{"id":1213,"date":"2009-12-10T05:13:10","date_gmt":"2009-12-10T05:13:10","guid":{"rendered":"http:\/\/itatonline.org\/archives\/?p=1213"},"modified":"2009-12-10T05:13:10","modified_gmt":"2009-12-10T05:13:10","slug":"ito-vs-arihant-tiles-marbles-supreme-court-cutting-polishing-marble-blocks-is-production-for-s-80-ia","status":"publish","type":"post","link":"https:\/\/itatonline.org\/archives\/ito-vs-arihant-tiles-marbles-supreme-court-cutting-polishing-marble-blocks-is-production-for-s-80-ia\/","title":{"rendered":"ITO vs. Arihant Tiles & Marbles (Supreme Court)"},"content":{"rendered":"\n\n
Click here to download the judgement (arihant_tiles_marbles_manufacture_production_80IA.pdf) <\/strong> <\/a><\/p><\/td>\n<\/tr>\n<\/table>\n

Cutting & polishing marble blocks is \u201cproduction\u201d for s. 80-IA <\/strong><\/p>\n

The assessee was engaged in conversion of marble blocks into slabs and tiles by sawing and polishing. The question was whether this amounts to “manufacture or production of article or thing\u201d for purposes of deduction u\/s 80IA. HELD, deciding in favour of the assessee:<\/p>\n

(i) The word “production\u201d is wider in its scope than the word “manufacture\u201d. It means manufacture plus something in addition thereto. This ground reality is now noted in s. 2(29BA) inserted by Finance Act, 2009 w.e.f 1.4.2009. In Lucky Minmat<\/a><\/strong> 245 ITR 830 (SC), it was held that mere mining of limestone and marble and cutting the same before it was sold will not constitute “manufacture\u201d or “production\u201d but conversion into lime and lime dust could constitute the activity of manufacturing or production. In Aman Marble Industries<\/a><\/strong> 157 ELT 393 (SC) it was held that cutting of marble blocks into marble slabs was not \u201cmanufacture\u201d but the Court was not concerned whether there was \u201cproduction\u201d. <\/p>\n

(ii) While mere extraction of stones and its cutting into slabs may not constitute manufacture the activity of polishing and conversion of blocks into polished slabs and tiles amounts to “manufacture\u201d or “production\u201d because the conversion of blocks into polished slabs and tiles results in emergence of a new and distinct commodity. There is accordingly \u201cmanufacture or production\u201d for s. 80-IA<\/p>\n

(iii) If the contention of the Department that the activity undertaken by the assessee is not manufacture is to be accepted there would be serious and disastrous revenue consequences because the assessees would plead that they were not liable to pay excise duty, sales tax etc. because the activity did not constitute manufacture. <\/p>\n

\nNote: In CIT vs. Gem India Manufacturing<\/a><\/strong> 249 ITR 307 (SC) it was held by a 3 judge Bench that cutting and polishing of diamonds does not<\/strong> amount to manufacturing or production of goods for purposes of s. 80-I\n <\/div>\n","protected":false},"excerpt":{"rendered":"

The word “production\u201d is wider in its scope than the word “manufacture\u201d. It means manufacture plus something in addition thereto. This ground reality is now noted in s. 2(29BA) inserted by Finance Act, 2009 w.e.f 1.4.2009. In Lucky Minmat<\/a><\/strong> 245 ITR 830 (SC), it was held that mere mining of limestone and marble and cutting the same before it was sold will not constitute “manufacture\u201d or “production\u201d but conversion into lime and lime dust could constitute the activity of manufacturing or production. In Aman Marble Industries<\/a><\/strong> 157 ELT 393 (SC) it was held that cutting of marble blocks into marble slabs was not \u201cmanufacture\u201d but the Court was not concerned whether there was \u201cproduction\u201d. <\/p>\n

Read more ›<\/a><\/div>\n

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