. CIT(A) has erred in deleting the addition of Rs. 1,37,83,808/-
after holding that sales tax number is of no importance for proving trading activities of the assessee after ignoring the fact that the number was obtained by the assessee declaring himself as trader.
7. The Ld. CIT(A) has erred in deleting the addition of Rs. 1,37,83,808/-
after ignoring the fact that the IEC code of the assessee is of merchant exporter not of manufacturer.
8. It is therefore prayed that the order of Ld. CIT(A) be set aside and that of A.O. be restored to the above extent."
3. The only effective issue raised by the Revenue is that Ld. CIT(A) erred in allowing the exemption u/s 10AA of the Act for Rs.1,37,83,808/-.
4. Briefly stated facts are that the assessee is an individual and engaged in the business of export of chemicals and solvents under the name and style of M/s. Chemical Solutions, a proprietorship concern. The manufacturing unit of the assessee is located in Special Economic Zone (SEZ) at Kandla. The assessee in the year under consideration has claimed a deduction of Rs. 1,38,88,410/- u/s 10AA of the Act.
4.1 The AO during the assessment proceedings observed that the assessee has not carried out any manufacturing activity for the articles as specified 3 ITA No.558/Rjt/2012 ITO vs. Shri Madhukar V. Gupta AY : 2009-10 under clause (j) of Section 2 of the SEZ Act 2005. Accordingly, the AO was of the view that the assessee is not eligible for exemption u/s 10AA of the Act.
4.2 The AO during the assessment proceedings observed certain facts as enumerated below:
i. The stock register is showing inward and outward quantity of different chemicals purchased and sold by the assessee during the year. There was no mention for any production process. The assessee has also not shown any loss/ gain which the assessee has suffered during the process of manufacturing.
ii. There was no certificate furnished by the assessee in Form 56F along with tax audit report which is a mandatory requirement for claiming the deduction u/s 10AA of the Act.
iii. The manufacturing unit of the assessee is registered with the Sales Tax Department as an importer, reseller, retailer and whole seller/ stockiest which shows that the assessee is in the trading activity and no manufacturing activity is being carried out by the assessee.
iv. The material purchased by the assessee and sold to his customers having the same characteristic in the same form. Thus, there was no change in the specification of the chemicals which were purchased and sold.
v. On scrutiny of the purchase Bill, the AO observed that the assessee is purchasing chemicals in large quantity and selling the same in small quantity subsequently after repacking.
vi. There was no claim by the assessee in his profit and loss account for any type of manufacturing expense.4 ITA No.558/Rjt/2012
ITO vs. Shri Madhukar V. Gupta AY : 2009-10 vii. The tax audit report of the assessee also does not contain any information for the manufacturing activity carried out by the assessee.
viii. The report of the inspector deputed to verify the activities of the assessee submitted that there was no manufacturing activity at the factory premises of the assessee.
ix. The investment in the plant and machinery is of Rs. 3.30 lacs only.
Most of the items of planting machinery are not representing complete machinery rather these are representing the components of the machinery.
x. The assessee in its books of accounts has not created any re-
investment reserve.
In view of the above, the assessee was show-caused to explain the deduction claimed u/s 10AA of the Act. The assessee in compliance to it submitted that it is blending different chemicals by mixing and subsequently repacking them for exports.
4.3 As per the assessee, the activity of blending is manufacturing in nature as defined under clause (r) of section 2 of Special Economic Zone Act 2005.
4.4 The blending/mixing is carried out in a different composition which is used by different industries such as paint & coating industry, printing ink industry, oil field industry, and food packaging industry, etc. 5 ITA No.558/Rjt/2012 ITO vs. Shri Madhukar V. Gupta AY : 2009-10 4.5 The assessee also submitted that any change in the combination of chemicals & solvent results changes in the name, characteristics, and category of the solvent.
4.6 The auditor has not specified any manufacturing activity in his audit report because there was not much difference between the raw materials and finished goods manufactured by the assessee. As such, different types of chemicals are purchased which are mixed in the different composition which results in a new, different product, but it remains as chemical even after blending. Though the activity of manufacturing was carried out, the tax auditor did not report the same in his tax audit report due to no change in the raw material as well as finished product.
