TMI Blog2013 (11) TMI 909X X X X Extracts X X X X X X X X Extracts X X X X ..... l - Once tobacco is mixed, even in a small quantity, the Pan Masala becomes a tobacco preparation, which is a separate and distinct commercial commodity - Decided in favour of Revenue. - Income Tax Reference No. 94 of 1995 - - - Dated:- 14-12-2012 - Hon. Sunil Ambwani And Hon. Aditya Nath Mittal,JJ. ORDER Heard learned counsel for the parties. This income tax reference has been made by the Income Tax Appellate Tribunal, Allahabad Bench, Allahabad in R.A. Nos.4, 5 and 6 (Alld) of 1995 for the assessment year 1990-91 and 1991-92, CIT, Kanpur v. M/s Kothari Products Ltd., Kanpur for the opinion of the High Court on the following questions of law:- "1. Whether on the fact and circumstances of the case, the Hon'ble ITAT was justif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f sub-section (1) of Section 32AB of the Income Tax Act. It is admitted that the deduction under Section 80I and Section 32AB are available, unless the product so manufactured falls in the prohibited category as given in Schedule XI. Item 2 of the List of Articles or Things in the Schedule XI includes:- "2. Tobacco and tobacco preparation, such as, cigars and cheroots, cigarettes, biris, smoking mixtures for pipes and cigarettes, chewing tobacco and snuff." The deduction under Section 80I were denied to the assessee for the assessment year 1988-89 on the ground that it is manufacturing tobacco products. It is submitted by Shri S.K. Garg appearing for the assessee that for the assessment year 1988-89 in RA No.242 (Alld)/1992 the ques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... show that any question was raised or considered. It was only an opinion of the High Court that no question of law arise, which was upheld by the Supreme Court. The question still remain undecided. In V.M. Salgaokar Bro. Pvt. Ltd. v. CIT, (2000) 5 SCC 373; Kunhayammed v. State of Kerala, (2000) 6 SCC 359; U.P. State Road Transport Corporation v. Omaditya Verma, (2005) 4 SCC 424; Satrucharla Vijaya Rama Raju v. Nimmaka Jaya Raju, (2006) 1 SCC 212, the Supreme Court held that the dismissal of the Special Leave Petition in limine does not operate as confirmation of the reasoning in the decision sought to be appeal against. Such an order does not constitute law. 15. The deduction under Section 80I is provided on the income from the manufact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cise and Salt Act. 17. In the present case we are concerned as to whether 'Zarda Yukta Pan Masala' is a tobacco preparation. The percentage of tobacco in the mixture, is not material, in as much as once tobacco is mixed, even in a small quantity, the Pan Masala becomes a tobacco preparation, which is a separate and distinct commercial commodity and clearly identifiable to the consumers, who are addicted to tobacco. 18. In Item No.1 of the list of articles or thing in Schedule XI, the items include beer, wine and other alcoholic spirits. The percentage of alcohol in the spirits is not given. With the same object the percentage of tobacco is also not given in 'tobacco preparation'. 19. In Item No.2 the words 'such as' are indicative and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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