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2020 (3) TMI 130 - HC - Income TaxDeduction u/s 80-IB - whether production of poultry feeds constitutes manufacture? - HELD THAT:- New definition of “manufacture” which is there in the said Act from April 1, 2009, as stated in paragraph 5 above, it will be clear that all that is necessary to take an activity out of the realm of mere process to that of manufacture, would be that “the application of processes brought out a change to take the commodity to a commercially different and distinct commodity that it could no longer be considered as the original commodity”. This also satisfies the first limb being Section 2(29-BA)(a) of the said Act, and the definition having two disjunctive clauses, it is clear that there does not have to be change of chemical composition of the end product from that of the original ingredients, to take an activity out of the purview of an ordinary process and constitute manufacture as argued by the Revenue. This is in accordance with the law laid down by the Hon'ble Supreme Court in JALANI ENTERPRISES [2011 (3) TMI 311 - SUPREME COURT] As apparent from the facts on record as in paragraphs 6 and 7 of this judgment, where I have set out and dwelt at length on the stages of the process involved, and the end product and its separate commercial utility and identity from that of the original ingredients, it is clear that poultry feed is not merely rice bran or maize or vitamins or minerals but a mixture of all in calculated proportions through a process involving mills and manufacturing by the use of machinery which run on electricity and where the end product being the pellet is wholly different from each of the ingredients and results in a product which is commercially different and distinct as a commodity so that it cannot be considered as any of the original commodities which were used as ingredients. As a result, the question of law framed by this Court as in paragraph 3 of this judgment is answered against the revenue and it is held that the conclusion of the learned tribunal that production of poultry feeds constitutes manufacture is not perverse. Consequentially, appeal of the Revenue is dismissed and the order of the learned tribunal is confirmed. The Revenue shall bear the costs of the appeal assessed at 1000 GMs. - Decided in favour of the assessee.
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