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2011 (8) TMI 460 - AT - Income TaxDeduction - whether the assessee is entitled to the benefit of deduction under section 10B of the Income-tax Act, 1961 in regard to its business of manufacturing of gherkin pickles - As section 10B before its substitution w.e.f. 1.4.2001 defined "manufacture" to include "process" - Therefore, the assessee is entitled to the deduction under section 10B of the Act as the assessee is manufacturing gherkin pickles from gherkin for the purpose of deduction u/s 10B - Appeals of the assessee are allowed. Addition - Recoverable advances from farmers - There is no dispute that assessee had given the money for supply of Gherkins to the agriculturists and farmers. There is also no dispute that the concerned farmers or agriculturists failed to supply Gherkins for which advances were given. Gherkins was an essential raw material of the assessee for producing Gherkins pickles.s held by Hon'ble Apex Court in the case of CIT v. Woodward Governor India P. Ltd. [2009 -TMI - 32906 - SUPREME COURT ], the expression "any expenditure" used in section 37 of the Act cover both "expenses incurred" as well as loss even if the "loss" amount had not gone out of the pocket of the assessee - Hon'ble Apex Court also observed that business losses are deductible under section 37(1) of the Act on the basis of ordinary principles of commercial accounting - Decided in favour of assessee.
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