However, the AO disregarded the contention of the assessee by observing that the assessee is manufacturing 7 MT per day which is not possible without using any machinery in the manufacturing process. Thus, the argument of the assessee that the blending activity was carried out manually was rejected. Accordingly, the AO disallowed the claim of the assessee u/s 10AA of the Act and added back the sum of Rs. 1,38,88,410/- to the total income of the assessee.
5. Aggrieved, assessee preferred an appeal to Ld. CIT(A). The assessee before the Ld CIT(A) submitted as under:
i. The definition given under SEZ Act for manufacturing is inclusive meaning thereby the scope of the words used for the definition can be enlarged. The assessee in support of his argument relied on the 6 ITA No.558/Rjt/2012 ITO vs. Shri Madhukar V. Gupta AY : 2009-10 Hon'ble Apex Court in the case of Dr. P. Vadamalayan vs. CIT reported in 74 ITR 94.
ii. The SEZ Act 2005 was made to achieve the object of EXIM Policy (now known as Foreign Trade Policy) to bring more foreign exchange, to generate employment and developed the backward areas, etc. There was no definition of manufacture u/s 10A of the Act. Therefore the same was brought from Clause 9.3 of chapter IX of EXIM Policy which says that repacking will amount to manufacture. Therefore, the assessee contended that the word manufacture should be constructed liberally and accordingly repacking should also be treated as manufacturing.
iii. The unit of the assessee has been duly approved under Section 15 of SEZ after verifying the necessary activity of the assessee. Therefore, once the unit has been registered under SEZ Act, then the same should be eligible for deduction u/s 10AA of the Act.
iv. The AO erred in relying on the inward and outward of purchases and sales as a deciding factor whether the assessee is carrying out any manufacturing activity or not. As such, the assessee purchases a large quantity of chemicals which are blended with other solvent and subsequently exported as per the specification of the purchase order. Therefore, the assessee is carrying out the blending activity.
v. The assessee also submitted that the chemicals are imported from different countries like Germany, Taiwan, Iran, etc. However, these products subsequently are exported to different countries in small quantity as specified in the purchase order.
vi. The assessee has also claimed deduction u/s 10AA of the Act in the immediately preceding year which was allowed by the Revenue. Therefore the principle of consistency should be applied in the case on hand. The assessee in support of his claim relied on the order of 7 ITA No.558/Rjt/2012 ITO vs. Shri Madhukar V. Gupta AY : 2009-10 Hon'ble Karnataka High Court in the case of Baraka Overseas Traders vs. CIT reported in 67 taxman 188 wherein, it was held as under:
"Whether processing of marine products and raw beef and packing them for export constitute manufacture or production of an article or a thing for purpose of section 80HH - Held, yes"
vii. The assessee also submitted that considering the wide scope of the definition of the term manufacture the activities of the similar nature such as repacking will also fall within the ambit of the term manufacture. The assessee in support of his claim relied on the order of Hon'ble Kerala High Court in the case of M/s. Girnar Industries vs. CIT reported in 338 ITR 277.
viii. The assessee also submitted that the requirement of filing the certificate in Form 56F is directory in nature. Therefore non-filing of the same will not result in the denial of the exemption u/s 10AA of the Act. The assessee further submitted that the Form 56F was duly filed during the assessment proceedings. The assessee in support of his claim relied on the order of Delhi High Court in the case of CIT vs. WEB Commerce (India) Pvt. Ltd. reported in 318 ITR 135.
ix. The assessee also relied on the order of Delhi High Court in the case of CIT Vs. Contimeters Electricals Pvt. Ltd. reported in 317 ITR 249.
x. The assessee also submitted that the items which have been shown in the balance sheet are plant and machinery which are used for the manufacturing activity. Therefore the allegation of the AO that the plant and machinery is of Rs. 3.30 lacs only is not correct. Similarly, the assessee demonstrated that the total value of the investment made in the fixed assets excluding building is coming from Rs. 50.84 lacs as against Rs.3.30 lacs observed by the Assessing Officer.
