The ACIT, Bhopal v. M/s Shree Janki Overseas Pvt. Ltd., Bhopal

ITA 380/IND/2009 | 2005-2006
Pronouncement Date: 02-03-2011 | Result: Dismissed

Appeal Details

RSA Number 38022714 RSA 2009
Assessee PAN ITYOF7920M
Bench Indore
Appeal Number ITA 380/IND/2009
Duration Of Justice 1 year(s) 7 month(s) 7 day(s)
Appellant The ACIT, Bhopal
Respondent M/s Shree Janki Overseas Pvt. Ltd., Bhopal
Appeal Type Income Tax Appeal
Pronouncement Date 02-03-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 02-03-2011
Date Of Final Hearing 23-02-2011
Next Hearing Date 23-02-2011
Assessment Year 2005-2006
Appeal Filed On 25-07-2009
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH INDORE BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI R.C. SHARMA ACCOUNTANT MEMBER ITA NO.380/IND/2009 A.Y. 2005-06 ASSTT. COMMISSIONER OF INCOME TAX 3(1) BHOPAL APPELLANT VS M/S SHREE JANKI OVERSEAS PRIVATE LIMITED BHOPAL PAN AAHCS-0170-K RESPONDENT APPELLANT BY : SHRI PRADEEP KUMAR MITRA RESPONDENT BY : SHRI M.C. MEHTA WITH SHRI HITESH CHIMNANI O R D E R PER JOGINDER SINGH JUDICIAL MEMBER THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED CIT(A) DATED 2.3.2009 ON THE GROUND THAT THE LEARNE D COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN DELETING THE ADDI TION OF RS.32 01 235/- MADE BY THE ASSESSING OFFICER ON ACC OUNT OF DISALLOWANCE OF DEDUCTION U/S 80IB(3)(II). 2 2. DURING HEARING OF THIS WE HAVE HEARD SHRI PRADE EP KUMAR MITRA LEARNED SENIOR DEPARTMENTAL REPRESENTATIVE AND SHRI M.C. MEHTA ALONG WITH SHRI HITESH CHIMNANI. THE CRUX OF ARGUMENTS O N BEHALF OF THE REVENUE IS THAT THE NO MANUFACTURING IS INVOLVED AS THE ASSESSEE IS MERELY PURCHASING WHOLE PULSES SEEDS WHICH ARE MERE LY BROKEN INTO PIECES WITH THE AID OF MACHINERY THEREFORE THE C LAIM OF DEDUCTION U/S 80IB(3)(II) OF THE ACT WAS RIGHTLY DENIED BY THE AS SESSING OFFICER. IT WAS FURTHER SUBMITTED THAT MAKING OF DAL FROM CHANA TU VAR AND MASOOR IS NOT MANUFACTURING ACTIVITY AND NO NEW ITEM ARTICLE OR THING IS COMING INTO EXISTENCE THEREFORE NO MANUFACTURING IS INVOLVED. RELIANCE WAS PLACED UPON THE DECISION IN ACQUA MINERALS PRIVATE LIMITED V. DCIT; 96 ITD 417 (AHD) AND DXN HURBAL MANUFACTURING (INDIA) PRIVATE LIMITED V. ITO (110 ITD 99 (CHENNAI) CWT V. DEVASAHAYAM; 236 ITR 885 ( MAD) CIT V. GEM INDIA MFG. CO.; 249 ITR 307 (SC) AND CIT V. REL ISH FOODS; 237 ITR 79 (SC). 