TMI Blog1998 (4) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue. The assessee is engaged in the business of processing and exporting shrimps. Its claim for deduction under section 80HH of the Act was rejected by the Income-tax Officer on the ground that such processing does not amount to production or manufacture. The Commissioner of Income-tax, however, was of the view that it does amount to manufacture and allowed the assessee's appeal. The Revenue carried the matter further in appeal to the Tribunal which agreed with the view of the Commissioner. The Tribunal relied upon the decision of the Karnataka High Court in the case of Sterling Foods v. CIT [1984] 150 ITR 292, where the question did not arise for consideration and the decision of the Delhi High Court in the case of Delhi Cold Storag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld that on the application of the test formulated in the case of Pio Food Packers [1980] 46 STC 63 (SC), followed in the case of Sterling Foods [1986] 63 STC 239 (SC), it was clear that processed or frozen shrimps, prawns and lobsters are commercially regarded the same commodity as raw shrimps, prawns and lobsters. The court observed: "When raw shrimps prawns, and lobsters are subjected to the process of cutting of heads and tails, peeling, deveining, cleaning and freezing, they do not cease to be shrimps, prawns and lobsters and become another distinct commodity. They are in common parlance known as shrimps, prawns and lobsters. There is no essential difference between raw shrimps, prawns and lobsters and processed or frozen shrimps, praw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... commercially and in common parlance the same article as chicken. The enunciation made by the Supreme Court regarding the result of the processing of shrimps in such a lucid manner, one would have expected, would make any litigant realise the futility of any further argument on the question in issue here. However, counsel for the assessee made a valiant attempt to sustain the order of the Tribunal and referred to a number of decisions rendered by this court and other High Courts on the question as to whether the processing of sea foods results in the manufacture of a new article, and relying on those decisions, sought to contend that processing of shrimps by the assessee would result in manufacture and production of a new article which was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee also relied on the decision of the apex court in the case of CIT v. N. C. Budharaja and Co. [1993] 204 ITR 412, in support of his submission that by the processing of shrimps, these are "produced" even if they are not manufactured. Counsel relied in particular on the following passage at page 423 of the judgment: "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 manufacture of goods." The passage so relied on by counsel is only a part of the judgment of the apex court in the case of D ..... X X X X Extracts X X X X X X X X Extracts X X X X
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