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2011 (4) TMI 863 - HC - Income TaxDisallowance u/s 37 - The transit flat is exclusively used by the employees of the assessee and the assessee also does not pay any allowance to such employees and no recovery is also made from them for their stay in the transit flat - Held that:- AO in the order of assessment dated March 17, 1997 treated the said expenditure in respect of the holiday home as capital in nature - in the case of Keshoram Industries and Cotton Mills Limited Vs. C. I. T (1989 (6) TMI 10 - CALCUTTA High Court) holding against his client, he does not press the first question as regard transit flat for the employee Deduction u/s 33AB - whether the profit arising out of any amount of tea purchased by the assessee from outside which was required for the purpose of blending with the tea grown in his own garden, should be deducted for the purpose of arriving at the figure of profit of such business of growing and manufacturing tea? - Held that:- If the assessee’s garden grows tea enriched with flavour but lacking in liquor contents, the assessee in order to manufacture good quality of final product of tea will be required to blend some other type of tea enriched with liquor content to have a good quality of the said final product - The requirement of the Section 33AB is that the assessee must grow tea leaves and will also convert those leaves into final product by way of processing - Thus, the profit arising out of selling its grown tea to others without processing and bringing it into final form of “manufactured tea” will not be eligible for deduction under the Section 33AB of the Act - It appears that the purchased amount is very trifling in comparison to the amount grown by the assessee and thus, it is not a case where it can be alleged that the purpose of maintenance of the garden by growing insignificant amount of tea in comparison to the final product is only a device to get the benefit of the Section - Held that: assessees who grow and manufacture different varieties of tea and consequently, do not require purchase of any tea for blending with the final product, can only get the benefit of Section 33AB - Decided in favor of the assessee
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