3. ON THE OTHER HAND THE CRUX OF ARGUMENTS ON BE HALF OF THE ASSESSEE IS THAT A HIGHLY SPECIALIZED PROCESS WITH THE AID OF MACHINERY IS INVOLVED FOR MANUFACTURING OF DAL OUT OF GRAM M OONG URAD MASUR ETC. AS COMMERCIALLY NEW AND DISTINCT END PRODUCT C OMES INTO EXISTENCE. THE LD. COUNSEL FOR THE ASSESSEE ALSO INVITED OUR A TTENTION TO THE PROCESS INVOLVED FOR WHICH OUR ATTENTION WAS INVITE D TO PAGE 3 (PARA D) OF THE IMPUGNED ORDER. THE LD. COUNSEL FOR THE ASSE SSEE ALSO RELIED 3 UPON THE CASES WHICH HAVE BEEN DEALT WITH IN THE IM PUGNED ORDER ESPECIALLY PAGES 5 TO 7. FURTHER RELIANCE WAS PLAC ED UPON THE DECISION IN ITO V. ARIHANT TILES & MARBLES PRIVATE LIMITED; 320 ITR 79 (SC) CIT V. ORACLE SOFTWARE INDIA LIMITED (2010) 320 IR 546 (SC) ALONG WITH THE DECISION OF THE TRIBUNAL IN THE CASE OF ITO V. KAMA L KUMAR AGRAWAL (ITA NO. 170/IND/2003) AND ITA NO. 4/IND/2006 ORDER DATE D JUNE 8 2007. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD . REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. BRIEF FACTS ARE THAT THE ASSESSEE IS A REGISTERED SSI UNIT FOR THE MANUFACTURING OF DIFFERENT KINDS OF DALS WITH THE ANNUAL MANUFACTURI NG CAPACITY OF 7920 MT AND 1080 MT FOR CHURI/CHHILKA CLAIMED DEDUCTION U/S 80IB(3)(II) OF THE ACT AS A SMALL SCALE UNDERTAKING. BASICALLY T HE ASSESSEE IS CLAIMING OF MANUFACTURING DAL FROM CHANA TUAR MASOOR ETC. THE LEARNED ASSESSING OFFICER DENIED THE CLAIMED DEDUCTION ON T HE PLEA THAT NO MANUFACTURING IS INVOLVED IN THE PROCESS ADOPTED BY THE ASSESSEE AS NO NEW ARTICLE OR THING IS COMING OUT OF THE ACTIVITY CARRIED OUT BY THE ASSESSEE. ON APPEAL THE LEARNED COMMISSIONER OF IN COME TAX (APPEALS) DECIDED THE APPEAL IN FAVOUR OF THE ASSES SEE WHICH IS IN CHALLENGE BEFORE THE TRIBUNAL BY THE REVENUE. 5. BEFORE COMING TO ANY CONCLUSION WE ARE REPRODU CING HEREUNDER THE ACTIVITIES DONE BY THE ASSESSEE AND THE PROCESS OF MANUFACTURING :- 4 (I) AS REGARDS INDUSTRIAL ACTIVITIES OF THE APPELLA NT IT IS SUBMITTED THAT THEY MANUFACTURE PULSES WHICH ARE EITHER ARTICLE OR THINGS IN ITS MANUFACTURING UNIT FROM WHOLE GRAMS OR MOONG OR URAD OR MASOOR ETC. IN A HUGE POWER OPERATED PLANT AND MACHINERY AND IN AN INDUSTRIAL BUILDING. THIS IS DEFINITELY AN IND USTRIAL ACTIVITY. THIS ACTIVITY (PULSES MANUFACTURING) INVOLVES FOLLOWING MANUFACTURING PROCESSES : (1) MIXING (PALA) & WEIGHING MIXING IS MAKING A BATCH OF A PARTICULAR QUANTITY OF WHOLE SEEDS OF VARIOUS PRODUCE PURCHASED FROM VARIOUS SUPPLIERS. (2) GRADING AND SORTING THIS IS DONE WITH THE HELP OF A SPECIALLY MADE MACHINE. THIS PROCESS IS DE-STONING PROCESS. IN THIS