M/s. Intergarden (India) Pvt. Ltd., Bangalore V. ACIT, Bangalore

ITA 1292/BANG/2010

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8566 (ITAT-BANGALORE)
• Duration Of Justice: 5 year(s) 3 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 18-02-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 23-11-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: SURESH BALANI
• Keywords: Search and seizure; Additional evidence; Bad and doubtful debts; Competent authority
• Section: 10AA; 80HHC; 10B

Judgement Text

ITA.1292/BANG/2010; IT(TP)A.887,963/BANG/2013 PAGE - 1 IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH 'B', BANGALORE BEFORE SHRI. ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI. VIJAY PAL RAO, JUDICIAL MEMBER I.T.A NO.1292/BANG/2010 (ASSESSMENT YEAR : 2006-07) I.T.A NO.287/BANG/2013 (ASSESSMENT YEAR : 2007-08) M/S. INTERGARDEN (INDIA) P. LTD, NO.68, OBALAPURA VILLAGE, ANNGONDANAHALLI HOBLI, HOSKOTE TALUK, BANGALORE 560 067 .. APPELLANT PAN : AAACI7962H V. ASST. COMMISSIONER OF INCOME-TAX, CIRCLE -11(4), BANGALORE .. RESPONDENT I.T.A NO.968/BANG/2013 (ASSESSMENT YEAR : 2007-08) (BY THE REVENUE) ASSESSEE BY : SHRI. PRAKASH CHAND YADAV, ADVOCATE & SHRI. SURESH BALANI, CA REVENUE BY : MS. NEERA MALHOTRA, CIT-DR & SHRI. MA NOJ KUMAR, ADD. CIT HEARD ON : 18.02.2016 PRONOUNCED ON : 18.03.2016 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : FIRST OF THESE IS AN APPEAL FILED BY THE ASSESSEE D IRECTED AGAINST AN ORDER DT.20.09.2010 OF THE ASSESSING OFFICER FOR A. Y. 2006-07, PASSED IN ITA.1292/BANG/2010; IT(TP)A.887,963/BANG/2013 PAGE - 2 PURSUANCE TO DIRECTIONS OF DRP U/S.144C OF THE INCO ME-TAX ACT, 1961 ('THE ACT' IN SHORT) WHEREAS THE OTHER TWO ARE CROSS APP EALS FILED BY THE ASSESSEE AND REVENUE RESPECTIVELY DIRECTED AGAINST ORDER DT. 22.03.2013 OF CIT (A) - I, BANGALORE, FOR A. Y. 2007-08. 2. APPEAL FOR A. Y. 2006-07 IS TAKEN UP FIRST FOR DISP OSAL. ASSESSEE HAS ALTOGETHER TAKEN TEN GROUNDS OF WHICH, GROUNDS ONE AND TEN ARE GENERAL AND GROUND NINE WHICH IS ON LEVY OF INTEREST U/S.234B O F THE ACT, IS CONSEQUENTIAL. 3. VIDE ITS GROUND 2 TO 5 AND 7, ASSESSEE IS AGGRIEVED ON THE REDUCTION OF INSURANCE CHARGES AND FREIGHT CHARGES AGGREGATIN G TO RS.10,56,29,513/- FROM EXPORT TURNOVER WHILE COMPUTING THE DEDUCTION U/S.10B OF THE ACT. ALTERNATIVELY ASSESSEE PLEADS THAT SUCH AMOUNT SHOU LD ALSO BE EXCLUDED FROM TOTAL TURNOVER WHILE COMPUTING SUCH DEDUCTION. 4. IN SO FAR AS ASSESSEE'S CLAIM FOR NOT REDUCING INSU RANCE AND FREIGHT CHARGES FROM THE EXPORT TURNOVER IS CONCERNED, WE A RE AFRAID WE CANNOT ACCEPT IT IN VIEW OF THE DEFINITION GIVEN TO EXPORT TURNOVER IN EXPLANATION 2(III) TO SECTION 10B OF THE ACT, WHICH GIVE ROOM F OR NO DOUBT. AO IS OBLIGED TO DEDUCT SUCH AMOUNT FROM THE EXPORT TURNO VER WHILE COMPUTING THE DEDUCTION UNDER THE SAID SECTION. HOWEVER THE ALTERNATIVE CLAIM OF THE ITA.1292/BANG/2010; IT(TP)A.887,963/BANG/2013 PAGE - 3 ASSESSEE THAT SUCH AMOUNTS WHICH ARE DEDUCTED FROM THE EXPORT TURNOVER WAS REQUIRED TO BE DEDUCTED FROM THE TOTAL TURNOVER ALSO, HAS TO BE ACCEPTED IN VIEW OF THE HON'BLE JURISDICTIONAL HIGH COURT DE CISION IN CIT V. TATA ELXSI (349 ITR 98). ACCORDINGLY, WE DIRECT THE AO TO REDUCE THESE AMOUNTS FROM THE TOTAL TURNOVER ALSO WHILE COMPUTIN G THE DEDUCTION U/S.10B OF THE ACT. 5. VIDE ITS GROUND 6, ASSESSEE IS AGGRIEVED ON DISALLO WANCE OF A PORTION OF INTEREST ON BORROWINGS MADE BY IT FROM ITS AE. ASSESSEE HAD EXTERNAL COMMERCIAL BOROWINGS (ECB) OF RS.8,13,19,000/- FROM ITS AE ABROAD. TPO WAS OF THE OPINION THAT THE INTEREST PAID BY TH E ASSESSEE ON SUCH LOANS CAME TO 5% AND THIS WAS EXCESSIVE. AS PER THE TPO, ON APPLYING CUP METHOD ON ECB LOANS, INTEREST RATE WOULD BE 3.87% O NLY. FOR THE DIFFERENCE OF 1.13%, HE RECOMMENDED AN ADJUSTMENT O F RS.2,99,908/-. BEFORE THE DRP, ASSESSEE ARGUED THAT EFFECTIVE RATE OF INTEREST PAID BY ASSESSEE ON LOANS TAKEN BY IT IN INDIA WAS 6.62%, WHICH ITSELF WAS BELOW THE AVERAGE PLR OF 10.89%. AS PER THE ASSESSEE, RA TE OF INTEREST PAID ON THE LOANS TAKEN FROM THE AE WAS ONLY 5%. THUS ACCOR DING TO IT, IF INTERNAL CUP WAS APPLIED, THERE WAS NO NECESSITY FOR ANY ADJ USTMENT. HOWEVER, THE DRP REFUSED TO INTERFERE WITH THE RECOMMENDATIONS O F THE TPO. ITA.1292/BANG/2010; IT(TP)A.887,963/BANG/2013 PAGE - 4 6. NOW BEFORE US, LD. AR STRONGLY SUBMITTED THAT THERE WAS NO DISPUTE REGARDING COMMERCIAL CUP RATE OF 6.62%. ACCORDING TO HIM, WHEN INTERNAL CUP METHOD WAS AVAILABLE, THERE WAS NO NEED TO APPL Y EXTERNAL CUP METHOD 7. LD. DR STRONGLY SUPPORTED THE ORDERS OF LOWER AUTHO RITIES. 8. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL CONT ENTIONS. REVENUE HAS NOT DISPUTED THE SUBMISSION MADE BY THE ASSESSEE BEFORE THE CIT (A) THAT EFFECTIVE RATE OF INTEREST PAID BY IT IN INDIA WAS 6.62% ON LOANS. INTEREST PAID BY ASSESSEE ON LOANS TAKEN FR OM AE ABROAD WAS 5%. THIS WAS BELOW THE RATE OF INTEREST ASSESSEE WAS PA YING ON LOANS TAKEN WITHIN INDIA. WHEN INTERNAL CUP WITH UNRELATED PAR TIES IS AVAILABLE, IN OUR OPINION, IT SHOULD BE GIVEN PRECEDENCE OVER EXTERNA L CUP. WE ARE OF THE OPINION THAT NO ADJUSTMENT OUGHT TO HAVE BEEN DONE ON THE INTEREST PAID BY THE ASSESSEE TO THE AE ABROAD. ADDITION OF RS.2,99 ,908/- STANDS DELETED. GROUND 5 OF THE ASSESSEE IS ALLOWED. 9. NOW WE TAKE UP CROSS APPEALS OF THE ASSESSEE AND RE VENUE RESPECTIVELY FOR A. Y. 2007-08, IN THE SAME SEQUENC E. 10. GROUND 1 OF THE ASSESSEE IS GENERAL IN NATURE AND I TS GROUND.11 WHICH IS ON LEVY OF INTEREST U/S.234B OF THE ACT, IS CONS EQUENTIAL IN NATURE. VIDE ITA.1292/BANG/2010; IT(TP)A.887,963/BANG/2013 PAGE - 5 ITS GROUNDS 2, 3 AND 4, ASSESSEE IS AGGRIEVED ON TH E DENIAL OF EXEMPTION U/S.10B OF THE ACT. 11. FACTS APROPOS ARE THAT ASSESSEE HAD FILED ITS RETUR N FOR IMPUGNED ASSESSMENT YEAR DECLARING INCOME OF RS.1,38,04,710/ - AFTER CLAIMING DEDUCTION U/S.10B OF THE ACT, OF RS.7,18,79,252/-. ASSESSEE CLAIMED SUCH DEDUCTION CONSIDERING IT TO BE MANUFACTURER AND PRO DUCER OF GHERKINS PICKLES. THERE WAS A SURVEY DONE BY THE INCOME-TAX AUTHORITIES IN THE PREMISES OF THE ASSESSEE ON 27.09.2010. BASED ON T HE INPUTS RECEIVED FROM THE SURVEY, AO PUT THE ASSESSEE ON NOTICE AS TO HOW IT COULD BE CONSIDERED AS DOING ANY MANUFACTURING. ACCORDING TO THE AO, A SSESSEE WAS ONLY INTO PROCESSING OF THE GHERKINS OBTAINED FROM THE FARMER S THROUGH CONTRACT FARMING. AS PER THE AO, ASSESSEE WAS HAVING A PAC KING UNIT, WHERE GHERKINS OBTAINED FROM FARMERS WERE WASHED AND PUT INTO JARS OF VARIOUS SIZES WITH SOME PRESERVATIVES AND SOME SPICES. AO NOTED THAT THE JARS WERE STEAM HEATED FOR 20 MINUTES AND LABELED WITH PRINTS , DEPENDING ON THE COUNTRY OF EXPORT. AS PER THE AO SUCH EXERCISES CO ULD NOT BE CONSIDERED AS MANUFACTURE OR PRODUCTION FOR ALLOWING A CLAIM OF D EDUCTION U/S.10B OF THE ACT. ITA.1292/BANG/2010; IT(TP)A.887,963/BANG/2013 PAGE - 6 12. REPLY OF THE ASSESSEE WAS THAT THE ORIGINAL COMMOD ITY IN THE NATURE OF RAW GHERKINS WAS SUBJECT TO SEVERAL STAGES OF PR OCESSING RESULTING IN A DIFFERENT COMMODITY. RELYING ON THE JUDGMENT OF HO N'BLE APEX COURT IN CHILLIES EXPORT HOUSE V. CIT [225 ITR 814], ASSESSE E SUBMITTED THAT TREATMENT WITH CHEMICALS WHICH RESULTED IN GOODS BE COMING A MARKETABLE COMMODITY WOULD AMOUNT TO PROCESSING OF GOODS. AS PER THE ASSESSEE, IT FELL WITHIN THE MEANING OF THE TERM MANUFACTURE AS DEFINED IN FOREIGN TRADE POLICY ('FTP' IN SHORT). RELYING ON THE JUDG MENT OF HON'BLE KERALA HIGH COURT IN TATA TEA LTD V. ACIT [(2011) 338 ITR 0285], ASSESSEE STATED THAT THE DEFINITION OF THE TERM 'MANUFACTURE' AS C ONTAINED IN EXPORT IMPORT POLICY WOULD HAVE TO BE APPLIED, WHEN CONSTRUING SE CTION 10A AND 10B OF THE ACT. ASSESSEE ALSO SUBMITTED THAT IT WAS GRADI NG THE GHERKINS AND PICKLING IT IN JARS WITH DIFFERENT FLAVOURS. 13. AO WAS HOWEVER NOT CONVINCED OR SATISFIED WITH THE ABOVE REPLY. ACCORDING TO HIM IN THE CASE OF CHILLIES EXPORT HOU SE (SUPRA) RELIED ON BY THE ASSESSEE, THE MATTER WAS REMITTED BACK TO THE A O FOR BETTER INVESTIGATION ON THE PROCESS INVOLVED THEREIN. RELYING ON THE JU DGMENT OF HON'BLE APEX COURT IN THE CASE OF CIT V. TARA AGENCIES (292 ITR 444), AO HELD THAT PROCESSING COULD NOT BE CONSIDERED AS MANUFACTURING ACTIVITY. AS PER THE ITA.1292/BANG/2010; IT(TP)A.887,963/BANG/2013 PAGE - 7 AO, WHEN THE LEGISLATURE HAD DISTINGUISHED BETWEEN MANUFACTURE AND PROCESSING, THEN BOTH ACTIVITIES COULD NOT BE CONSI DERED AS THE SAME. AO HELD THAT DEDUCTION U/S.10A OR 10B OF THE ACT COUL D BE GIVEN ONLY TO A MANUFACTURE OR PRODUCTION AND NOT FOR PROCESSING. FURTHER ACCORDING TO HIM, DIRECTOR OF THE ASSESSEE COMPANY IN A STATEMEN T RECORDED AT THE TIME OF SURVEY HAD STATED THAT ASSESSEE WAS ENGAGED IN SELL ING GHERKINS BOUGHT FROM FARMERS THROUGH CONTRACT FARMING. EVEN THE CR OP WAS NOT GROWN ON ASSESSEE'S LAND. AO ALSO PLACED RELIANCE ON HON'BL E APEX COURT