TMI Blog2015 (6) TMI 238X X X X Extracts X X X X X X X X Extracts X X X X ..... got a limited license to use the system for specified outlet only and the assessee did not have any right to transfer the license nor could sublicense. Further, the licensor had the right to entry to safeguard the system licensed to the assessee. Further, the assessee was liable to pay a fixed percentage of its sale as license fee to the licensor. Thus, ld. CIT(A), considering these facts, rightly observed that assessee had not received any permanent or enduring benefit through such license, which was limited to use by the assessee in the prescribed manner and liable to be rescinded by the licensor in certain conditions - Decided against revenue. - ITA No. 2123/Del/2013 - - - Dated:- 23-3-2015 - Shri S.V. Mehrotra And C.M. Garg JJ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ears which have been deleted by ld. CIT(A) and against the ld. CIT(A) s order, the Tribunal dismissed the revenue s appeal. 4. Brief facts of the case are that assessee company was carrying on a food and beverage business through restaurant, home and office delivery, catering and dispensing of pizzas, pastas, health food and other food and beverages prescribed. The assessee had claimed additional depreciation of ₹ 3,28,374/- on the ground that it was engaged in the manufacture or production of food articles which were different from raw material. The AO denied the assessee s claim. However, ld. CIT(A) deleted the disallowance. 5. Having heard both the parties we find that ld. CIT(A) following orders for AY 2006-07, 2007-08 and 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed and saut ed pastas. 3.6. Ld. Counsel relied on Finance (No. 2), Act 2009, brought on statute w.e.f. 1-4-2009, a definition of the term manufacturing by inserting a new clause (29 BA) to section 2 as under: (29BA) manufacture , with its grammatical variations, means a change in a non-living physical object or article or thing, - (a) Resulting in transportation of the object or article or thing into a new and distinct object or article or thing having a different name, character and use; or (b) bringing into existence of a new and distinct object or article or thing with a different chemical composition or integral structure. The above amendment is clarificatory in nature. In view of the above definition, the food item ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een controverted by the Ld. D.R. by bringing any contrary material on record. We further find that the Hon ble J.K. High Court in the case of Pankaj Jain (supra) after distinguishing the Hon ble Apex Court in the case of Indian Hotels (supra) has held the manufacture of bread to be a manufacturing activity. Thus, in view of the totality of facts of the case, we hold that the issue before us is covered with the decision of Hon ble J.K. High Court in the case of Pankaj Jain Prop Aagan Food Industries (supra) in favour of the assessee and we are of the view that the assessee is an industrial undertaking and the activity of production of the foodstuff is a manufacturing activity (except for the items outsourced from other parties). 3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h of the ITAT in the case of Deepkiran Foods (P) Ltd. (supra) in which the manufacturing of eatables like paratha, samosa, dhokla have been held to be a manufacturing process. In this judgment the ratio of decision of Hon ble Supreme Court in the case of Indian Hotels Ltd. (supra), relied upon by the assessing officer has been has been considered and held to be on distinguishable facts. The assessing officer has held that eatables retained the characteristics of original ingredients. This assumption has been categorical dislodged by ITAT Ahmedabad Bench by holding that the raw material being in the form of wheat, potato etc. are totally different which is a new commercial commodity called by various names and distinctly sold in the market. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nue s appeal by observing as under: 5. We have heard rival submissions and gone through the entire material available on record. Apropos the issue of royalty, the ITAT in earlier years has decided the same in favour of the assessee. Respectfully following the same, we dismiss ground no. 1 raised by the revenue. 7.1. Since the facts are identical with earlier years, therefore, we do not find any reason to interfere with the findings of ld. CIT(A) on this issue, particularly because the assessee got a limited license to use the system for specified outlet only and the assessee did not have any right to transfer the license nor could sublicense. Further, the licensor had the right to entry to safeguard the system licensed to the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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