1 4.ITXA.10-11 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.10 OF 2011 The Commissioner of Income Tax-14, Mumbai. ..Appellant. Vs. M/s. Arts & Crafts Exports. ..Respondent. .... Mr. D.K. Kamwal, for the Appellant. Dr.Deepak Tralshawala a/w. V.S. Hadade, for the Respondent. .... CORAM : J. P. DEVADHAR & A.R. JOSHI, JJ. DATED : 07 th DECEMBER, 2011. P.C. 1. Three questions of law raised by the Revenue in this Appeal read thus : “ (a) Whether on the facts and in the circumstances of the case, the ITAT erred in law in allowing deduction u/ s. 80IB and u/s. 10BA by holding that the undertaking, on which provisions u/s. 80IB and u/s. 10BA of the I.T. Act, as the case may be apply, has manufactured or produced eligible articles or things ignoring the fact that the assessee, in fact, outsourced the entire craft and artistic items by outright purchase from the local artists, craftsmen, etc. without any value addition as 2 4.ITXA.10-11 such ? (b) Whether on the facts and circumstances of the case, the ITAT erred in law in allowing deduction u/s. 10BA by holding that it satisfies the condition given in Section 10BA(2)(e) employing twenty or more workers during the relevant previous year ignoring the fact that in, reality, it employed only two carpenters and other barely labours, only for the purpose of manufacture/production of crafts and artistic articles dissatisfying the condition required by the provision of Section 10BA(2)(e) of the Income Tax Act, 1961 ? (c) Whether on the facts and circumstances of the case, the ITAT erred in law in holding DEPB as a profit derived from export business for the purpose of computing deduction u/s. 10BA ignoring the ratio of decision in the case of M/s. Liberty India vs. CIT, 317 ITR 218(SC) having binding force in fact and circumstances of the case. 2. The assessment year involved herein is A.Y. 2004-2005. 3. As regards questions (a) & (b) are concerned, Counsel for the Revenue fairly states that the decision of the ITAT in the case of the assessee for the earlier years in holding that the assessee is engaged in the manufacturing activity and, therefore, entitled to deduction under Section 80IB of the Income Tax Act, 1961 has been accepted by the Revenue in the earlier years. No argument is advanced to establish that 3 4.ITXA.10-11 the said decision of the ITAT for the earlier years is erroneous. In these circumstances, questions (a) & (b) raised by the Revenue cannot be entertained. 4. As regards question (c) is concerned, Counsel for the Revenue fairly states that though the question has been raised by relying upon the decision of the Apex Court in the case of Liberty India Vs. CIT reported in 317 ITR 218, the said decision has no relevance to the facts of the present case. In this view of the matter, the third question raised by the Revenue cannot be entertained. 5. In the result, we see no reason to entertain the Appeal. Accordingly, the appeal is dismissed. (A. R. JOSHI, J.) (J. P. DEVADHAR,J.)