- (1.) THIS appeal has been placed on board for hearing attached with the other appeal (ITA No.64/2009). However, the issues involved in these two appeals being different, ITA No.64/2009 has now been detached; and shall be considered separately.
(2.) THIS appeal (ITA No.70/2009) by the assessee under Section 260-A of the Income Tax Act, 1961 ('the Act') is directed against the judgment and order dated 20.07.2009 as passed by the Income Tax Appellate Tribunal, Jodhpur Bench, Jodhpur ('the ITAT') in Income Tax Appeal No.319/JU/2008 relating to assessment year 2005-06. After having heard the learned counsel for the parties and having perused the material placed on record including that related to the subsequent events, we are satisfied that this appeal, essentially against the order of remand, has been rendered infructuous. Thus, dilatation on all the factual aspects does not appear necessary. A brief reference to the relevant background aspects would suffice. In the assessment proceedings for the assessment year 2005-06, the appellant-assessee, who is engaged in the activity of sawing of marble blocks into slabs and tiles and exporting the same, claimed exemption of profit under Section 10B of the Act. The Assessing Officer ('the AO'), in his order dated 28.12.2008, rejected such claim with the finding that no manufacturing or production activity was involved and no new article or thing came into existence by the activity of the assessee. However, the Commissioner of Income Tax (Appeals), Udaipur ['the CIT(A)'] came to the conclusion otherwise and held the appellant-assessee entitled for exemption under Section 10B of the Act. This order of CIT (A) was challenged in Appeal No.319/JU/2008 by the revenue before the ITAT. In the aforesaid appeal before the ITAT, it was urged by the revenue that the CIT(A) erred in allowing the exemption to the assessee under Section 10B of the Act while ignoring the fact that the assessee was just engaged in the process of cutting, sizing and polishing the marble and no new article or thing came into existence. The ITAT considered the facts of the case and found that neither the AO nor the CIT(A) had carried out the necessary inquiry to determine the nature of activity or the processes carried out by the assessee; and found it a fit case to be restored to the file of AO for de novo consideration, particularly on the nature of activity of the assessee. The ITAT ultimately observed and held as under:- ".....Therefore, we are of the considered view that this is a fit case to be restored to the file of the Assessing Officer for de novo consideration of this issue in the light of submissions made by assessee before him that was extracted from pages 2 to 16 in the Assessment order as well as the decision of the Hon'ble Jurisdictional High Court of Rajasthan in the case of Arihant Tiles and Marbles and this Bench order in the case of Madhav Marbles, and also verify the various activities alleged to have been carried out by the assessee as to they will amount to 'manufacture' or not by physically verifying the factory premises of the assessee with reference to the books of account maintained by the assessee, and pass necessary consequential order as per law, of course, strictly following the principles of natural justice. The assessee is also hereby directed to cooperate with the Assessing Officer for early disposal." In this appeal by the assessee against the order of remand so made by the ITAT, on 03.11.2010, this Court observed that the appeal is to be heard on the following substantial question of law:- "Whether the ITAT was justified in remitting the matter in view of the facts and circumstances of the instant case?" However, on 14.12.2010, the Court framed two more substantial questions of law as under:- "(1) In the light of finding recorded by the Tribunal in paragraph 6 by observing "that assessee is carrying on the activity of converting heavy marble blocks into slabs and tiles", whether it was necessary for the Tribunal to still remand the case for finding out the nature of activities undertaken by the appellant-assessee? (2) Whether finding recorded by the Tribunal in paragraph 6 is sufficient for holding on facts that the nature of activity in which appellant is engaged in manufacturing is proved and hence, no need to remand the case for again examining the issue?"
(3.) A look at the aforesaid three questions makes it clear that essentially, the validity of the order of remand as made by the ITAT for finding out the nature of activities undertaken by the appellant-assessee is in question in this appeal. However, it is pointed out by the learned counsel for the parties that pursuant to the order of remand, the AO indeed carried out the necessary inquiry on the nature of activities of the appellant-assessee and then, passed the order on 30.12.2010 in favour of the assessee with reference to the order passed by the Hon'ble Supreme Court on 02.12.2009 in Civil Appeal No.8036/2009 [Income Tax Officer Vs. Arihant Tiles and Marbles P. Ltd., reported in (2010) 320 ITR 79 (SC)]. A copy of the order dated 30.12.2010 has been placed on record whereform it is noticed that the AO has, inter alia, observed and held as under:- "In compliance of the ITAT order, visit of the factory of the assessee has been carried out to inspect the operations carried out by the assessee. On physical inspection and also based on detailed submissions made by the assessee which also includes step by step manufacturing process with flow Chart and also depicted with photographs placed on record, it is clear that assessee case is squarely covered under the Order of the Honable Supreme Court pronounced in Civil Appeal No.8036/2009 pronounced on 02.12.2009. Considering the facts of the assessee is similar to the process narrated in the above citation and also accepted in assessee's own case for subsequent assessment orders for assessment year 2007-8 & 2008-09, the claim of the assessee u/s 10 B of the Income Tax Act is hereby accepted/allowed." In view of the subsequent events as placed on record by the learned counsel for the parties and for the aforesaid order dated 30.12.2010, as passed in relation to the appellant- assessee for the Assessment Year 2005-06, wherein the Assessing Officer has given effect to the remand order as made by the ITAT; and wherein the findings have been recorded in favour of the appellant-assessee, we are clearly of the view that the questions of law as formulated in this case on the validity of the order of remand, now could only be considered rather redundant and need not be answered. In the ultimate analysis, when the findings on the core issue on merits have been recorded in favour of the assessee after remand, this appeal by the assessee against the order of remand could only be considered infructuous. Hence, while taking note of the order passed by the Assessing Officer on 30.12.2010, this appeal is treated as infructuous and is dismissed as such.;