TMI Blog1994 (11) TMI 105X X X X Extracts X X X X X X X X Extracts X X X X ..... tled to relief under section 80J of the Income-tax Act, 1961, in respect of the income derived by it from processing of prawns ?" The assessee is a registered firm deriving income from business of processing of prawns. In the assessment of its income for the assessment year 1980-81, it claimed relief under section 80J of the Act on the footing that it was engaged in the manufacture or processing of articles. The Income-tax Officer rejected this claim of the assessee on the ground that the expression "processing" did not find a place in section 80J of the Income-tax Act, 1961 ("the Act"). The assessee appealed to the Commissioner of Income-tax (Appeals). The Commissioner (Appeals) held that processing of prawns amounted to manufacture of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertaking employs ten or more workers in a manufacturing process carried on with the aid of power, or employs twenty or more workers in a manufacturing process carried on without the aid of power. It is evident from these conditions that in order to claim any relief under section 80J, the undertaking concerned must manufacture or produce articles. It is a condition precedent. The question that arises for consideration is whether processing of prawns amounts to manufacture or production of articles within the meaning of section 80J(4) of the Act. According to learned counsel for the assessee, processing of prawns amounts to manufacture. In support of this contention, reliance is placed on the decision of the Madras High Court in CIT v. Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Supreme Court was required to consider whether shrimps, prawns and lobsters, when subjected to the process of cutting of heads and tails, peeling, deveining, cleaning and freezing, retain their original character and identity or become another distinct commodity. The Supreme Court observed that the test which has to be applied for the purpose of determining whether a commodity subjected to processing retains its original character and identity is whether the processed commodity is regarded in the trade by those who deal in it as distinct in identity from the original commodity or it is regarded, commercially and in the trade, the same as the original commodity. Applying the above test, it was held by the Supreme Court in Sterling Foo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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