HC : Allows Sec. 10B benefit to manufacturer of diamond studded ‘handmade’ jewellery sans machinery

Bombay HC dismisses Revenue’s appeal against ITAT’s order allowing Sec. 10B benefit to assessee-firm (a 100% EOU), engaged in manufacturing of diamond studded gold jewellery, rules that absence of plant and machinery would not lead to a conclusion that there was no ‘manufacturing’ activity; During subject AY 2010-11, AO had denied  deduction on the ground that no manufacturing activity was carried out by assessee as there was no machinery available at its premises, as also a small amount of labour charges were incurred as against the large turnover; HC notes that as per ITAT’s findings, the Government had granted permission to assessee to manufacture handmade jewellery, and that the process of making diamond studded jewellery does not require machinery; Also on the quantum of labour charges and wages being the basis of disallowance, HC refers to ITAT’s finding that the Revenue had not carried out any examination / enquiry to ascertain what would be the fair market value of the labour charges and wages in this sort of activity; Thus, HC holds that view taken by the Tribunal is one of finding of fact and is a possible view, which does not give rise to any substantial question of law.:HC