xi. The assessee was not liable to pay any sale tax as its manufacturing unit is located under the SEZ Act. However, before getting the unit 8 ITA No.558/Rjt/2012 ITO vs. Shri Madhukar V. Gupta AY : 2009-10 registered under the SEZ, it was mandatory for the assessee to furnish the sales tax registration. Therefore it was furnished to the authorities of SEZ. Therefore, the sales tax registration certificate cannot be a criterion for holding that the assessee is not carrying out any manufacturing activity.
xii. The assessee also submitted that all the requirements as specified under the SEZ Act for registration were duly complied with. Thus, no reliance can be placed on the sales tax registration certificate. The assessee in response to his claim relied on the order of Delhi Tribunal in the case of AMD Export Corporation vs. ITO reported in 79 ITD
381. xiii. In the first five years, there was no requirement to create any reinvestment reserve in the books of accounts. Therefore, the assessee cannot be denied for the exemption u/s 10AA of the Act on the ground that the assessee is failed to create reinvestment reserve in its books.
xiv. The assessee without prejudice to the above, referred to the definition of service as provided under section 2(z)(1) of SEZ 2005 which reads as under:
"(z) "services" means such tradable services which, -
(i) are covered under the General Agreement on Trade in Services annexed as IB to the Agreement establishing the World Trade Organization concluded at Marrakes on the 15th day of April, 1994;
(ii) may be prescribed by the Central Government for the purposes of this Act; and
(iii) earn foreign exchange;"
Further, Rule 76 of Special Economic Zones Rules 2006, defines services for purpose of Section 2(z)(l) of Special Economic Zones Act, 2005, which is reproduced as under:
"76. The "services" for the purposes of [1] [clause] [ sub- clause] (z) of section 2 shall be the following, namely:-9 ITA No.558/Rjt/2012
ITO vs. Shri Madhukar V. Gupta AY : 2009-10 Trading, warehousing, research and development services, computer software services, including information enabled services such as back-office operations, call centers, content development or animation, data processing, engineering and design, graphic information system services, human resources services, insurance claim processing, legal data bases, medical transcription, payroll, remote maintenance, revenue accounting, support centers and web-site services, off-shore banking services, professional services (excluding legal services and accounting) rental/leasing services without operators, other business services, courier services, audio- visual services, construction and related services, distribution services (excluding retail services), educational services, environmental services, financial services, hospital services, other human health services, tourism and travel related services, , recreational, cultural and sporting services, entertainment services, transport services auxiliary to all mo des of transport, pipelines transport.
Explanation.- The expression "Trading", for the purposes of the Second Schedule of the Act, shall mean import for the purposes of re-export."
The assessee on the basis of the above submitted that the activity of specific trading is also covered under the definition of service. Therefore he is eligible for deduction u/s 10AA in respect of the export sales.
xv. The assessee also submitted that the provisions contain u/s 10AA of the Act are a beneficial provision which is enacted to allow the assessee to set up the units in the backward areas so that there can be commercial and industrial development. Therefore, the provision of Section 10AA of the Act should be read liberally. The assessee in respect of his claim relied on the judgment of Hon'ble Supreme Court in the case of CIT vs. South Arcot District Cooperative Marketing Society ltd. reported in 176 ITR 117.
