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TMI Blog1999 (3) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... . [1988] 174 ITR 231 (AP), rejected the applications of the Revenue filed under section 256(2) of the Act holding that the business of hatchery comes within the meaning of the expression "an industrial undertaking producing articles or things" and in one case answered the questions in favour of the assessee. Whereas in Civil Appeal No. 2596 of 1997, the Bombay High Court has rejected the application of the assessee under section 256(2) of the Act following the decision in the case of CIT v. Deejay Hatcheries [1995] 211 ITR 652 (Bom), wherein it was held that the business of hatchery cannot be termed as an industrial undertaking producing articles or things. That is how both sets of appeals are before us. The respondents in these civil appeals and the appellant in Civil Appeal No. 2596 of 1997 (hereinafter referred to as the assessee) have poultry farms and they run hatcheries where eggs are hatched on a large scale by adopting the latest scientific and technological methods. The aforesaid questions arose when the assessees in connection with their income-tax assessments for the relevant years claimed that since they are industrial undertakings engaged in the business of producing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctionary meaning of that word. In such a situation, the word has to be construed in the context of the provisions of the Act and regard must also be had to the legislative history of the provisions of the Act and the scheme of the Act. It is a settled principle of interpretation that the meaning of the words, occurring in the provisions of the Act must take their colour from the context in which they are so used. In other words, for arriving at the true meaning of a word, the said word should not be detached from the context. Thus, when the word read in the context conveys a meaning, that meaning would be the appropriate meaning of that word and in that case we need not rely upon the dictionary meaning of that word. Viewed in this light what we find is that section 10(27) of the Act was inserted in the Act through the Finance Act, 1964. The purpose of enacting section 10(27) was to provide incentive to poultry farming, which includes the business of hatchery, by way of giving exemption from income-tax on income from such business. Initially, the said exemption was given for the years 1965, 1966 and 1967 and was in the following terms : "...any income derived from a business of l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t portion of section 32A runs thus : "32A(1). In respect of a ship or an aircraft or machinery or plant specified in sub-section (2), which is owned by the assessee and is wholly used for the purposes of the business carried on by him, there shall, in accordance with and subject to the provisions of this section, be allowed a deduction, in respect of the previous year in which the ship or aircraft was acquired or the machinery or plant was installed or, if the ship, aircraft, machinery or plant is first put to use in the immediately succeeding previous year, then in respect of that previous year, of a sum by way of investment allowance equal to twenty-five per cent. of the actual cost of the ship, aircraft, machinery or plant to the assessee :... (iii) in a small-scale industrial undertaking for the purposes of business of manufacture or production of any other articles or things." The relevant portion of section 80J runs as under : "(1) Where the gross total income of an assessee includes any profits and gains derived from an industrial undertaking or a ship or the business of a hotel, to which this section applies, there shall, in accordance with and subject to the provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the manner laid down in this Act." Section 14D of the Income-tax Act deals with one part of the total income, namely, profits and gains of business. Section 29 of the Income-tax Act, deals with deductions from the profits and gains. Section 32A is one of the sections dealing with such deductions. Therefore, the income from poultry farming being outside the scope of total income by virtue of the omitted section 10(27) of the Act, there was no question of application of sections 32A and 80J to it at least when we find that section 80JJ was consciously simultaneously re-enacted on the omission of section 10(27) of the Act specially for those who were engaged in the business of poultry farming. If omitted section 10(27) and sections 32A, 80J and 80JJ are read together along with the legislative history, it is evident that the provision giving benefit to those who were engaged in running poultry farms was separate and distinct from the provisions which provided incentive to industrial undertakings engaged in the business of manufacturing or producing articles. Thus, if the expression industrial undertaking for the purpose of business of manufacture or production of an article or thin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is done automatically. After completion of 18 days the same eggs are transferred to another machine in which, except turning, the rest are the same like the above machine. On completion of 21 days, the chicks will be out from the eggs. (5) Once the chicks are out the male and female are separated. This process is called sexing. Two methods are in existence. One is the Japanese event method and the second is by a machine. In both the methods accuracy remains almost the same. In case of machine sexing the chick mortality will be about 2 per cent. whereas in the Japanese method this mortality does not occur. Once the sexed females (in case of layers) have been vaccinated against various diseases they are sent to the farmers. (6) It is also stated that in modern hatchery operations there is a pooling of the following factors : (1) capital, (2) labour, (3) power, (4) plant and machinery, (5) artificial hatching, (6) research, (7) technology, (8) large-scale production, (9) prevention of diseases, (10) quality of chicks-(a) protection against diseases-less mortality, (b) chicks-better yield, larger number of eggs, size of eggs, (c) less feed consumption." Learned counsel for the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndertaking nor does the business of hatchery carried out by the assessee fall within the meaning of section 32A and section 80J of the Act. It was then urged by learned counsel for the assessee that the Act uses the words "articles or things" at several places and the meaning assigned to them in other places of the Act should also be assigned under section 32A and section 80J of the Act. The Fifth Schedule to the Act sets out a list of items which are treated as articles or things manufactured or produced for the purpose of section 33(1)(b) of the Act. In this Schedule we find that processed seeds which are products of plants have been shown as "articles or things". Similarly, item No. (30) of the said Schedule is "fish", which is an animate object, it has been shown under the heading "articles or things". On the strength of the meaning assigned to articles and things in the Fifth Schedule to the Act, it was urged that hatching of chicks is also production of "articles or things". It is, no doubt, true that processed seeds and fish have been described under the heading "articles or things" in the Fifth Schedule. Generally, the same words in a statute have the same meaning whenever ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s" used in sections 32A and 80J of the Act. Learned counsel for the assessee relied upon several decisions under the Sales Tax Acts, Central Excise Act and the provisions of other statutes for the contention that "article" includes goods and goods could be an animate object and, viewed in this light, the hatching of eggs would come within the meaning of the word "produce" which is of wider import than the word "manufacture". No doubt, several Sales Tax Acts have included animate things for the purpose of levying tax on sales. But the meaning assigned to a particular word in a particular statute cannot be imported to a word used in a different statute. We, therefore, reject the submissions of learned counsel for the assessee. For the aforesaid reasons, we hold that the decision of the Andhra Pradesh High Court in the case of CIT v. Sri Venkateswara Hatcheries (P.) Ltd. [1988] 174 ITR 231, does not lay down the correct view of law, whereas we approve the decision of the Bombay High Court in the case of CIT v. Deejay Hatcheries [1995] 211 ITR 652. The result of the aforesaid discussion is that the assessee is neither an industrial undertaking nor is it engaged in the business of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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