PROCESS CLAY STONES PIECES AND OTHER FOREIGN MATERIALS ETC ARE RECOVER ED FROM SEEDS. (3) WATERING & OILING IN THIS PROCESS CLEANED RA W MATERIALS IS MADE WET WITH WATER AND OIL. THIS PROCESS NEEDS SKILL AND KNOWLEDGE. WRONG QUANTITY OF WATER & OIL MAY SPOIL ENTIRE BATCH. THIS PROCES S IS PERFORMED BY SKILLED AND EXPERIENCED WORKERS AND ALSO IS SUPERVISED BY SENIOR EXPERIENCED STAFF. 5 (4) DRYING IN THIS PROCESS OILED AND WATERED BATCH IS KEPT FOR DRYING FOR ABOUT 24 HOURS. (5) DE-HUSKING THIS PROCESS IS MAIN MILLING PROCESS AND IN THIS PROCESS COVER OF GRAM MASOOR ETC. IS REMOVED. THIS IS DONE WITH THE HELP OF A PLANT CONSISTING ROLLERS AND ELEVATORS ETC. IN THIS PRO CESS APPROXIMATELY 50% OF DE-HUSKING IS DONE. (6) REPETITION OF PROCESS NO. 3 4 AND 5 IS DONE AGAIN TO 100% DE-HUSKING. (7) SPLITTING THIS ALSO A MILLING PROCESS AND IN THIS PROCESS DE-HUSKED MATERIAL IS BROKEN TO PULSES. TH IS PROCESS ALSO NEEDS SKILL KNOWLEDGE AND EXPERIENCE . (8) DRYING PULSES ARE THEN SENT TO MACHINE DRYERS FOR DRYING. SOMETIMES SUN DRYING IS ALSO DO NE. (9) SORTING THIS IS AN IMPORTANT PROCESS. THIS I S DONE WITH THE HELP OF A MACHINE CALLED SORTEX MACHINE. THIS PROCESS REMOVES UN-HUSKED SEEDS AND ALSO STONES ANY FOREIGN MATERIAL SUB-STANDARD DAL ETC. IT UP GRADES QUALITY OF THE PRODUCT. IT SORTS EQUAL SIZE OF PULSES AND REMOVES CHURI (SMALL AND BROKEN PIECES). THIS IS A BY PRODUCT GENERATED OUT OF THE MANUFACTURING PROCESS. FOR THIS PURPOSE THE 6 ASSESSEE USES SPECIALLY IMPORTED MACHINE FROM JAPAN AND ARE FULLY AUTOMATIC AND COMPUTER OPERATED. (10) POLISHING THIS IS AGAIN A MACHINE PROCESS AND PULSES ARE POLISHED WITH THE HELP OF OIL POWDERS AND BRUSHING IS DONE. THIS PROCESS IS VALUE ADDITION PROCESS. (11) STORING IN TANKS THIS IS DONE WITH THE HELP OF ELEVATORS AND STORAGE IS DONE IN HUGE OF TANKS. (12) WEIGHING AND PACKING AS PER THE REQUIREMENT OF FOREIGN AND DOMESTIC BUYERS PACKAGING OF REQUIR ED SIZE AND WEIGHT AND SPECIFICATION IS DONE USING DIFFERENT TYPE OF PACKING MATERIALS E.G. JUTE BAGS HDPE BAGS POLYTHENE BAGS PRE-PRINTED BAGS ETC. TAGGING AND BATCH PRINTING EXPIRY AND OTHER LEGAL REQUIREMENTS OF PRINTING PACKAGING AND FOOD GRADE S ETC. ARE MET AT THIS STAGE. IN THE LIGHT OF THE AFORESAID PROCESS NOW THE QUES TION ARISES WHETHER THE PROCESS AMOUNTS TO MANUFACTURING ? 