TMI Blog2021 (8) TMI 674X X X X Extracts X X X X X X X X Extracts X X X X ..... rvative chemicals and then cut into pieces, removing the defective fruits and then cut into slices and packed into the bottles as sweet hot pickles. All these processes clearly reveal that the original commodity of vegetable gherkins transform into pickles, had the same identity as the original gherkins and it was not transformed into new commodity. The authorities relied on by the respondent / Department are squarely applicable to the facts of the case and on the other hand, the authorities relied on by the appellant are not supporting his contentions rather it relates to the industrial activities, which is totally different from the facts of the instant case. The questions of law are answered accordingly - assessee is not entitled for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacture' ? 3. Heard Mr.G.Basker, learned counsel for the appellant and Mr.J.Narayanaswamy, learned Senior Standing Counsel for the Respondent. 4. Facts of the case are as follows: The Assessee is engaged in business of manufacture and export of Agro products. The appellant has export oriented units in other state which have been duly approved by the Government of India. The appellant is engaged in manufacturing hot and sweet pickles out of gherkins and other agricultural commodities. The appellant has full fledged manufacturing unit and carries out manufacturing processes in its factories. In the returns of income filed by the appellant for the Assessment Years 2001-02, 02-03 and 03-04, the appellant claimed relief under S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and export of Agro products. So he is entitled for deduction of Income Tax under Section 10(B) of Income Tax Act. 6. The appellant contended that the Assessing Authority erroneously applied the rational of the decisions of the Hon'ble Supreme Court in the case of the India Hotels Company Ltd. Vs. CIT 245 ITR 538 wherein it has been held that the process of conversion of raw gherkins to bottled pickle does not amount to manufacturing activity. Against which they preferred appeal to the Commissioner of Income Tax in ITA No.147 of 2006-07. In the said appeal the assessee's contention was accepted and concluded that the process adopted by the assessee amount to manufacturing activity and they are entitled for deduction and relief u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty would fall in the category of manufacture or production under s.80-IA - ...... ......Therefore, the activity undertaken by the assessee constitutes manufacture or production and they are entitled to benefit of s.80- IA 8. By placing reliance on the above decision it was argued that the changes made in the article raw gherkins resulted in a new sweet and hot pickles. Thereby, it amount to manufacturing activity. 9. By way of reply, the learned counsel for the Authority submits that the assessee was doing only the processing work and was not involved in the manufacturing activity and producing a new article. In this regard he relied, the India Hotels Company Ltd. Vs. Income Tax Officer reported in (2000) 112 Taxman 46 (SC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prawns and lobsters? The court held that despite such processing they continue to possess their original character and identity and even though processing was necessary for making them fit for the table. The Court referred to the decision of the Supreme court of the United States in East Texas Motor Freight Lines v. Frozen Food Express 100 L.Ed., 917 where the question was whether dressed and frozen chicken was a commercially distinct article from the original chicken. The court relied upon the following passage from the said judgment: .... there is hardly less difference between cotton in the field and cotton at the gin or in the bale or between cottonseed in the field and cottonseed at the gin, than between a chicken in the pen an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss of manufacturing of goods? As already stated, the Kerala High Court in CIT v. Casino (Pvt.) Ltd. MANU/KE/0107/1972: [1973] 91ITR289 (Ker) has taken the view that the expression manufacture of goods referred only to the activity of a manufacturing concern and not the activity of a trader. Further, the expression used in s.2(7)(d) of the Finance Act, 1966, is manufacture of good . The question is whether the assessee in this case can be said to manufacture of goods. We are the view that the word goods has been used here in the sense of merchandise, that is, articles for sale. The expression goods if understood in a commercial sense will not include the eatables prepared in a hotel. 10. Based upon the above authorities, the learn ..... X X X X Extracts X X X X X X X X Extracts X X X X
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