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2016 (3) TMI 270 - AT - Income TaxEligibility of deduction u/s 80IC on freezing charges - Held that:- AO is required to verify whether that the nature of such income is derived from the eligible undertaking or not. If the answer found to that question is yes then the deduction should have been allowed to the assessee on this income. In our view this income forms part of the composite activity of processing of vegetables and certainly eligible for deduction u/s 80IC of the Act. The ld. AR also aptly relied on the Britannica Encyclopedia, Wikipedia where freezing is considered as one of the process of the processing of vegetables etc. It is not the case of the AO that freezing charges does not form part of the processing of vegetables and it is altogether different source of income or different business activity of the assessee. Only reason advanced by AO is that receipt in income is storage charges. Therefore, we do not have any hesitation in in holding that freezing charges earned by the assessee are part of the composite activity of processing of peas. The decision relied upon by the ld. DR of Hon‟ble Supreme Court in case of Liberty India Vs. CIT [2009 (8) TMI 63 - SUPREME COURT ] does not apply to the facts of this case as in that case held that the DEPB/ duty Drawback which has received from the Govt. of India to support the assessee are not income derived from the industrial undertaking. Here in this case freezing activity, which is carried out by the assessee is part of the composite activity of processing of vegetables. It is not the case of the revenue that freezing activity are not at all required to carry out-processing of vegetable performed by the assessee of Mother Dairy Food Pvt. Ltd. Therefore, we confirm the order of the learned Commissioner of Income tax (Appeals) and held that freezing charges earned by the assessee is an integral part of the processing of vegetables and therefore is eligible for deduction u/s 80IC of the Act. - Decided in favour of assessee
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