6. IF THE TOTALITY OF FACTS ARE ANALYSED WE ARE CO NVINCED THAT IF THE RAW MATERIAL UNDERGOES THROUGH THE AFORESAID PROCESS TH EN A NEW AND DISTINCT COMMERCIAL END PRODUCT COMES INTO EXISTENC E MEANING THEREBY 7 THAT THE WHOLE GRAMS/CHANA/MASOOR/URAD ETC. IS CON VERTED INTO DAL WITH THE AID OF POWER OF POWER OPERATED PLANT AND MACHIN ERY AND A COMMERCIAL DIFFERENT PRODUCT COMES INTO PICTURE. I F WE GO TO THE SELLER AND ASK FOR DAL HE WILL NOT GIVE US WHOLE GRAMS. THE USE OF WHOLE GRAM AND END PRODUCT (DAL) IS DIFFERENT. THE WORD INDU STRY HAS A WIDE IMPORT. WHERE THERE IS A SYSTEMATIC AND ORGANIZED A CTIVITY WITH THE COOPERATION BETWEEN THE EMPLOYER AND EMPLOYEE (THE DIRECT AND SUBSTANTIAL ELEMENT IS COMMERCIAL) FOR THE PRODUCTI ON/OR DISTRIBUTION OF SERVICES AND GOODS CALCULATED TO SATISFY HUMAN WANT S AND WISHES (NOT SPIRITUAL AND RELIGIOUS BUT INCLUSIVE OF MATERIAL T HINGS OR SERVICES GEARED TO CELESTIAL BLISS I.E. EASY MAKING ON A LARGE SCAL E PRASAD OR FOOD) PRIMA FACIE THERE IS AN INDUSTRY IN THAT ENTERPRISE. THE TRUE FOCUS IS FUNCTIONAL AND THE DECISIVE TEST IS THE NATURE OF A CTIVITY WITH SPECIAL EMPHASIS ON THE EMPLOYEE EMPLOYER RELATIONS. A PRO VISION IN THE TAXING STATUTE GRANTING INCENTIVE FOR PROMOTING AND DEVELO PMENT SHOULD BE CONSTRUED LIBERALLY. MANUFACTURE AND PROCESSING ARE NOT CLEARLY DEMARKETING FIELDS. THE TEST OF MANUFACTURE LIES I N THE ANSWER TO THE QUESTION WHETHER WHAT IS PROCESSED OR PRODUCED AS T HE END PRODUCT IS COMMERCIAL KNOWN AS A DIFFERENT PRODUCT FROM THE MA TERIALS OUT OF WHICH IT IS SO PRODUCED. THEREFORE IF THE PRODUCT HAS A DIFFERENT NAME AND IS IDENTIFIED BY THE BYERS AND SELLERS AS A DIFFERENT PRODUCT AND IS BOUGHT AND SOLD AS A DISTINCT PRODUCT FROM ITS RAW MATERIA L ONE CAN SAY THAT IT IS 8 A MANUFACTURED PRODUCT. THERE MAY BE SOME ROOM FOR DEBATE AS TO WHETHER THIS TEST IS FULLY SATISFIED BY EDIBLES THA T COME AS END PRODUCTS FROM THE RAW MATERIALS OUT OF WHICH THEY ARE MADE. BUT THE EXPRESSION PRODUCE HAS TO BE TAKEN IN A MORE LIBERAL SENSE T HAN MANUFACTURE. IF THE END PRODUCT IS DIFFERENT THAT BY ITSELF WOULD SUFFICE TO MEET THE REQUIREMENT OF PRODUCING. FOR GRANTING DEDUCTION U/ S 80IA THE DEPARTMENT IS EXPECTED TO STUDY THE ACTUAL PROCESS UNDERTAKEN BY THE ASSESSEE. SECTION 80IA COMES IN CHAPTER VIA. THAT CHAPTER IN ANY WAY IS A CODE BY ITSELF. IT PROVIDES FOR SPECIAL D EDUCTIONS. 