DECISION IN THE CASE OF DY.COMMISSIONER OF SALES TAX V. PIO FOO D PACKERS [(1980) AIR 1228 (SC)] WHEREIN IT WAS HELD THAT SLICING AND PAC KING OF PINEAPPLE DID NOT CHANGE THE COMPLEXION OF ORIGINAL PINEAPPLE AND NO NEW COMMODITY CAME INTO EXISTENCE. THUS HE HELD THAT ASSESSEE WA S NOT ELIGIBLE FOR THE CLAIM OF DEDUCTION U/S.10B OF THE ACT. 14. AGGRIEVED ASSESSEE MOVED IN APPEAL BEFORE THE CIT ( A). AS PER THE ASSESSEE, IT WAS EXPORTING GOODS WHICH WERE SUBJECT TO EXCISE LEVY. IT WAS NOT PAYING EXCISE DUTY ONLY DUE TO ITS STATUS AS AN EOU. SUBMISSION OF THE ASSESSEE WAS THAT GHERKIN PICKLES WERE ENTIRELY DIF FERENT FROM RAW GHERKINS. ASSESSEE ALSO PLACED DETAILED SUBMISSION AS TO WHAT IT CLAIMED WAS MANUFACTURING PROCESS, WAS BEING CARRIED OUT. FURT HER AS PER THE ASSESSEE, ITA.1292/BANG/2010; IT(TP)A.887,963/BANG/2013 PAGE - 8 JUDGMENT OF HON'BLE APEX COURT IN THE CASE OF TARA AGENCIES (SUPRA) WAS RENDERED IN RELATION TO THE CONTEXT OF WEIGHTED DED UCTION CLAIMED U/S.35B OF THE ACT AND NOT RELEVANT TO CLAIM OF DEDUCTION C LAIMED U/S.10B OF THE ACT. ASSESSEE ALSO SUBMITTED BEFORE THE CIT (A) A FLOW-CHART OF THE VARIOUS STEPS INVOLVED IN THE PREPARATION OF ITS PR ODUCT. AS PER THE ASSESSEE, SUCH PROCESS INCLUDED A STEP CALLED FERME NTATION WHICH INCREASED THE SHELF LIFE OF THE PRODUCT CONSIDERABLY. SUBMIS SION OF THE ASSESSSEE WAS THAT GHERKINS PICKLE WHICH IT WAS EXPORTING WAS A N EW PRODUCT DIFFERENT FROM RAW GHERKINS SOURCED FROM THE CONTRACT FARMERS . RELIANCE WAS ONCE AGAIN PLACED ON THE HON'BLE KERALA HIGH COURT IN TH E CASE OF TATA TEA LTD, (SUPRA). 15. CIT (A) AFTER CONSIDERING THE SUBMISSIONS OF THE AS SESSEE WAS OF THE OPINION THAT ASSESSEE WAS APPROVED AS A 100% EOU AS PER LETTER DT.29.05.2001 WITH REFERENCE NUMBER 16/13/2001; PER EOU:KA:CSEZ;4174. AS PER THE CIT (A), THIS LETTER BY THE DEPUTY DEVELOPMENT COMMISSIONER OF COCHIN SEZ, DID NOT PER SE MAKE THE ASSESSEE ELIGIBLE FOR AVAILING DEDUCTION U/S.10B OF THE ACT. AS PER THE CIT (A), RATIFICATION BY THE BOARD FOR EOU SCHEME, IN T HEIR MEETING DT.14.01.2011 WOULD ALSO NOT HELP THE ASSESSEE. L D. CIT (A) WAS OF THE ITA.1292/BANG/2010; IT(TP)A.887,963/BANG/2013 PAGE - 9 OPINION THAT ASSESSEE COULD NOT PRODUCE ANY DOCUME NT OR NOTIFICATION TO SHOW THAT DEPUTY DIRECTOR OF COCHIN SEZ, WAS ENTITL ED TO NOTIFY A PERSON AS 100% EOU, U/S.14 OF INDUSTRIES (DEVELOPMENT AND REGULATIONS) ACT, 1951(IN SHORT IDRA 1951). 16. FURTHER ACCORDING TO THE CIT (A), ASSESSEE ALSO COU LD NOT SHOW THAT IT WAS ENGAGED IN ANY MANUFACTURE OR PRODUCTION. AFTE R GOING THROUGH THE VARIOUS STEPS CARRIED OUT BY THE ASSESSEE IN ITS U NIT, CIT(A) WAS OF THE OPINION THAT ASSESSEE WAS NOT ENGAGED IN ANY PROCES SING OR MANUFACTURING. AS PER THE CIT (A), ASSESSEE DID NOT TREAT THE RAW GHERKINS WITH ANY CHEMICALS, FOR ANY CHANGE TO HAVE HAPPENED. CIT (A ) CONFIRMED THE FINDING OF THE AO THAT ASSESSEE WAS ONLY PACKING TH E GHERKINS. THUS HE UPHELD THE ORDER OF THE AO DENYING THE DEDUCTION CL AIMED U/S.10B OF THE ACT. 17. NOW BEFORE US, LD. AR STRONGLY ASSAILING THE ORDERS OF LOWER AUTHORITIES SUBMITTED THAT LETTER DT.29.05.2001 OF DEVELOPMENT COMMISSION OF COCHIN SEZ (PLACED AT PAPER BOOK PAGES 271 AND 2 72) HAD NOT ONLY CONSIDERED ASSESSEE TO BE A MANUFACTURER BUT ALSO G AVE IT PERMISSION TO WORK IN THE SEZ AS A 100% EXPORT ORIENTED MANUFACT URER OF GHERKINS. LD. AR SUBMITTED THAT BOARD OF APPROVAL OF EOU SCHEME F ALLING UNDER ITA.1292/BANG/2010; IT(TP)A.887,963/BANG/2013 PAGE - 10 MINISTRY OF COMMERCE, GOVERNMENT OF INDIA VIDE LETT ER DT.18.01.2011, PLACED AT PAPER BOOK PAGE 275, HAD APPROVED VARIOUS EOU SCHEMES INCLUDING THAT OF THE ASSESSEE. AS PER LD. AR, NAM E OF THE ASSESSEE APPEARED AT PAPER BOOK PAGE 281. THUS ACCORDING TO HIM, ASSESSEE HAD FULFILLED THE CONDITIONS SET OUT IN EXPLANATION 2(I V) TO SECTION 10B OF THE ACT. 18. COMING TO THE ASPECT OF ELIGIBILITY OF THE ASSESSEE AS A MANUFACTURER OR PRODUCER, LD. AR SUBMITTED THAT THE FLOW-CHART O F THE VARIOUS STEPS UNDERTAKEN BY THE ASSESSEE IN THE PRODUCTION OF GHE RKINS PICKLES WERE SUBMITTED BEFORE THE AO BUT WAS NOT PROPERLY CONSID ERED. ACCORDING TO HIM, AO SIMPLY WENT BY A STATEMENT RECORDED FROM TH E DIRECTOR OF THE ASSESSEE COMPANY DURING THE COURSE OF SURVEY WHICH DID NOT HAVE ANY EVIDENTIARY VALUE. AS PER THE LD. AR, ONE OF THE S TEPS INVOLVED WAS FERMENTATION, WHICH CLEARLY BROUGHT OUT A CHANGE IN THE STATE OF GHERKINS. RAW GHERKINS