1 907 itxa 5522.10.doc IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION k INCOME TAX APPEAL NO.5522 OF 2010 The Commissioner of Income Tax-4, Mumbai .. Appellant Vs. M/s. Deepak Suitings Ltd. .. Respondent. Mr. Vimal Gupta for the appellant. CORAM : J.P. DEVADHAR & K.K. TATED, JJ. DATE : 20TH OCTOBER, 2011. P.C. Whether the ITAT was justified in holding that the Assessee was entitled to section 80IB deduction under the Income Tax Act, 1961 on the profit of the embroidery Unit for production of the borer cloth and on the profit of the embroidery unit for production of grey and knitted cloth is the question raised in this Appeal. 2 907 itxa 5522.10.doc The Apex Court in the case of S.S.M. Bros. (P) Ltd. vs. Commissioner of Income Tax reported in [1999] 106 TAXMAN 87 (SC) has held that where the Assessee buys the cloth and then processes it, using the machinery, by embroidering it and, in some cases, by dyeing it, then uses the same in the production of processed textiles, then the Assessee is entitled to the development rebate under section 33(1)(b)(B)(i) of the Income Tax Act, 1961 like Section 33(1)(b)(B)(i) deduction under Section 80IB of the Act is available on the gross total income of an assessee which includes profits and gains derived from any business of manufacture or production of any article or things. In the present case, the finding of fact recorded by the ITAT is that the grey cloth is purchased by the Assessee as raw material and the same is bleached and thereafter the embroidery and knitting work is done and thereafter sold as embroidery cloth and not as a grey cloth. In these circumstances, in our opinion, the decision of the ITAT that the Assessee is engaged in manufacturing activity and hence entitled to Section 80IB deduction cannot be faulted. Accordingly, we see no merit in the Appeal and the same is hereby dismissed with no order as to costs. (K.K. TATED, J.) (J.P. DEVADHAR, J.)