10 ITA No.558/Rjt/2012ITO vs. Shri Madhukar V. Gupta AY : 2009-10 However, The Ld. CIT-A after considering the submission of the assessee deleted the addition made by the AO in part by observing as under:
"10. I have given my careful consideration to the various reasons given by the Assessing Officer for denial of exemption and the written submissions and verbal arguments made before me on behalf of the appellant. I have also carefully gone through the relevant provisions of law on this issue as also the case laws cited before me. As mentioned above, the main cause for denial of exemption by the Assessing Officer is that the unit at KSEZ is not engaged in any manufacturing or production activity and at the most it can be stated that there is a small activity of blending of chemicals and mainly the activity is confined to repacking of materials imported in tankers in small drums or carboys as per the requirements of the customers. First of all, it may be noted that the word "manufacturing" for the purposes of section 10AA has been defined in section 2(r) of the SEZ Act, 2005 and this definition is inclusive definition which includes blending also. Since it is an inclusive definition, it can be further extended to similar activities. It is true that the primary purpose of insertion of section 10AA in the Income-tax Act was to continue the benefits of similar nature as provided u/s.10A. The term "manufacture" for the purpose of section 10A was defined in clause 9.3 of Chapter IX of "EXIM Policy". This definition, as reproduced above, also includes repacking. In the present case, the appellant has imported several varieties of chemicals and solvents in. tankers in large quantities and export is to be made in small quantities as per the requirements specified in the purchase orders. Accordingly, the chemicals are repacked in drums/carboys. Further, if so required in the purchase order, blending is done before repacking. For example, Toluene is imported from Iran and the same is blended with Acetone and the resultant product is GP Thinner which is exported to Emirates National Chemicals Industries. These facts are proved from Annexure-B and Annexure-C attached to the written submissions. Further, the appellant has obtained approval from the Development Commissioner in Form-G as per Rule-19 of SEZ Rules, 2006, copy of which has been filed as Annexure-A to the written submissions.
11. From the facts mentioned above, there is no doubt that the unit owned by the appellant is definitely engaged in blending and repacking the imported chemicals in small drums and carboys during the year under consideration as is evident from Annexure-D of the written submissions. In this regard the appellant has strongly relied on the Hon'ble Kerala High Court judgement in the case of Girnar Industries vs. CIT, 338 ITR 277 which has been rendered in the 11 ITA No.558/Rjt/2012 ITO vs. Shri Madhukar V. Gupta AY : 2009-10 context of provisions of section 10A and 10AA. Relevant part of this judgement has been reproduced above wherein it has been held by the Hon'ble Court that repacking and blending is included for the purposes of allowing exemption under the above provisions.
12. The equipments like drum, re-filling machine, hot water generator, MS tank etc., in my view, are in the nature of plant and machinery used for blending and repacking and other similar activities. Whatever expenditure incurred is debited in the accounts and it is not necessary that there should be loss of weight while carrying out such activities. Non-submission of Form 56F is only a procedural requirement and once this form is submitted before completion of the assessment proceedings, it would amount to sufficient compliance of the provisions as held by the Hon'ble Delhi High Court in the case of WEB Commerce India Pvt. Ltd. (supra) and Contimeters Electricals Pvt. Ltd. (supra). In my view, the Assessing Officer's observation that Sales-tax registration number refers to the appellant only as a trader is also of no consequence because such certificate is granted for the specific purpose of levy of sales-tax. The Assessing Officer's observation regarding creation of reserve is also of no consequence because this question would arise only after 10 years. There is substance in the argument of the appellant that even if it is assumed that the appellant is engaged only in trading, even such trading is fully covered under the term "providing any services" as defined in section 2(z)(l) of SEZ Act, 2005 read with Rule 76 of the SEZ Rules, 2006 which have been reproduced above. The appellant's unit located at KSEZ has obtained all permissions, approvals and certificates from the concerned authorities for this purpose as well."
Being aggrieved by the order of ld CIT(A) Revenue is in appeal before us.
6. The Ld. DR before us submitted that the assessee is not carrying out any manufacturing activity as per the provisions of section 10AA of the Act. Therefore, the assessee is not eligible for exemption u/s 10AA of the Act. The Ld. DR vehemently supported the order of AO.
7. On the other hand, Ld. AR before us filed a paper book running from pages 1-104 and drew our attention on the process flowchart demonstrating the 12 ITA No.558/Rjt/2012 ITO vs. Shri Madhukar V. Gupta AY : 2009-10 manufacturing of chemicals which is placed on pages 54 of the PB. The relevant extract of the chemicals process flow chart is reproduced as under:
PROCESS FLOW CHART FOR CHEMICAL BLENDS.
