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2015 (2) TMI 292 - HC - Income TaxEntitlement to deduction u/s. 80I and 80IA - Whether processing of seeds is manufacturing activity ? - activity of testing, gradation, drying, fumigation and coating of seeds - processing of seeds which is not fit for human consumption - Held that:- In view of the matter, from the chart, it appears that the same process also been certified by the Gujarat State Seed Certification Agency and from the certificate issued by the said Agency which clearly describes the manufacturing process, and in view of the two decisions of the Hon'ble Supreme Court, the production of the assessee is not fit for human consumption. The production is not fit for human consumption, and therefore, it changes its original form. If we look at the decision of the Hon'ble Supreme Court in the case of Aspinwall and Co. Ltd. v. Commissioner of Income-Tax, it is said that the word "manufacture" " has not been defined in the Act. In the absence of a definition of the word "manufacture" it has to be given a meaning as is understood in common parlance. It is to be understood as meaning the production of articles for use from raw or prepared materials by giving such materials new forms, qualities or combinations whether by hand labour or machines. If the change made in the article results in a new and different article then it would amount to a manufacturing activity.In that view of the matter, we are of the opinion that the contention raised by the department that it is not a manufacturing process, is devoid of merit and the same is required to be rejected. When the product is to be disposed of immediately even that the product is not fit for human consumption. If it is required to be preserved, it seems to be a manufacturing process, and therefore, in our view, the finding of the Tribunal is misconceived and required to be reversed and the view taken in the subsequent year is accepted. Also going through the letter, from which, it is clear that more than 10 employees are working there, which fulfills the condition, and therefore, the assessee is entitled for the benefit under sec. 80IA of the IT Act. - Decided in fvaour of assessee.
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