DUE TO THIS PROCESS, BECAME SOMETHING WHICH HAD A LONG STORAGE. RELYING ON THE JUDGMENT OF HON'BLE KERALA HIGH COURT IN THE CASE OF TATA TEA LTD (SUPRA), LD. AR SUBMITTED THAT THE TERM 'MANUFACTURE' IN RELATION SECTION 10A, 10AA AND 10B OF THE ACT, HAD TO BE CONSTRUED WITH REFERENCE TO THE DEFINITION OF SUCH TERM AS GIVEN I N EXPORT / INPORT POLICY. ITA.1292/BANG/2010; IT(TP)A.887,963/BANG/2013 PAGE - 11 SUCH DEFINITION TOOK INTO ITS FOLD ANY TYPE OF PROC ESS WHICH BROUGHT INTO EXISTENCE A NEW PRODUCT. ACCORDING TO HIM IN THE C ASE OF TARA AGENCIES (SUPRA) OF HON'BLE APEX COURT RELIED ON BY THE AO RELATED TO BLENDING OF TEA. AS PER THE LD. AR, BLENDING OF TEA WAS AN ALT OGETHER DIFFERENT PROCESS, WHEN COMPARED TO WHAT ASSESSEE WAS DOING HERE. LD. AR ALSO POINTED OUT THAT FOR THE EARLIER YEARS ASSESSEE WAS GRANTED SUC H DEDUCTION U/S.10B OF THE ACT AND REVENUE HAD TAKEN A DIFFERENT VIEW FOR ONLY ONE YEAR WITHOUT ANY SPECIFIC CHANGE IN CIRCUMSTANCES. THUS ACCORDING T O HIM ASSESSEE WAS ELIGIBLE FOR DEDUCTION U/S.10B OF THE ACT. 19. PER CONTRA, LD. DR SUBMITTED THAT GHERKINS AS BOTTL ED BY THE ASSESSEE WAS NOT A PICKLE. IT WAS RAW GHERKINS PACKED IN T INS AND BOTTLES. AS PER THE LD. AR THERE WAS NO CHANGE IN THE COMPLEXION OF THE RAW GHERKINS THROUGH VARIOUS PROCESSES DONE BY THE ASSESSEE. ON THE ASPECT OF CONSISTENCY, LD. DR SUBMITTED THAT DURING THE RELEV ANT PREVIOUS YEAR, THERE WAS A SURVEY IN WHICH ONE OF THE DIRECTORS O F THE ASSESSEE HAD STATED THAT IT WAS NOT ENGAGED IN ANY MANUFACTURE AND THER EFORE THE AO WAS JUSTIFIED IN CONSIDERING THE CLAIM OF THE ASSESSEE AFRESH. LD. DR ALSO RELIED ON SECTION 10B OF THE ACT AS IT STOOD PRIOR TO 01.0 4.2001. ACCORDING TO HER, PRIOR TO 01.04.2001, DEFINITION OF THE TERM 'MANUFA CTURE' INCLUDED PROCESS, ITA.1292/BANG/2010; IT(TP)A.887,963/BANG/2013 PAGE - 12 ASSEMBLING OR RECORDING OF PROGRAMMES ON DESKTOPS. BY VIRTUE OF THE SUBSTITUTION OF SECTION 10B OF THE ACT THROUGH FINA NCE ACT, 2000, W.E.F. 01.04.2001, THE TERM 'PROCESS' WAS TAKEN OUT OF THE SAID SECTION. IN OTHER WORDS ACCORDING TO HER, EVEN IF WE CONSIDER THAT AS SESSEE WAS DOING SOME PROCESSING, IT CANNOT BE CONSIDERED AS A MANUFACTUR ER OR PRODUCER ELIGIBLE FOR DEDUCTION U/S.10B OF THE ACT. GHERKINS PREPAR ED BY THE ASSESSEE WAS NOT EVEN SLICED. ACCORDING TO HER, ASSESSEE WAS ON LY ADDING CERTAIN MATERIAL FOR PRESERVING THE GHERKINS. IN HER VIEW, EVEN IF THERE WAS SOME PROCESS IT COULD NOT BE CONSIDERED AS PRODUCTION. 20. AD LIBITUM REPLY OF THE LD. AR WAS THAT JUDGMENT OF HON'BLE KERALA HIGH COURT IN TATA TEA LTD (SUPRA) TOOK INTO ACCOUN T THE EFFECT OF SUBSTITUTION OF SECTION 10B WITH FINANCE ACT, 2000 W.E.F.01.04. 2001. AS PER THE LD. AR, HON'BLE KERALA HIGH COURT AFTER CON SIDERING THE EFFECT OF SUCH SUBSTITUTION, HELD THAT THE TERM MANUFACTURE AS IT APPEARED IN SECTION 10B OF THE ACT WOULD HAVE TO BE GIVEN THE M EANING AS PER FTP. 21. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL CONT ENTIONS. WHAT ASSESSEE WAS DOING IN ITS PREMISES, HAS BEEN REPROD UCED BY THE CIT (A) IN HIS ORDER. THIS IS REPRODUCED HEREUNDER ONCE AGAIN FOR BREVITY : ITA.1292/BANG/2010; IT(TP)A.887,963/BANG/2013 PAGE - 13 'MANUFACTURING PROCESS 1) THE MANUFACTURING SYSTEM FROM RAW GHERKIN TO GHERKIN PICKLE IS CONTINUES AND REGULAR ACTION I.E. SUCCESSIONS OF ACTION CARRIED ON IN A DEFINITE MANNER TO LEAD IN ACCOMPLISHING THE DESIRED RESULTS AS ILLUSTRATED IN THE GRAPHICAL CHART. FROM A QUICK LOOK TO THE GRAPHICAL CHART (ANNEXURE 5), NECESSARY ACTIVITIES MAY BE BRACKETED WITHIN THE AMBIT OF 'MANUFACTURE' AS INDICATED HEREINAFTER:- (B) GHERKINS ARE STORED IN COLD STORAGES AT PARTICULAR TEMPERATURE. (C) THEREAFTER, DEFECTS ARE REMOVED FROM TO GET THE ASS URED QUALITY OF RAW MATERIAL. THIS PROCESS IS KNOWN AS P RE CULLING (D) GHERKINS ARE SUBJECTED TO THE PROCESS OF MANUAL CUL LING. (E) SELECTED VARIETIES AFTER GRADING ARE TAKEN THROUGH A PROCESS OF WASHING BY THE MACHINE. (F) THEREAFTER THE PROCESS OF FINE GRADING IS UNDERTAKEN. (G) THE GHERKINS ARE THEN PASSED ONTO FILLING TABLES FO R FILLING FOR FILLING INTO JARS OR ANY SUITABLE PRIMARY PACKAGING MATERIAL. (H) THE COVER LIQUID SOLUTION USED FOR LONGEVITY OF THE GHERKINS (OR INCREASING THE ACID CONTENT IN THEM) I S THEN MANUFACTURED IN A COVER LIQUID TANK BY MIXING APPROPRIATE PROPORTIONS OF DECLARED INGREDIENTS AS PER THE CUSTOMER'S REQUIREMENT OR COUNTRY OF DESTINATION. (I) THE COVER