TMI Blog1992 (2) TMI 170X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee holding that the assessee cannot be considered a small scale exporter since there was no manufacture or production of goods by it. Appeal preferred therefrom by the assessee was also not successful. Hence, this second appeal by the assessee. 2. The learned representative of the assessee contended that the activities of the assessee includes buying, blending, packing and export of tea as per the samples approved by the buyer. According to him, the assessee is engaged in the activities in processing of goods and hence the assessee is entitled to concessional rate of tax as an industrial company. For this, he placed reliance on a decision of the Calcutta High Court in the case of G.A. Renderian Ltd. vs. CIT (1983) 32 CTR (Cal) 318 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st March, 1979. 4. The question that arises for our consideration is whether the assessee is a small industrial undertaking. The business of the assessee is processing and blending of tea dust and exporting the same. According to the assessee this will come under the definition since it is involved in manufacture or production of good. This issue has come up for consideration in the case of Badrinarayan vs. State of M.P. Ors., where it is held that "When different brands of tea are mixed for the purpose of providing a tea mixture of a different and quality according to a formula, there is plainly and indubitably processing of the different brands of tea, because these brands of tea experienced, as a result of mixing, qualitative chan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e special process or treatment to subject (especially raw material) to a process of manufacture, development or preparation for the market, etc., to convert into marketable from as livestock by slaughtering, grain by milling, cotton by spinning, milk by pasteurising, fruits and vegetables by sorting and re packing". Where, therefore, any commodity is subjected to a process or treatment with a view to its "development or preparation for the market", as for example, by sorting and packing fruits and vegetables, it would amount to processing of the commodity. The nature and extent of processing may very from case to case; in one case the processing may be slight and in another it may be extensive; but with each process suffered, the commodity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claimed interest on packing credit paid to bank to the extent of Rs. 7,061. The authorities below, denied the claim of the assessee. We have heard the parties. In our considered view this deduction can be allowed in view of the decision of the Hon'ble Madhya Pradesh High Court in the case of CIT vs. Vippy Solvex Product Pvt. Ltd. (1985) 47 CTR (MP) 44 : (1986) 159 ITR 487 (MP) where it is held that assessee was entitled to weighted deduction in respect of the interest paid to bank under s. 35B(1)(b)(viii) of the Act. Following the said order of the M.P. High Court, we hold that the assessee is entitled for weighted deduction under s. 35B(1)(b)(viii) in respect of interest on packing credit paid to the bank. Thus, this point is decided in f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely for the development of the business of the assessee in abroad. Hence, this is an allowable expenditure. This point is also found in favour of the assessee. 6. 5. The next ground is in respect of salary, bonus and ex gratia amounting to Rs. 30,477. We have heard the parties on this point. This point is also decided in favour of the assessee, following the order of the special bench of the Tribunal (Bombay) in the case of J. Hemchand Co. Where it is held that 75 per cent of the salary, bonus and ex gratia are allowable deduction. In view of the above, we hold that the assessee is entitled to get weighted deduction in respect of 75 per cent of the salary, bonus and ex gratia as claimed by the assessee. This point is also found in favou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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