Chemical is received in the factory Chemicals are unloaded in drums as per predetermined ratio Chemicals are mixed in drums as per ratio Chemicals Blend is ready.
Drums are packed in containers for export The Ld AR reiterated the submissions made before the ld. CIT-A and vehemently supported the order of ld. CIT-A.
8. We have heard the rival contentions and perused the materials available on record. The issue in the case relates to the deduction claimed by assessee u/s 10AA. As per the AO, the assessee is not engaged in the manufacturing activity. Therefore the assessee is not eligible for exemption u/s 10AA of the Act. However, the view of the AO was subsequently reversed by the Ld. CIT(A) on the ground that even the trading activities done for the purpose of export are eligible for deduction u/s 10AA of the act.
13 ITA No.558/Rjt/2012ITO vs. Shri Madhukar V. Gupta AY : 2009-10 8.1 The only controversy before us is that whether the assessee is carrying out any manufacturing activity for exemption u/s 10AA of the Act. From the preceding discussion, we note that the AO has not doubted the activity of trading carried out by the assessee. The assessee is importing different kinds of chemicals and exporting the same after repacking. Such activity of the assessee is also covered under the definition of service as specified under section 2(z)(i) of SEZ Act, 2005. The relevant extract of the definition reads as under:
"76. The "services" for the purposes of [1] [clause] (z) of section 2 shall be the following, namely:- Trading, warehousing, research and development services, computer software services, including information enabled services such as back- office operations, call centres, content development or animation, data processing, engineering and design, graphic information system services, human resources services, insurance claim processing, legal data bases, medical transcription, payroll, remote maintenance, revenue accounting, support centres and web-site services, off-shore banking services, professional services (excluding legal services and accounting) rental/leasing services without operators, other business services, courier services, audio-visual services, construction and related services, distribution services (excluding retail services), educational services, environmental services, financial services, hospital services, other human health services, tourism and travel related services, recreational, cultural and sporting services, entertainment services, transport services, services auxiliary to all modes of transport, pipelines transport. [1] [Explanation: The expression "trading", for the purposes of the Second Schedule of the Act, shall mean import for the purposes of re-export.] From the above, it is amply clear that service includes trading activity if it related to the import of the goods for the purpose of the export.
8.2 Now the next question arises whether the provisions of Income Tax Act 1961 will prevail over the provisions of The Special Economic Zones Act, 2005. At this point it is important to refer the relevant provisions of section 51 of SEZ Act 2005 which is given below:-14 ITA No.558/Rjt/2012
ITO vs. Shri Madhukar V. Gupta AY : 2009-10 "51.(1) The provisions of this Act shall have Act to have effect notwithstanding anything inconsistent overriding effect, therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law other than this Act."
8.3 From the reading of the above it is clear that the provisions as specified under The Special Economic Zones Act, 2005 would have overriding effect on the Income Tax Act. The same view has also been held in the own case of the assessee by the Hon'ble ITAT in ITA No.30/Kol/2012 for the AY 2008-09 vide order dated 13/11/2013. The relevant extract of the order is reproduced below:-
"3. We have heard the rival submissions and perused the relevant material on record. The first objection of the Assessing Officer was that the benefit of Section 10AA of the Act is lost when the assessee is engaged solely in 'trading' activities. It has been noticed above that Section 10AA(1) allows benefits, inter alia, for the provisions of any 'services' by an eligible enterprise. Obviously, the erstwhile partnership firm i.e., M/s Midas International was permitted to do 'trading' by the Competent authority. The firm got converted into assessee company and continued the same business with the prior permission from the Competent authority under the SEZ Act. the definition of "service" in the SEZ Act includes 'trading' activity. In