LIQUID PERMEATES THE MEMBRANE OF THE PICKLED GHERKINS/ CUCUMBERS/ JALAPEO'S THROUGH A BIOLOGICAL PROCESS OF OSMOSIS- WHICH IS VERY DIFFER ENT FROM A LATERAL APPLICATION OF WAX. IN OTHER WORDS R EAL ITA.1292/BANG/2010; IT(TP)A.887,963/BANG/2013 PAGE - 14 TRANSFORMATION OF TASTE (HENCE VALUE) TO GHERKINS HAPPENS NOT JUST BECAUSE OF ITS SIZE OR THE WAY IT IS CUT, BUT THE MEDIA IN WHICH IT IS PRESERVED AND IT IS DI FFERENT FROM APPLICATION OF WAX SAY FOR POLISHING AN APPLE IN A RETAIL MART WHICH DOES NOT CHANGE IT PROPERTIES. (J) THE COVER LIQUID IS THEN FILLED INTO THE JARS WITH GHERKINS AND IS PASSED THROUGH THERMAL PROCESSING EQUIPMENT LIKE PASTEURIZER FOR COOKING / TO ACHIEVE LETHALITY IN KILLING UNDESIRABLE PATHOGENS THAT ARE HARMFUL TO HUMAN KIN D. (K) THE PRODUCT IS THEN PASSED THROUGH A COOLING PROCESS IN THE SAME MANUFACTURING LINE TO ENSURE CRISPINESS OF THE PRODUCT AND TO AVOID VACUUM LOSS FOR SHELF STABILITY. (L) EVERY RETAIL UNIT PACKED AT SPECIFIC TIME IS TH EN ASSIGNED WITH A UNIQUE TIME SLOT COMPRISING OF A MANUFACTURING CODE AND BEST BEFORE DATE FOR CONSUMP TION. (M) THE FINISHED PRODUCT IS THEN ALLOWED FOR EQUALIZATION I.E FERMENTATION WHICH TAKES 24 TO 48 HOURS RESULTING IN AN EQUALIZED PH OF LESS THAN 4.6 TO BE CATEGORIZED UNDER ACIDIFIED PICKLE CATEGORY.(SUCH PH FACTOR WAS 5.4-5.9 AT THE INITIAL STEP WAS REDUCED TO PH FACTOR OF LESS THAN 4.6) AS EXPLAINED IN ANNEXURE 6. (N) THE PRODUCT WITH THE PH AT < 4.6 AND WITH A MAX. % SALT OF 4.0 (FOR ANY GIVEN TYPE OF PRODUCT) IS THEN STAB LE ON SHELF AS PER THE DECLARED SHELF LIFE. IN OTHER WORD S (O) THE PRODUCT IS THEN EVALUATED BY QUALITY ASSURANCE FOR ADHERENCE TO CGMPS (CURRENT GOOD MANUFACTURING PRACTICES) AND QUALITY PARAMETERS AS PRESCRIBED BY THE DESTINATION COUNTRIES SUCH AS USF DA IN USA. ITA.1292/BANG/2010; IT(TP)A.887,963/BANG/2013 PAGE - 15 22. ASSESSEE HAS PLACED A PROCESS FLOW CHART AT PAPER B OOK PAGE 303. ONE STEP WE SPECIFICALLY NOTE IN THE FLOW-CHART IS THE FERMENTATION PROCESS. ARGUMENT OF THE AO IS THAT FERMENTING ONLY EXTENDED THE SHELF-LIFE OF THE GHERKINS AND HAD NO OTHER EFFECT WHAT SO EVER. IN ANY CASE THERE IS AN ADMISSION BY REVENUE THAT GHERKINS PICKLED BY THE A SSESSEE HAD MUCH HIGHER SHELF LIFE THAN WHAT RAW GHERKINS WOULD HAVE HAD. AS A RAW VEGETABLE, GHERKINS WOULD NOT LAST MORE THAN A WEEK . ONCE SUCH RAW GHERKINS ARE PUT INTO SOME PROCESS WHICH INCREASES ITS SHELF LIFE TO SIX MONTHS OR MORE, THERE INDEED HAPPEN SOME IRREVERSIB LE CHANGE. RAW GHERKINS ARE CHANGED FROM ITS ORIGINAL STATE TO A S TATE WHERE IT REMAINS GOOD FOR HUMAN CONSUMPTION EVEN AFTER SIX MONTHS. THUS THE STEPS AS UNDERTAKEN BY THE ASSESSEE WHICH INCLUDED FERMENTAT ION AND WHICH EXTENDED THE SHELF LIFE OF RAW GHERKINS, EVEN IF WE CONSTRUE AS NOT MANUFACTURE, AS COMMONLY UNDERSTOOD, IT CANNOT BE DENIED THAT IT RESULTED IN A PRODUCT WHICH CANNOT BE EQUATED WITH RAW GHERK INS. THE PROCESSES UNDERTAKEN BY THE ASSESSEE HAD SIGNIFICANT EFFECT O N THE RAW NATURE, CONVERTING IT TO A MATERIAL CAPABLE OF WITHSTANDING DECAY FOR A CONSIDERABLE PERIOD OF TIME. IN OUR OPINION, IN SUCH A SITUAT ION, IT IS DIFFICULT TO SAY THAT WHAT WAS PACKED BY THE ASSESSEE AFTER THE VARIOUS P ROCESS WAS VERY SAME AS THE RAW GHERKINS WHICH IT GOT FROM ITS CONTRACT FAR MERS. ITA.1292/BANG/2010; IT(TP)A.887,963/BANG/2013 PAGE - 16 23. ONE ANOTHER ARGUMENT TAKEN BY THE LD. DR IS THAT EV EN IF ASSESSEE WAS DOING SOME SORT OF PROCESSING, STILL IT WOULD N OT BE ELIGIBLE FOR CLAIM OF DEDUCTION U/S.10B OF THE ACT. IN OUR OPINION THE EFFECT OF SUBSTITUTION OF SECTION 10B BY VIRTUE OF FINANCE ACT 2000, WAS AN I SSUE WHICH CAME UP BEFORE HON'BLE KERALA HIGH COURT IN THE CASE OF TA TA TEA LTD (SUPRA). QUESTION THERE WAS WHETHER ASSESSEE WHO WAS BLENDIN G TEA COULD BE CONSIDERED AS ELIGIBLE FOR EXEMPTION U/S.10B OF THE ACT. THERE ALSO THE DEPARTMENT HAD PLACED RELIANCE ON THE HON'BLE APEX COURT JUDGMENT IN THE CASE OF TARA AGENCIES (SUPRA). PARAGRAPHS 2 AND 3 OF THIS JUDGMENT IS REPRODUCED HEREUNDER : 2. APPELLANT-ASSESSEE HAS A DIVISION EXCLUSIVELY EN GAGED IN BLENDING, PACKING AND EXPORT OF TEA BAGS, TEA PACKE TS AND BULK TEA-PACKS. THIS DIVISION ENJOYS RECOGNITION AS A 10 0 PER CENT EXPORT ORIENTED UNIT WHICH IS GRANTED BY THE DEVELO PMENT COMMISSIONER, MINISTRY OF COMMERCE AND INDUSTRY, GO VERNMENT OF INDIA. INCOME-TAX EXEMPTION UNDER SECTION 10B OF THE ACT CLAIMED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 