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iii. Whether the Appellate Tribunal was correct in not appreciating that the assessee had obtained LE-3 licence under the Explosives Rules, 2008 for its Bangalore property and in terms of this licence, no manufacturing activity could be conducted in the subject Bangalore property and is also not an 'industrial undertaking'? And http://www.judis.nic.in iv. Whether the Appellate Tribunal is correct in law in holding that the assessee is eligible to claim deduction under Section 54F of the Income Tax Act on the amount of Rs.2,99,50,000/-, which was seized by the Department without taking cognizance of the lack of intention on the part of the assessee to make the deposit of the said amount in Capital Gains Accounts Scheme?”

9. In our considered view, the Assessing Officer failed to take note of the vital factor namely that the property, which was sold by the assessee in Bangalore, was a 'magazine'. Rule 2(31) of the Explosives Rules, 2008 defines the word 'magazine' to mean a building or structure (other than an explosives manufacturing building) intended for storage of explosives, specially constructed in accordance with the specification provided under these Rules or of a design and approved by the Chief Controller. The expression 'Chief Controller' is defined under Rule 2(9) of the Explosives Rules, 2008 to mean the Chief Controller of Explosives.

10. Section 4(h) of the Explosives Act, 1884 defines the word 'manufacture' in relation to an explosive, which includes the process of (1) dividing the explosive into its component parts or otherwise breaking up or unmaking the explosive, or making fit for use any damaged explosive; and (2) re-making, altering or repairing the explosive. Thus, the definition of the word 'manufacture' as defined under the Explosives Act, 1884 is an inclusive definition and storing of bulk quantity of explosives and repacking http://www.judis.nic.in for retail sale would undoubtedly fall within the meaning of the word 'manufacture'. In terms of Rule 71 of the Explosives Rules, 2008, a person holding licence for possession of explosives granted under these Rules shall store the explosives only in the premises specified in the licence. Thus, possession, usage and sale of explosives are strictly regulated under the provisions of the Explosives Act and the relevant Rules framed thereunder.

12. The scheme of the Explosives Act and the relevant Rules framed thereunder would clearly bring a 'magazine', which was referred to by the Assessing Officer as a godown to qualify to be a place used for the purpose of business of an industrial undertaking and in fact, going by the definition of the word 'manufacture' under the Explosives Act, the activity done by the assessee namely storage and repacking would also, in our opinion, fall within the definition of the word 'manufacture'. The Tribunal, in paragraph 4.6 of its order, has specifically recorded that the facts are not in dispute. In the light of the above, we find that the interpretation given by the Tribunal to the facts of the case of the assessee is perfectly legal and valid. For the above reasons, the Revenue has not made out any ground to interfere with the order passed by the Tribunal.