| The Tax Publishers2020 TaxPub(DT) 5266 (Mad-HC) : (2021) 430 ITR 0199 INCOME TAX ACT, 1961
Section 10B
Where assessee was engaged in the activity of manufacturing and processing of crabs, a sea product and claimed deduction under section 10B, considering that even though what was canned was crab meat, but the assessee's case was that activity undertaken by it produced a distinct product, which was not the same as the raw material, which was a live crab, therefore, matter was remanded to AO to take a fresh decision in the matter.
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Deduction under section 10B - Allowability - 100% export oriented units - Activity of manufacturing and processing of crabs, a sea product
Assessee was engaged in the activity of manufacturing and processing of crabs, a sea product. Issue arose as to whether or not processing, preservation and packaging of marine products would amount to manufacture or production of article or thing, so as to be eligible for deduction under section 10B. Held: Tribunal held that there was no change in substance used in live crab or used it as by extracting as it meat from the same live crab. The crab meat was crab meat only. The Tribunal concluded by saying that the input and output was the same, which was crab only. There was no dispute to the fact that what was canned was crab meat, but the assessee's case was that activity undertaken by it produced a distinct product, which was not the same as the raw material, which was a live crab. Appeal was allowed and matter was remanded to AO to take a fresh decision in the matter.
REFERRED : Aspinwall & Co. Ltd. v. CIT 2001 (170) CTR 0068 (SC) : 2001 TaxPub(DT) 1611 (SC), CIT v. Sterling Foods 1999 TaxPub(DT) 1271 (SC), Pr. CIT v. Sona Vets (P) Ltd. (2020) 424 ITR 0387(Cal) : 2020 TaxPub(DT) 1462 (Cal-HC), CIT v. Deco De Trend 2020 TaxPub(DT) 1112 (Mad-HC), CIT v. Muthuramalingam Modern Rice Mill 2019 TaxPub(DT) 2400 (Mad-HC), DXN Herbal Manufacturing (India) (P) Ltd. v. ITO 2018 TaxPub(DT) 4764 (Mad-HC), Nishant Export v. Asstt. CIT (2018) 401 ITR 401 (Kerala High Court) : 2018 TaxPub(DT) 828 (Ker-HC), M/s. ACE Multi Axes Systems Ltd. v. Dy. CIT (2014) 367 ITR 266 (Karn-HC) : 2014 TaxPub(DT) 3360 (Karn-HC), CIT v. S.K. Transformer (P) Ltd. 2014 TaxPub(DT) 2392 (All-HC), CIT v. Deco De Trend (2013) 94 DTR 0073 (Mad) : 2013 TaxPub(DT) 2745 (Mad-HC), CIT v. Arun Excello Foundations (P) Ltd. 2013 TaxPub(DT) 0373 (Mad-HC), CIT v. Gitwako Farma (I) (P.) Ltd. 2011 TaxPub(DT) 931 (Del-HC), CIT v. Poyilakada Fisheries (P) Ltd. (2001) 241 ITR 195 (Ker) : 2000 TaxPub(DT) 0859 (Ker-HC), CIT v. George Maijo 2001 TaxPub(DT) 87 (Mad-HC), CIT v. Marwell Sea Foods 1987 TaxPub(DT) 1374 (Ker-HC), Philips Foods India (P) Ltd. v. Asstt. CIT (2011) 332 ITR 471 (Delhi) : 2011 TaxPub(DT) 931 (Del-HC) and B.G. Chitale v. Dy. CIT (2008) 115 ITD 97 (SB) (Pune-Trib) : 2008 TaxPub(DT) 2066 (Pune-Trib),
FAVOUR : Matter remanded.
A.Y. : 2005-06 & 2011-12
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