TMI Blog2015 (7) TMI 903X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act, and that the profit derived from production of milk is eligible for deduction u/s. 80IC of the Act. - Decided in favour of assessee. - IT APPEAL NO. 63 (GAU.) OF 2012 - - - Dated:- 22-1-2015 - H.L. KARWA, AND RAJENDRA, JJ. For The Appellant : I. Kitto Zhimomi For The Respondent : Sanjay Modi ORDER H.L Karwa, President - This appeal filed by the Revenue is directed against the order of ld CIT Guwahati, dated 1.2.2012 for the assessment year 2007-08. 2. In the Ground of appeal, the revenue has challenged the action of the CIT(A) in holding that milk is an item of production eligible for deduction u/s. 80 IC of the Act. 3. Briefly stated, the facts of the case are that the assessee is a proprietor of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17,491/-) minus ₹ 9,51,075/-) u/s.80IC of IT. Act, 1961 in computing total income of the assessee for the assessment year 2007-08. Items Sale proceed (i) Milk Rs.75,94,280/- (ii) Cream ₹ 1,97,528/- (iii) Mawa ₹ 60,664/- Total: Rs.78,52,472/- Net profit on above sale proceeds @ 12.11% adopted by the assessee as per audited P L account in respect of M/s. Navneet Diary which comes at ₹ 9,51,075/-' 4. On appeal, ld CIT(A) held that 'Milk' is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g or producing- (i) Milk Powder; (ii) Cheese; (iii) Butterghee; (iv) Infant food; (v) Weaning food; (vi) Malted milk food 3.5 The point is whether the first word (milk) in the items read independently or in conclusion with the word based industries . In order to find the answer it may be useful to look at some of the other items in Schedule 14. Item 4 is Food Beverages Industries. This may read as Food Industries and Beverages Industries. Similarly, meat and poultry Product Industries may be read as Meat Product Industries Poultry Product industries. The milk and milk based industries were definitely not used in a similar way because had it been so, one of the words Milk appearing therein would become superfluou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the language used by the Legislature in SI. No.5 of Fourteenth Schedule is plain and simple and to ascertain the meaning of the same, no resort to any interpretive tools is required. A bare perusal of the SI. No.5 of the said schedule unambiguously shows that besides enlisting milk based product industries manufacturing or producing any of the specified 6 items, it also specifically and expressly includes Milk as an article or thing. Ld counsel for the assessee pointed out that moreover, a reading of the item No.5 of the Fourteenth Schedule as interpreted by the AO in the assessment order, renders the word MILK expressly used by the Legislature in the above item as 'redundant'. According to ld counsel for the assessee, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t has held as under: 'The word production or produce when used in juxtaposition with the word 'manufacture' takes in bringing into existence new goods by a process which may or may not amount to manufacture. It also takes in all the by-products, intermediate products and residual products which emerge in the course of manufacture of goods'(Emphasis supplied) 7. From the above decisions of the Hon'ble Supreme Court, it is clear that by milching the cow, the milkman produces milk though he has not applied any process on any raw material for the purpose of bringing into existence the thing known as Milk . 8. Recently, ITAT Jodhpur Bench in the case of Kwal Pro Exports v. Asstt. CIT [2008] 110 ITD 59 held that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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