TMI Blog1999 (3) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... on 80J of the Income-tax Act, 1961, (hereinafter referred to as "the Act"). The further question to be decided is whether the assessee is an "industrial undertaking". The appeals excepting Civil Appeal No. 2596 of 1997 are directed against the judgments of the Andhra Pradesh and Karnataka High Courts whereby the two High Courts following the decision in the case of CIT v. Sri Venkateswara Hatcheries (P.) Ltd. [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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uce". Neither the word "produce" nor the word "article" has been defined in the Act. When the word is not so defined in the Act it may be permissible to refer to the dictionary to find out the meaning of that word as it is understood in the common parlance. But where the dictionary gives divergent or more than one meaning of a word, in that case it is not safe to construe the said word according to the suggested dictionary 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( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate amount of such profits and gains or ten thousand rupees, whichever is higher." The Finance Act, 1976, inserted section 32A with effect from April 1, 1976, in replacement of development rebate. Section 32A provided development allowance where an industrial undertaking has installed new machinery or plant after March 31, 1976, for the purpose of business of manufacture or production of any article or thing. The relevant 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 s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 964-65 to 1975-76 became partially exempt by way of deduction on fulfilment of certain conditions. This matter may be examined from another angle. As noticed earlier, section 10(27) specifically excluded poultry income from being included in total income. The meaning of total income in section 2(45) of the Income-tax Act is as follows : "...... total income means the total amount of income referred to in section 5, computed in 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut even in other parts of the world, the complicated technology for reducing the incubation period is not economical and viable. Hence, we follow the same 21 days incubation period. The incubation period can be divided into two stages : (a) first 18 days, and (b) last 3 days. For the first 18 days, the eggs are incubated in a large scale in automatic machines where the temperature, humidity and changing of position of the egg every hour 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eggs at a particular temperature. But the coming out of chicks from the eggs is an event of nature. The only difference seems to be that, by application of mechanical methods, the mortality rate of chicks is less and the assessee may get chicks more in number. This, however, would not mean that the assessee produces chicks and that chicks are "articles or things". We are, therefore, of the opinion that the assessee is neither an industrial undertaking 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act, may mean or convey one meaning and another in a different context. The Legislature in its wisdom had chosen to place the processed seeds and fish under the heading "articles or things" in the Fifth Schedule as the Legislature is competent to give artificial meaning to any word. We are, therefore, of the opinion that the meaning assigned to the words "articles or things" in the Fifth Schedule cannot be assigned to the words "articles or things" 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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