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2015 (5) TMI 653 - HC - Income TaxEligibility for deduction under Section 80IB(4) - Whether the conversion of gram Dal into Besan powder, by a process of mere roasting and grinding, amounts to manufacture? - Held that:- Applying test given in Idandas versus Anant Ram Chandra Phadke (dead) by L.Rs., [1981 (11) TMI 185 - SUPREME COURT] it can conveniently be held that converting gram Dal into Besan will amount to manufacturing process because:i) gram Dal loses its shape and identification as in the case of wheat which is converted into flour;ii) the end product i.e. Besan can be said to be different from that of gram Dal. It is through process of labour and machinery that Besan is produced;iii) Gram Dal and Besan are treated as different commercial products. Indisputably, gram Dal also undergoes same process for being converted into Besan which is undergone by the wheat for manufacturing wheat flour. In view of the aforesaid, it can safely be concluded that conversion of gram Dal into Besan amounts to manufacture and consequently the assessee is entitled to the deduction under Section 80IB(4) of the Income Tax Act. - Decided in favour of assesse. - Decided in favour of the assessee Eligibility for deduction under Section 80IB (4) - whether necessarily to be computed after allowing depreciation under Section 32? - Held that:- Profits eligible for deduction under Section 80IB (4) of the Act though are necessarily to be computed after allowing depreciation under Section 32 of the Act, but the same would apply only from April 1, 2002, when the amendment came into force and will not apply to earlier years. See CIT v. Mahendra Mills [2000 (3) TMI 3 - SUPREME Court] - Decided in favour of the assessee Condition of ten or more workers to be employed in the manufacturing process as specified in section 80IB(2)(iv) - whether could be said to be complied with, especially when ten or more workers were actually engaged on only 73 days during the entire year? - Held that:- Once, it is established that the assessee had not employed 10 or more workers during the substantial part of the year, we are left with no other option but to answer the question in favour of the revenue - Decided against the assessee.
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