The Tax Publishers2019 TaxPub(DT) 2400 (Mad-HC) : (2019) 307 CTR 0816 : (2019) 263 TAXMAN 0294

INCOME TAX ACT, 1961

Section 80IA/IB

When paddy in the husk s converted into rice by the process of de-husking of manual or mechanical process it cannot be said, by any stretch of imagination, that there is no transformation of article as a husked Paddy is not a de-husked Rice, and not only the form undergoes a change but also value addition happens by such process and a different commercial article undoubtedly comes into being, therefore, process of dehusking of Paddy, and conversion into rice amounted to 'manufacture or production' and no benefit under section 80-IA/80-IB could be denied.

Deduction under section 80-IA/80-IB - Manufacture or production - Process of dehusking of paddy and conversion into rice -

Question arose for consideration was whether process of dehusking of Paddy, and conversion into rice with the help of labour and machines amounted to 'manufacture or production' for the purpose of section 80-IA/80-IB.Held: The words 'manufacture or production' cover within their ambit any activity by which, a different commercial article, having a different commerical value, is brought into existence. When Paddy in the husk is converted into rice by the process of dehusking, by manual or mechanical process it cannot be said, by any stretch of imagination that there is no transformation of article as a husked Paddy is not a de-husked rice, and not only the form undergoes a change but also value addition happens by such process and a different commercial article undoubtedly comes into being. Therefore, process of dehusking of Paddy, and conversion into rice amounted to 'manufacture or production' and no benefit under section 80-IA/80-IB could be denied.

REFERRED : CIT v. Sesa Goa Ltd., (2004) 271 ITR 331 (SC) : 2004 TaxPub(DT) 1921 (SC) and also CIT v. N.C. Budharaja and Company & Anr. (1993) 114 CTR (SC) 420 : 1993 TaxPub(DT) 1502 (SC) and Aman Marble Industries (P) Ltd. v. CCE 2003 (157) ELT 393 (SC).

FAVOUR : In assessee's favour.

A.Y. : 1999-2000 to 2003-2004



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