TMI Blog2001 (9) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... d:- 5-9-2001 - Judge(s) : S. P. BHARUCHA., Y. K. SABHARWAL. and ASHOK BHAN. C.N. Sree Kumar, Advocate, For the appellant B.B Ahuja, Senior Advance ( Rajiv Nanda B.V. Balram Das and Ms, Sushma Suri, Advocate, with him), For the respondent JUDGMENT The judgment of the court was delivered by ASHOK BHAN J. -Aggrieved, by the judgment/order of the High Court (see [1997] 227 ITR 916), the assessee-appellant has come up in appeal. By the impugned judgment, the High Court, in a reference made under section 256(l) of the Income-tax Act, 1961 (for short, "the Act") by the Income tax Appellate Tribunal,. Cochin, (for short "the Tribunal"), has answered the fallowing question of law, in the negative : "Whether, on the facts and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal had held that the assessee was entitled to the investment allowance. Following its earlier decision, the Tribunal upheld the order of the Commissioner of Income-tax (Appeals). The matter was taken up in reference before the High Court. To ascertain the factual position as to what is meant by curing of coffee, the court directed counsel for the parties to produce the order of the Tribunal for the earlier assessment year, which was taken on record. To appreciate as to what is understood by the word "coffee" as is gene rally known in the commercial parlance, the High Court referred to Encyclopaedia Britnnaica volume 6 (1972 edition), and concluded that "coffee" is a beverage made from roasted seeds (beans) of the coffee plant. The s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emises to have a first-hand knowledge of the operations carried on by the assessee-company. The inspection was made by the Tribunal in the presence of both the parties through their representatives. The factual observation of the Tribunal as a result of the inspection found that the following nine processes are involved in curing of coffee : "(1) Receipt of coffee from the estates (2) Storage of coffee in covered godowns (3) Drying of coffee to the required standards prescribed by the coffee hoard in drying yards ; (4) Hulling/pealing/polishing (5) Grading of coffee mechanically (6) Colour sorting ; (7) Garbling and manual grading (8) Out-turning of garbled coffee and (9) Bulking". The Tribunal also found that to deal wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der, a beverage consumed as either a hot or cold drink. At no stage, this colour combination between manufacture and production has its manifestation". The relevant portion of section 52A is reproduced below : "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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est for determination whether manufacture can be said to have taken place is whether the commodity which is subjected to the process of manufacture can no longer be regarded as the original commodity, but is recognized in the trade as a new and distinct commodity. It was observed "Commonly, manufacture is the end result of one or more processes through which the original commodity is made to pass. The nature and extent of processing may vary from one case to another and indeed there may be several stages of processing and perhaps a different kind of processing at each stage. With each process suffered, the original commodity experiences a change. But it is only when the change, or a series of changes, take the commodity to the point where ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