7. OUR AFORESAID OBSERVATION CAN ALSO BE UNDERSTOOD WITH THE HELP OF VARIOUS JUDICIAL PRONOUNCEMENTS. SINCE IT IS THE A PPEAL OF THE REVENUE THEREFORE WE TEND TO DISCUSS THE CASES RELIED UPON BY THE LEARNED CIT DR. IN THE CASE OF CWT V. DEVASAHAYAM (SUPRA) THE HONBLE MADRAS HIGH COURT HAS DELIBERATED UPON THE MEANING OF INDU STRIAL UNDERTAKING WHEREIN THERE WAS PREPARATION OF SWEETMEATS AND BIS CUITS WHICH WERE HELD TO BE NOT MANUFACTURING. IN THE CASE OF CIT V . GEM INDIA MFG. CO. THE HONBLE APEX COURT WITH RESPECT TO DEDUCTION U/ S. 80I HELD THAT CUTTING AND POLISHING UNCUT RAW DIAMONDS DOES NOT A MOUNT TO MANUFACTURE OR PRODUCTION. LIKEWISE IN THE CASE OF CIT V. RELISH FOOD WITH RESPECT TO DEDUCTION U/S 80HH THE ASSESSEE WA S ENGAGED IN PEELING AND FREEZING OF SHRIMPS. SINCE THERE WAS N O ESSENTIAL DIFFERENCE BETWEEN RAW SHRIMPS AND FROZEN SHRIMPS IT WAS HELD THAT THE ASSESSEE 9 WAS NOT ENTITLED TO SPECIAL DEDUCTION. IN THE CASE OF AQUA MINERALS PRIVATE LIMITED FOR THE PRODUCTION OF DEMINERALISED WATER IT WAS HELD THAT THERE IS NO MANUFACTURING WITHIN THE MEANING OF SEC TION 80I. LIKEWISE IN THE DXN HERBAL MFG. (INDIA) (P) LIMITED FILING OF MUSHROOM POWER IN GELATIN CAPSULES TO MAKE IT FIT FOR MARKETING IT WA S HELD THAT IT IS MERELY A PROCESS WHICH DOES NOT AMOUNT TO MANUFACTURE OR PRO DUCTION OF ANY COMMERCIALLY DISTINCT COMMODITY SO AS TO FULFILL CO NDITIONS STIPULATED U/S 80IB OF THE ACT. 8. IN LATER DECISION THE HONBLE APEX COURT IN ARIH ANT TILES & MARBLES PRIVATE LIMITED (2010) 320 ITR 79 (SC) ORDER DATED 2 ND DECEMBER 2009 SAWING MARBLE BLOCKS INTO SLABS AND TILES AND POLISHING IT WAS HELD THAT IT AMOUNTS TO MANUFACTURE OR PRODUCTION W ITHIN THE MEANING OF SECTION 80IA(2)(III) OF THE ACT. IT IS PERTINENT T O MENTION HERE THAT WHILE COMING TO THIS CONCLUSION THE HONBLE APEX COURT A PPLIED THE DECISION PRONOUNCED IN CIT V. SES GOA LIMITED; 271 ITR 331 ( SC) AND CIT V. N.C. BUDHIRAJA & COMPANY; 204 ITR 412 (SC) AND DIST INGUISHED THE DECISION IN RAJASTHAN STATE ELECTRICITY BOARD V. AS SOCIATED STONE INDUSTRIES (2000) AIR 2000 SC 2382 AND AMAN MARBLE INDUSTRIES PRIVATE LIMITED VS. COLLECTOR OF CENTRAL EXCISE (20 030 157 ELT 393 (SC) AND AFFIRMED THE DECISION FROM HONBLE RAJASTHAN HI GH COURT IN ARIHANT TILES & MARBLES PRIVATE LIMITED VS. ITO; 295 ITR 14 8. THE DECISION IN CIT V. BEST CHEM & LIME STONE INDUS TRIES PRIVATE 10 LIMITED; 210 ITR 883 (RAJ) AND CIT V. MYSORE MINERA LS LIMITED; 250 ITR 725 (KARN) ALONG WITH OTHERS WERE CONSIDERED. IN A NOTHER CASE THE HONBLE APEX COURT IN CIT V. ORACLE SOFTWARE INDIA LIMITED (2010) 320 ITR 546 HELD THAT DUPLICATION OF BLANK CD WITH MAST ER MEDIA AMOUNTS TO MANUFACTURE THEREFORE THE DEDUCTION U/S 80IA OF T HE ACT IS AVAILABLE TO THE ASSESSEE. WHILE COMING