199 6-97 ONWARDS WAS GRANTED UP TO THE ASSESSMENT YEAR 2000- 01. HOWEVER, FOR THE ASSESSMENT YEARS 2001-02 AND 2002- 03 TO WHICH THESE APPEALS RELATE, EXEMPTION WAS DECLINED FOR THE REASON THAT BY THE FINANCE ACT, 2000 THE DEFINITION OF 'MANUFACTURE' WHICH INCLUDED 'PROCESSING' CONTAINED IN SECTION 10B WAS DELETED WITH EFFECT FROM 1-4-2001. THE DEPA RTMENTS STAND IS THAT MANUFACTURE OR PRODUCTION HAD A LIBER AL MEANING UNDER THE DEFINITION CLAUSE CONTAINED IN SECTION 10 B UNTIL ITS DELETION WITH EFFECT FROM THE ASSESSMENT YEAR 2001- 02 WHICH COVERED EVEN PROCESSING AND THEREFORE, BLENDING AND PACKING OF TEA FOR EXPORT WAS TREATED AS MANUFACTURE OR PRODUC TION OF AN ITA.1292/BANG/2010; IT(TP)A.887,963/BANG/2013 PAGE - 17 ARTICLE QUALIFYING FOR EXEMPTION. HOWEVER, ONCE THE DEFINITION CLAUSE IS DELETED, 'PROCESSING' DOES NOT QUALIFY FO R EXEMPTION FROM THE ASSESSMENT YEAR 2001-02 ONWARDS AND SO MUC H SO, ASSESSEES ACTIVITY BEING ONLY PROCESSING NOT AMOUN TING TO MANUFACTURE OR PRODUCTION, IS NOT ENTITLED TO EXEMP TION UNDER SECTION 10B. HOWEVER, SENIOR COUNSEL APPEARING FOR THE ASSESSEE HAS RELIED ON RECENT DIVISION BENCH JUDGMENT OF THI S COURT IN GIRNAR INDUSTRIES V. CIT [2010] 187 TAXMAN 136 DECLARING ELIGIBILITY FOR EXEMPTION FROM PAYMENT OF TAX IN RE SPECT OF THE INCOME FROM SAME ACTIVITY CARRIED ON BY A UNIT IN T HE SPECIAL ECONOMIC ZONE AT KAKKANAD FOR THE ASSESSMENT YEAR 2 004-05. THE CONTENTION OF COUNSEL FOR THE ASSESSEE IS THAT SCHEME OF INCOME-TAX EXEMPTION AVAILABLE TO UNITS IN THE SPEC IAL ECONOMIC ZONE UNDER SECTION 10A AND UNITS IN THE FREE TRADE ZONE PROVIDED UNDER SECTION 10AA AND THE EXEMPTION AVAIL ABLE TO 100 PER CENT EXPORT ORIENTED UNITS UNDER SECTION 10B AR E VERY SIMILAR IN NATURE AND THE WORDINGS OF THE STATUTORY PROVISIONS ARE SIMILAR IN NATURE AND SO MUCH SO, GOING BY THE EARL IER DIVISION BENCH JUDGMENT OF THIS COURT ASSESSEE IS ENTITLED T O EXEMPTION UNDER SECTION 10B IN RESPECT OF THE PROFIT DERIVED BY IT FROM THE 100 PER CENT EXPORT ORIENTED UNIT. SENIOR COUNSEL F OR THE ASSESSEE ALSO STATED THAT THE ASSESSEES CASE ON FA CTS IS BETTER BECAUSE ASSESSEE IS NOT ONLY ENGAGED IN PACKING OF BLENDED TEA IN RETAIL AND WHOLESALE PACKS, BUT IS ALSO MAKING A PR ODUCT CALLED 'TEA BAG' WHICH IS A PRODUCT IN ITSELF BECAUSE IT I S NOT JUST PACKING OF BLENDED TEA IN PACKETS. ON GOING THROUGH THE PROVISIONS OF SECTIONS 10A, 10AA AND 10B, WE FEEL T HE SCHEME OF EXEMPTION IS VERY SIMILAR IN NATURE AND THE WORDING S USED IN ALL THE SECTIONS ARE SIMILAR IN NATURE. SO MUCH SO, OUR DECISION ABOVE REFERRED SHOULD APPLY TO THIS CASE AS WELL. H OWEVER, WE NOTICE FROM OUR JUDGMENT THAT THERE WAS AN OMISSION BY THIS COURT TO CONSIDER IN THAT JUDGMENT THE DECISION OF THE SUPREME COURT IN CIT V. TARA AGENCIES [2007] 292 ITR 444 RELIED ON BY THE SENIOR STANDING COUNSEL FOR THE REVENUE WHEREIN THE SUPREME COURT HAS CLEARLY HELD THAT BLENDING OF TEA DOES NOT AMOUNT TO MANUFACTURE OR PRODUCTION OF AN ARTICLE, BUT IS ONLY PROCESSING. EVEN THOUGH PROCESSING ALSO QUALIFIED F OR EXEMPTION UNDER THE DEFINITION CLAUSE OF 'MANUFACTURE' CONTAI NED IN SECTION 10B AND ASSESSEE WAS IN FACT GRANTED EXEMPTION UP T O THE ITA.1292/BANG/2010; IT(TP)A.887,963/BANG/2013 PAGE - 18 ASSESSMENT YEAR 2001-02, THE CONTENTION OF COUNSEL FOR THE REVENUE IS THAT ONCE THE DEFINITION CLAUSE OF 'MANU FACTURE' IS DELETED FROM THE ASSESSMENT YEAR 2001-02, THE PROCE SSING THAT WAS UNTIL THEN COVERED IN THE DEFINITION CLAUSE, NO LONGER QUALIFIES FOR EXEMPTION. THE QUESTION, THEREFORE, T O BE CONSIDERED IS WHETHER THE REMOVAL OF DEFINITION CLAUSE ON MANU FACTURE BY THE LEGISLATURE THROUGH THE AMENDMENT INTRODUCED BY THE FINANCE ACT, 2000 WITH EFFECT FROM THE ASSESSMENT YEAR 2001 -02 ONWARDS IS WITH THE OBJECT OF RESTRICTING THE BENEFIT OF EX EMPTION TO 100 PER CENT EXPORT ORIENTED UNITS, ONLY TO GOODS MANUF ACTURED OR PRODUCED BY THEM OTHER THAN THROUGH PROCESSING. IN THE DECISION OF THIS COURT ABOVE REFERRED, THIS COURT CONSIDERED THE EXEMPTION CLAUSE IN THE LIGHT OF THE PRINCIPLES LAID DOWN BY THE SUPREME COURT IN CIT V. GWALIOR RAYON SILK MFG. CO. LTD. [1 992] 196 ITR 149 , WHEREIN THE SUPREME COURT HELD AS FOLLOWS : 'IT IS SETTLED LAW THAT THE EXPRESSIONS USED IN A T AXING STATUTE WOULD ORDINARILY BE UNDERSTOOD IN THE SENSE IN WHICH IT IS HARMONIOUS WITH THE OBJECT OF THE STATU TE TO EFFECTUATE THE LEGISLATIVE INTENTION. IT IS EQUALLY SETTLED LAW THAT, IF THE LANGUAGE IS PLAIN AND UNAMBIGUOUS, ONE CAN ONLY LOOK FAIRLY AT THE LANGUAGE USED AND INTER PRET IT TO GIVE EFFECT TO THE LEGISLATIVE INTENTION. NEVERT HELESS, TAX LAWS HAVE TO BE INTERPRETED REASONABLY AND IN CONSONANCE WITH JUSTICE ADOPTING A PURPOSIVE APPROA CH. THE CONTEXTUAL MEANING HAS TO BE ASCERTAINED AND GI VEN EFFECT TO. A PROVISION FOR DEDUCTION, EXEMPTION OR RELIEF SHOULD BE CONSTRUED REASONABLY AND IN FAVOUR OF THE ASSESSEE.' 