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2015 (8) TMI 176 - CALCUTTA HIGH COURT

2015 (8) TMI 176 - CALCUTTA HIGH COURT - TMI - Computation of the quantum of deduction u/s 33AB - legislative purpose, purposive interpretation versus literal construction - activities of sale of tea manufactured out of bought green leaves and sale of purchased tea after blending with the tea manufactured by the appellant were other business activities or were not part and parcel of the business of growing and manufacturing tea - Held that:- As decided in case of Goodricke Group Ltd. vs. Commiss .....

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ing in comparison to the amount grown by the assessee and thus, it is not a case where it can be alleged that the purpose of maintenance of the garden by growing insignificant amount of tea in comparison to the final product is only a device to get the benefit of the section. In our opinion, a purposive interpretation of the aforesaid provision should be made instead of literal construction of the same otherwise, the legislative purpose will be frustrated and in rare cases, where a very few fort .....

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ourt : Three questions were formulated at the time of admission of the appeal out of which two questions have not been pressed by the appellant. The only question pressed by the appellant is question no. (b), which reads as follows: Whether on a true and proper interpretation of section 33AB of the Act, the Tribunal was justified in law in holding that the activities of sale of tea manufactured out of bought green leaves and sale of purchased tea after blending with the tea manufactured by the a .....

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aken : The requirement of section 33AB is that the assessee must grow tea leaves and will also convert those leaves into final product by way of processing. Therefore, the moment the substantial amount of tea, thus, manufactured in the form of final product is grown in the garden of the assessee and such amount of grown tea is converted into the final form by blending with insignificant amount of other tea purchased from outside, such purchased tea from outside for the purpose of blending forms .....

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he does not manufacture any tea in final form, he will not get the benefit of the section as he is only the grower of tea but not the manufacturer. Likewise, if the assessee after growing tea sells part of such grown tea to others without bringing those in the final form but retains the other part and transforms the retained part after blending with tea purchased from other gardens, he will get benefit of deduction only to that part of profit which he earned by selling the final form of tea afte .....

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