TO THIS CONCLUSION THE HONBLE APEX COURT RELIED UPON THE DECISION IN TATA CONSULTANCY SERVIC ES VS. STATE; 271 ITR 401 UNITED STATES VS. INTERNATIONAL PAINTS COM PANY (35 CCPS 87 CAD 76) AND GRAMOPHONE COMPANY OF INDIA LIMITED V. COLLECTOR OF CUSTOM; 114 ELT 770 (SC) AND AFFIRMED THE DECISION OF THE HONBLE DELHI HIGH COURT IN 293 ITR 353. IN ANOTHER CASE T HE HONBLE APEX COURT IN INDIA CINE AGENCIES VS. CIT; 308 ITR 98 (S C) WHEREIN THE JUMBO FILMS WERE CONVERTED/CUT INTO SMALL FLAT ROLL S OF DESIRED SIZE WERE HELD TO BE PRODUCTION WITHIN THE MEANING OF SECTION 80HH AND 80I OF THE ACT. WHILE COMING TO THIS CONCLUSION THE HONBLE COURT REVERSED THE DECISION OF HONBLE MADRAS HIGH COURT IN INDIA CINE AGENCIES; 261 ITR 491 AND CIT V. COMPUTER GRAPHICS LIMITED; 285 ITR 8 4 AND CONSIDERED THE DECISION IN CIT V. SINGARENI COLLERIES COMPANY LIMITED; 221 ITR 48 (AP) (PARA 9) CIT V. UNIVMINE PRIVATE LIMITED; 202 ITR 825 (DEL) (PARA 9) CIT V VENKATESWARA HATCHERIES; 237 ITR 174; EM PIRE INDUSTRIES LIMITED V. UNION OF INDIA; 162 ITR 846 (SC) INDIA CINE AGENCIES; 261 ITR 491 (MAD) KHALSA BROTHERS VS. CIT; 217 ITR 185 (CAL) KORES INDIA 11 LIMITED (2005); 1 SCC 385 AMONG OTHERS. THE CHANDI GARH BENCH OF THE TRIBUNAL IN THE CASE OF SMT. KUSUM PROP. KAPOOR STO NE CRUSHER (ITA NO.1057 725 745/CHD/2008) ORDER DATED 31.3.2009 A ND PAWAN SINGH M/S. MAHADEV STONE CRUSHERS (ITA NO.866 TO 868/CHD/ 2008) DATED 31.12.2008 ON THE ALLOWABILITY OF DEDUCTION U/S 80I A HELD THAT IT AMOUNTS TO MANUFACTURE. CONVERSION OF NATURAL LATEX INTO PR ESERVED LATEX WAS HELD TO BE MANUFACTURING AND THUS ENTITLED TO DEDUC TION U/S 80HH BY THE HONBLE KERLA HIGH COURT IN CIT VS. KANAM LATEX IND . P. LTD. (221 ITR 1) (KER). LIKEWISE THE HONBLE MADRAS HIGH COURT I N CIT VS. M.R. GOPAL (58 ITR 598) (MAD) HELD THAT CONVERSION OF BOULDERS INTO STONES AMOUNTS TO MANUFACTURE. LIKEWISE IN CIT VS. TATA L OCOMOTIVE & ENGG. CO. LTD. (68 ITR 325) (BOM) HELD THAT ASSEMBLING BU S/TRUCK FROM IMPORTED PARTS AMOUNTS TO MANUFACTURE/PRODUCTION. E VEN BOOK PUBLISHING BY HONBLE CALCUTTA HIGH COURT IN ADDL. CIT VS. A. MUKHARJI & CO. (113 ITR 718) WAS HELD TO BE MANUFACTURING. THE HONBLE KARNATAKA HIGH COURT IN CIT VS. DARSHAK LTD. (247 ITR 489) HE LD THAT CONVERSION OF PLAIN GLASSWARE INTO DECORATIVE GLASSWARE AMOUNTS T O MANUFACTURE AND THUS ELIGIBLE FOR DEDUCTION U/S 80I. THE HONBLE AP EX COURT IN VIJAY SHIP BREAKING CORPORATION VS. CIT (175 TAXMAN 77) HELD T HAT SHIP BREAKING ACTIVITY RESULT INTO