that view of the matter, it becomes manifest that the trading activity has been permitted by the Competent authority under the SEZ Act. As such, there can be no question of denial of exception us/s 10AA of the Act. The Ld. Counsel for the assessee has placed on record a copy of an order passed by the Jaipur Bench in DCIT Vs. Goenka Diamond & Jewellers Ltd. It appeal No. 509(JP) of 2011 2012(050)-SOT-0307-TJAI in which it has been held that trading of the eligible goods entitles the se to the benefit of section 10AA of the Act. Similarly, the copy of another order passed by Mumbai Bench in M/s Gitanjali Exports Corporation Limited Vs. ADCIT in ITA No. 6947 & 6948/Mum/2011 dated 08-05-2013 has also been placed on record in which the view expressed by the Jaipur Bench has been reiterated. No contrary precedent has been brought to our notice by the Ld. DR. In view of the two Tribunals orders available on the point allowing exemption u/s. 10AA of the Act in respect to 'trading' activities, we are of the considered opinion that no exception can be taken to the view expressed by the Ld. CIT(A) in granting the exemption."15 ITA No.558/Rjt/2012
ITO vs. Shri Madhukar V. Gupta AY : 2009-10 8.4 We also note that the ministry of commerce and industry, department of commerce (EPZ Section) has allowed the trading activity for exemption u/s 10AA of the Act even if the assessee is engaged in the import of goods for the purpose of exports. The relevant extract of the instruction no 1/2006 dated 24- 03-2006 and instruction no 4/2006 dated 24-05-2006 reads as under:
Instruction no 1/2006 dated 24-03-2006 As decided in the meeting, you may kindly note that trading for the purposes of Rule 76 of the SEZ rules would be confined to import of goods for exports. Accordingly, in the case of propos0als for setting up of trading units, the Approval Committee may consider incorporating a proviso to clauses (i) and (iv) (Form G). The proviso may read as under:-
"Provided that a Unit having letter of approval for trading shall not procure goods from the DTA for trading."
Instruction no 4/2006 dated 24-05-2006 "This Department has been receiving representations on difficulties faced by the existing SEZ units holding approval to do trading, that their exports are adversely affected and also that several of their orders are held up due to the restriction on trading on account of the above instruction. Taking cognizance of these representations, in partial modification of the above referred Instruction dated 24th March, 2006, it has been decided that while units in the Special Economic Zone who hold approval to do trading activities will be allowed to carry out all forms of trading activity, the benefits under Section 10AA will exclude trading other than trading in the nature of re-export of imported goods. Appropriate amendments in this regard are being issued.
In the meantime, sourcing from domestic area may be permitted by units in the SEZs which are allowed to do trading, subject to this circular being cited and on production of an undertaking by the concerned unit that no income tax benefits will be availed by the unit for trading, except in the nature of re-export of imported goods.
Development Commissioners are requested to note the above and take appropriate action."
16 ITA No.558/Rjt/2012ITO vs. Shri Madhukar V. Gupta AY : 2009-10 From the above, it is clear that the activity of the assessee even trading in nature will also be eligible for exemption u/s 10AA of the Act as discussed above.
8.5 As the activity of the assessee is eligible for deduction u/s 10AA of the Act. We are not inclined to adjudicate other points of contentions raised by the Revenue and the Ld. Counsel for the assessee at the time of the hearing. Thus, we do not find any infirmity in the order of Ld CIT(A). Hence, the ground of Appeal of the Revenue is dismissed.
9. In the result, the appeal of the Revenue is dismissed.
Order pronounced in the Court on 1st November, 2018 at Ahmedabad.
Sd/- Sd/-
(RAJPAL YADAV) (WASEEM AHMED)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Ahmedabad; Dated 01/11/2018
Priti Yadav, Sr.PS
आदे श क त ल प अ े षत/Copy of the Order forwarded to :
1. अपीलाथ" / The Appellant
2. #$यथ" / The Respondent.
3. संबं धत आयकर आयु'त / Concerned CIT
4. आयकर आय'
ु त(अपील) / The CIT(A)- II, Rajkot.
5. (वभागीय # त न ध, आयकर अपील य अ धकरण,राजोकट/DR,ITAT, Rajkot
6. गाड फाईल / Guard file.
ु ार/ BY ORDER, आदे शानस स$या(पत # त //True Copy// उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ&धकरण, राजोकट / ITAT, Rajkot