Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2012 (10) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2012 (10) TMI 621 - HC - Income TaxZarda Yukta Pan Masala - dis allowance of deductions u/s 32AB and 80I - whether a tobacco preparation under Item 2 of Schedule XI of the I.T. Act - Held that:- The percentage of tobacco in the mixture, is not material, in as much as once tobacco is mixed, even in a small quantity, the Pan Masala becomes a tobacco preparation, which is a separate and distinct commercial commodity and clearly identifiable to the consumers, who are addicted to tobacco.In Item No.1 of the list of articles or thing in Schedule XI, the items include beer, wine and other alcoholic spirits.The percentage of alcohol in the spirits is not given. With the same object the percentage of tobacco is also not given in 'tobacco preparation' and in Item No.2 the words 'such as' are indicative and inclusive and do not complete the list of tobacco preparations. The deduction under Section 80I is provided on the income from the manufacture of the articles other than articles or thing in the Schedule XI and which includes in Entry-2, 'tobacco and tobacco preparations, such as cigars and cheroots, cigarettes, biries, smoking mixtures or pipes and cigarettes, chewing tobacco and snuff'. Pan Masala is not a mixture of tobacco but when it is mixed with tobacco, it becomes a tobacco preparation. The deduction under Section 80I is provided on the income from the manufacture of the articles other than articles or thing in the Schedule XI and which includes in Entry-2, 'tobacco and tobacco preparations, such as cigars and cheroots, cigarettes, biries, smoking mixtures or pipes and cigarettes, chewing tobacco and snuff'. Pan Masala is not a mixture of tobacco but when it is mixed with tobacco, it becomes a tobacco preparation - Zarda Yukta Pan Masala is not a tobacco preparation under Item 2 of Schedule XI - deductions under Section 32AB and 80I disallowed - in favour of the revenue
|