3. IN THIS CONTEXT WE NOTICE THAT THE DECISION OF T HE SUPREME COURT IN TARA AGENCIES CASE (SUPRA) ABOVE REFERRED WAS ON ASSESSEES ENTITLEMENT FOR WEIGHTED DEDUCTION ON EX PORT MARKET DEVELOPMENT ALLOWANCE PROVIDED UNDER SECTION 35B(1A ) OF THE ACT WHICH IS NO LONGER IN THE STATUTE. IN OUR VIEW, THE SCHEME OF DEDUCTION OF EXPORT MARKET DEVELOPMENT ALLOWANCE EA RLIER AVAILABLE AND THE SCHEME OF EXEMPTION ON EXPORT PRO FITS ARE DIFFERENT IN NATURE. IT MAY BE NOTICED THAT EXEMPTI ON ON EXPORT PROFIT IS AVAILABLE EVEN TO MERCHANT EXPORTERS BY V IRTUE OF THE ITA.1292/BANG/2010; IT(TP)A.887,963/BANG/2013 PAGE - 19 PROVISIONS CONTAINED UNDER SECTION 80HHC OF THE INC OME-TAX ACT. BESIDES THE EXEMPTION AVAILABLE ON PROFITS EAR NED IN EXPORT BUSINESS BY TRADERS, SPECIFIC PROVISIONS ARE INCORP ORATED IN SECTIONS 10A, 10AA AND 10B PROVIDING FOR EXEMPTION TO ENTIRE PROFITS EARNED BY INDUSTRIAL UNITS IN FREE TRADE ZO NES, SPECIAL ECONOMIC ZONES AND INDUSTRIES WHICH ARE DECLARED 10 0 PER CENT EXPORT ORIENTED UNITS. WHILE DECIDING THE ISSUE IN THE CASE OF THE INDUSTRY LOCATED IN THE SPECIAL ECONOMIC ZONE IN TH E CASE ABOVE REFERRED, THIS COURT HAS TAKEN INTO ACCOUNT THE DEF INITION OF 'MANUFACTURE' CONTAINED IN CHAPTER IX OF THE EXPORT IMPORT POLICY, 20022007, WHICH IS AS FOLLOWS : 'MANUFACTURE MEANS TO MAKE, PRODUCE, FABRICATE, A SSEMBLE, PROCESS OR BRING INTO EXISTENCE, BY HAND OR BY MACH INE, A NEW PRODUCT HAVING A DISTINCTIVE NAME, CHARACTER OR USE AND SHALL INCLUDE PROCESSES SUCH AS REFRIGERATION, REPACKING, POLISHING, LABELLING, RE-CONDITIONING, REPAIR, REMAKING, REFUR BISHING, TESTING CALIBRATION, RE-ENGINEERING. MANUFACTURE, FOR THE P URPOSE OF THIS POLICY, SHALL ALSO INCLUDE AGRICULTURE, AQUACULTURE , ANIMAL HUSBANDRY, FLORICULTURE, HORTICULTURE, PISCICULTURE , POULTRY, SERICULTURE, VITICULTURE AND MINING.' THIS COURT ALSO NOTICED THAT THE DEFINITION OF 'MAN UFACTURE' CONTAINED IN SECTION 2(R) OF THE SPECIAL ECONOMIC Z ONES ACT, 2005, WAS INCORPORATED LATER UNDER SECTION 10AA OF THE INCOME- TAX ACT WITH EFFECT FROM 10-2-2006, WHICH IS AS FOL LOWS : 'MANUFACTURE MEANS TO MAKE, PRODUCE, FABRICATE, A SSEMBLE, PROCESS OR BRING INTO EXISTENCE, BY HAND OR BY MACH INE, A NEW PRODUCT HAVING A DISTINCTIVE NAME, CHARACTER OR USE AND SHALL INCLUDE PROCESSES SUCH AS REFRIGERATION, CUTTING, P OLISHING, BLENDING, REPAIR, REMAKING, RE-ENGINEERING AND INCL UDES AGRICULTURE, AQUACULTURE, ANIMAL HUSBANDRY, FLORICU LTURE, HORTICULTURE, PISCICULTURE, POULTRY, SERICULTURE, V ITICULTURE AND MINING.' THE FINDING OF THIS COURT IS THAT THE PURPOSE OF IN CORPORATION OF SECTION 2(R) OF THE SPECIAL ECONOMIC ZONES ACT, 200 5 INTO SECTION 10AA OF THE INCOME-TAX ACT IS TO PROVIDE A LIBERAL MEANING TO THE ITA.1292/BANG/2010; IT(TP)A.887,963/BANG/2013 PAGE - 20 WORD 'MANUFACTURE' WHICH TAKES IN EVEN BLENDING, RE FRIGERATION ETC. IT WAS NOTICED BY THIS COURT THAT THE DEFINITI ONS OF 'MANUFACTURE' CONTAINED IN THE ABOVE DEFINITION CLA USES ARE VERY LIBERAL WHICH TAKES IN EVEN PROCESSING LIKE BLENDIN G. THE CONTENTION OF COUNSEL FOR THE ASSESSEE IS THAT THE PURPOSE OF REMOVAL OF DEFINITION OF 'MANUFACTURE' FROM SECTION 10B WAS NOT TO PROVIDE A RESTRICTED MEANING FOR THAT TERM CONTA INED IN THE MAIN SECTION BECAUSE IF THAT WAS SO, THEN THE LEGIS LATURE WOULD HAVE ONLY MODIFIED THE DEFINITION CLAUSE. FURTHER, DEFINITION OF 100 PER CENT EXPORT ORIENTED UNIT EVEN AFTER THE AM ENDMENT IS RETAINED IN THE SAID SECTION, WHICH DEFINES IT AS A N UNDERTAKING WHICH HAS BEEN APPROVED AS A 100 PER CENT EXPORT OR IENTED UNDERTAKING BY THE BOARD APPOINTED IN THIS BEHALF B Y THE CENTRAL GOVERNMENT IN EXERCISE OF POWERS CONFERRED BY SECTI ON 40 OF THE INDUSTRIES (DEVELOPMENT AND REGULATION) ACT, 1951 A ND RULES MADE UNDER THAT ACT. IT IS PERTINENT TO NOTE THAT T HE PRODUCTS FOR WHICH ASSESSEES UNIT IS RECOGNISED AS A 100 PER CE NT EXPORT ORIENTED UNIT ARE TEA BAGS, TEA IN PACKETS AND TEA IN BULK PACKS. IN FACT, ASSESSEE