TMI Blog2011 (1) TMI 265X X X X Extracts X X X X X X X X Extracts X X X X ..... al activity in which products referred to in Rule 7A are made, certainly such scrap rubber is also an item assessable to Central Income-tax by applying Rule 7A(1) - In fact all items of rubber products or intermediaries and bye products and scrap obtained while processing rubber latex to make the products referred to in Rule 7A are assessable to Central Income-tax and agricultural Income-tax in the ratio stated in the said rule - allow the appeal by setting aside the order of the Tribunal and that of the CIT (Appeals) and by remanding the matter to the Assessing Officer to verify whether income from scrap assessed is obtained in the course of agricultural operations that is in the course of taking yield or whether it is industrial scrap gen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le 7A(1) and (2): "7(A)(1). Income derived from the sale of centrifuged latex or cenex or latex based crepes (such as pale latex crepe) or brown crepes (such as estate brown crepe, remilled crepe, smoked blanket crepe or flat bark crepe) or technically specified block rubbers manufactured or processed from field latex or coagulum obtained from rubber plants grown by the seller in India shall be computed as if it were income derived from business, and thirty-five per cent of such income shall be deemed to be income liable to tax. (2) In computing such income, an allowance shall be made in respect of the cost of planting rubber plants in replacement of plants that have died or become permanently useless in an area already planted, if such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orm, looks like milk and depending upon the variety, and health of the tree, rubber content in the liquid rubber may vary. Rubber latex has short life and rubber in all forms are industrial raw materials used in the manufacture of various products like tyre, tube, flap, glouse, bush, etc. Whatever be the form in which natural rubber is sold, that is even when it is sold in the latex form, it s price is based on dry rubber content (DRC) in the latex. For the purpose of most of the industries, rubber required is in dry smoked sheet form. However, for industries engaged in production of tubes, glouses, baloon, rubber thread, etc., rubber used is in liquid form. Small and medium farmers do not have factories to process rubber latex and therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er from the shell or otherwise falls from the trees on earth and soldifies which is also collected as scrap rubber. In fact sizable quantity of scrap rubber is generated in the course of extraction of rubber latex from trees and these are generally known as tree scrap, shell scrap earth scrap. The sale of these items of scrap rubber obviously cannot be brought to Central Income-tax by applying Rule 7A above referred because such scrap is generated in the course of taking yield which is purely an agricultural operation. However, if any scrap is generated in the industrial activity in which products referred to in Rule 7A are made, certainly such scrap rubber is also an item assessable to Central Income-tax by applying Rule 7A(1). In fact a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
