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The Revenue has filed the present appeals aggrieved by the orders of the Income Tax Appellate Tribunal, Bengaluru Bench, dated 03.03.2017 in ITA.Nos.380/2015, 379/2015 and 381/2015, respectively, allowing the appeals of the assessee and permitting claim of deduction under Section 10B of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') holding that mere processing of the iron ore in a plant and machinery located outside the bonded area will not disentitle the assessee from deduction where the iron ore was excavated from the mining area belonging to an export oriented unit. The tribunal further held that as the raw material as well as finished product both belonged to the assessee and was exported by the assessee, it could be said that there was no violation of Section 10B of the Act, disentitling the claim of the benefit of deduction.

iii) The export of iron ore which was mined and excavated in an area within the legal possession of a EOU but processed through a non-EOU unit would not contravene any of the conditions under Section 10B, disentitling deduction.

5. The Tribunal, on hearing the rival contentions has observed that the only controversy was with respect to the processing of iron ore which was done by the 'SESA plant' situated outside the bonded area. The Tribunal held that custom bonding was not a condition precedent for granting exemption under Section 10B of the Act and allowed the appeals which has been challenged in the present appeals by the Revenue.

7. In so far as factual aspects are concerned the authorities have clearly held that there has been outsourcing of processing of iron ore to evidence which the profit and loss Account and the Ledger account for the relevant year have been relied upon. The assertions to the contrary by the Revenue warrants no acceptance.

8. As regards the contention that the processing by 'SESA plant' which is a plant situated outside the customs bonded area and disentitles the assessee from claiming deduction under Section 10 B is concerned, the same can be answered as follows:

(a) the processing of the iron ore in a plant belonging to the assessee being in the nature of job work is not prohibited and forms an integral part of the activity of the EOU;

(b) The mere fact that the 'SESA Plant' is situated outside the bonded area is of no legal significance as the benefit of customs bonding is only for the limited purpose of granting benefit as regards customs and excise duty. The entitlement of deduction under the Income Tax Act is to be looked into independently and said benefit would stand or fall on the applicability of section 10 B of the Act.