PRODUCTION OF A DISTINCT AND D IFFERENT ARTICLE AND THUS ENTITLED TO DEDUCTION U/S 80HH AND 80I OF THE ACT. THE HONBLE BOMBAY HIGH COURT IN SHIP SCRAP TRADERS VS. CIT (251 ITR 8 06) APPLIED THE 12 YARDSTICKS ADOPTED BY HONBLE APEX COURT IN THE CAS E OF CIT VS. N.C. BUDDHIRAJA & CO. (204 ITR 412) CLEARLY HELD THAT TH E ASSESSEE IS ENTITLED TO DEDUCTION U/S 80HH & 80I. THE HONBLE MADRAS HIG H COURT IN CIT VS. PREMIER TOBACCO PACKERS P. LTD. (284 ITR 222) HELD THAT EVEN TOBACCO CURING IS COMMERCIALLY DIFFERENT COMMODITY. THE HON BLE GUJARAT HIGH COURT IN CIT VS. PRABHUDAS KISHORDAS TOBACCO PRODUC TS (154 TAXMAN 404) (GUJ) HELD THAT BIDI MANUFACTURING AMOUNTS TO MANUFACTURING. THE HONBLE ALLAHABAD HIGH COURT IN CIT VS. SHIV OIL & DAL MILL (153 TAXMAN 27) (ALL) HELD THAT REFINING OF OIL AMOUNTS TO MANU FACTURING. THE PROCESSING OF FILM AND PRINTING PHOTOGRAPHS FROM NE GATIVES WAS HELD TO BE MANUFACTURING ACTIVITY BY HONBLE HIGH COURT OF MADRAS IN CIT VS. JAMAL PHOTO INDUSTRIES (I) (P) LTD. (203 CTR 256). IN ANOTHER CASE IN CIT VS. VINBROS & CO. (2009) (177 TAXMAN 217) (MAD) HELD THAT BLENDING OF LIQUOR AMOUNTS TO MANUFACTURING AND THU S ENTITLED TO DEDUCTION U/S 80IB. IN CIT VS. MAHESHCHANDRA SHARMA (2009) (178 TAXMAN 22) THE HONBLE P & H HIGH COURT HELD THAT ASSEMBLING OF PARTS AMOUNTS TO MANUFACTURE OR PRODUCTION. THE HONBLE M ADRAS HIGH COURT IN CIT VS. BALAJI HOTELS & ENTERPRISES (311 ITR 389 ) HELD THAT PRINTING OF PAPER LABELS CONSTITUTE MANUFACTURING SO AS TO ENTI TLE THE ASSESSEE TO CLAIM DEDUCTION U/S 80IA. THE HONBLE APEX COURT IN CIT VS. EMPTEE POLY YARN P. LTD. (2010) (188 TAXMAN 188) HELD THAT TWISTING AND 13 TEXTRISING OF PARTIALLY ORIENTED YARN (POY) BY USIN G THERMO MECHANICAL PROCESS AMOUNTS TO MANUFACTURE IN TERMS OF SEC. 80I A OF THE ACT. 9. IF THE AFORESAID JUDICIAL PRONOUNCEMENTS ARE KEP T IN JUXTAPOSITION WITH THE FACTS OF THE PRESENT APPEAL SPECIFICALLY T HE INVOLVEMENT OF MANUFACTURING PROCESS AS WE HAVE DISCUSSED IN PARA 5 (SUPRA) WE ARE OF THE CONSIDERED OPINION THAT ASSESSEE IS PRODUCIN G A NEW AND DISTINCT COMMERCIALLY END PRODUCT FROM ITS RAW MATERIAL THE REFORE THE ASSESSEE IS ENTITLED TO DEDUCTION U/S 80IB(3)(II) OF THE ACT THEREFORE WE FIND NO INFIRMITY IN THE STAND OF THE LD. CIT(A). THUS THI S APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 2 ND MARCH 2011. (R.C.SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 2 ND MARCH 2011 COPY TO: APPELLANT RESPONDENT CIT CIT(A) DR G UARD FILE DN/- 14