IS EXCLUSIVELY ENGAGED IN BLENDIN G AND PACKING OF TEA FOR EXPORT AND IS NOT MANUFACTURING OR PRODU CING ANY OTHER ARTICLE OR THING. STILL IT IS RECOGNISED AS A 100 PER CENT EXPORT ORIENTED UNIT BY THE CONCERNED AUTHORITY WIT HIN THE MEANING OF THAT TERM CONTAINED IN THE DEFINITION CL AUSE OF SECTION 10B OF THE INCOME-TAX ACT AND THE DEPARTMENT HAS NO CASE THAT ASSESSEES UNIT ENGAGED IN EXPORT OF TEA BAGS AND T EA PACKETS IS NOT A 100 PER CENT EXPORT ORIENTED UNIT. SO MUCH SO , IN OUR VIEW, IF EXEMPTION IS DENIED ON THE GROUND THAT PRO DUCTS EXPORTED ARE NOT PRODUCED OR MANUFACTURED IN THE INDUSTRIAL UNIT OF THE ASSESSEES 100 PER CENT EXPORT ORIENTED UNIT, THE S AME WOULD DEFEAT THE VERY OBJECT OF SECTION 10B. FURTHER, IND USTRIAL UNITS ENGAGED IN THE VERY SAME ACTIVITY, I.E., BLENDING, PACKING AND EXPORT OF TEA IN THE SPECIAL ECONOMIC ZONES AND FRE E TRADE ZONES, WILL CONTINUE TO ENJOY TAX EXEMPTION UNDER S ECTION 10A AND SECTION 10AA RESPECTIVELY. THE STILL WORSE POSI TION IS THAT THE APPELLANT WOULD BE DENIED OF EXPORT EXEMPTION AVAIL ABLE UNDER SECTION 80 HHC EVEN TO A MERCHANT EXPORTER. IN OUR VIEW, THE DECISION OF THE SUPREME COURT IN TARA AGENCIES CAS E (SUPRA) IS NOT APPLICABLE FOR THE PURPOSE OF CONSIDERING EXEMP TION FOR INDUSTRIES IN THE EXPORT PROCESSING ZONES, FREE TRA DE ZONES AND ITA.1292/BANG/2010; IT(TP)A.887,963/BANG/2013 PAGE - 21 TO 100 PER CENT EXPORT ORIENTED UNITS COVERED BY SE CTIONS 10, 10AA AND 10B OF THE INCOME-TAX ACT. THEREFORE, FOLL OWING THE JUDGMENT OF THIS COURT ABOVEREFERRED WE HOLD THAT A SSESSEE IS ENTITLED TO EXEMPTION ON THE PROFIT DERIVED BY ITS 100 PER CENT EXPORT ORIENTED UNIT ENGAGED IN BLENDING, PACKING A ND EXPORT OF TEA BAGS AND TEA PACKETS. CONSEQUENTLY WE ALLOW THE APPEALS BY REVERSING THE ORDERS OF THE TRIBUNAL AND BY RESTORI NG THE ORDERS OF THE FIRST APPELLATE AUTHORITY DECLARING APPELLAN TS ENTITLEMENT FOR EXEMPTION. 24. THEIR LORDSHIPS HAD CONSIDERED THE EFFECT OF SUBSTI TUTION OF SECTION 10B OF THE ACT BY FINANCE ACT, 2000 W.E.F. 2001. I T HAD HELD THAT FOR THE PURPOSE OF SECTION 10A, 10AA AND 10B, WHAT WAS RELE VANT WAS THE DEFINITION OF 'MANUFACTURE' AS MENTIONED IN CHAPTE R IX OF EXPORT IMPORT POLICY 2002 TO 2007, AND AS MENTIONED IN SECTION 2( R) OF SPECIAL ECONOMIC ZONES ACT, 2005. AS PER THIS, JUDGMENT FOR UNITS F ALLING WITHIN AN EXPORT PROCESSING ZONE, FREE TRADE ZONES AND 100% EXPORT O RIENTED UNITS COVERED BY SECTION 10A, 10AA AND 10B, WHAT WOULD B E RELEVANT IS THE DEFINITION OF 'MANUFACTURE' AS MENTIONED IN THE EXP ORT IMPORT POLICY AND SPECIAL ECONOMIC ZONES ACT, 2005. 25. FURTHER, HONBLE JURISDICTIONAL HIGH COURT IN THE C ASE OF CIT V. SAINT GOBINS CRYSTALS & DETECTORS INDIA (P) LTD [ITA.351 & 352 OF 2009, DT.19.01.2015], HAD HELD THAT ETYMOLOGICALLY THE WO RD MANUFACTURE PROPERTY CONSTRUED WOULD COVER TRANSFORMATION, WHEN A QUESTION REGARDING ITA.1292/BANG/2010; IT(TP)A.887,963/BANG/2013 PAGE - 22 APPLICABILITY OF SECTION 10B TO AN ASSEMBLING UNIT WAS RAISED BEFORE IT. 26. COMING TO THE ASPECT OF FINDING OF CIT (A) AND AO THAT ASSESSEE WAS NOT HAVING THE REQUIRED RECOGNITION UNDER CSEZ AS A 100% EOU, OFFICE MEMORANDUM (OM), DATED.18.01.2011, ISSUED BY MINISTRY OF COMMERCE AND INDUSTRY OF GOVERNMENT OF INDIA, PLACE D AT PAPER BOOK PAGE 275 TO 298 SHOW THAT ASSESSEE WAS APPROVED AS AN E OU. EXPLANATION 2(IV) TO SECTION 10B READS AS UNDER : (IV) HUNDRED PER CENT EXPORT-ORIENTED UNDERTAKING MEANS AN UNDERTAKING WHICH HAS BEEN APPROVED AS A HUNDRED PE R CENT EXPORT-ORIENTED UNDERTAKING BY THE BOARD APPOINTED IN THIS BEHALF BY THE CENTRAL GOVERNMENT IN EXERCISE OF THE POWERS CONFERRED BY SECTION 14 OF THE INDUSTRIES (DEVELOPM ENT AND REGULATION) ACT, 1951 (65 OF 1951), AND THE RULES M ADE UNDER THAT ACT. THERE IS NO CASE FOR THE REVENUE THAT THE BOARD WHI CH GAVE APPROVAL MENTIONED IN THE ABOVE OM, WAS NOT ONE WHICH WAS AP POINTED BY CENTRAL GOVERNMENT UNDER IDR ACT, 1951. ASSESSEE WAS THERE FORE A HUNDRED PERCENT EXPORT ORIENTED UNDERTAKING. 27. IN SUCH CIRCUMSTANCES, WE ARE OF THE OPINION THAT A SSESSEES CLAIM U/S.10B OF THE ACT, HAD TO BE ALLOWED. DISALLOWANC E OF SUCH CLAIM AND THE ADDITION MADE STANDS DELETED. ITA.1292/BANG/2010; IT(TP)A.887,963/BANG/2013 PAGE - 23 28. GROUND NOS.2, 3 AND 4 OF THE ASSESSEE ARE ALLOWED. 29. COMING TO ITS GROUND 5, GRIEVANCE OF THE ASSESSEE I S THAT EXPORT BILLS REALIZED BELATEDLY WERE EXCLUDED FROM EXPORT TURNOV ER WHILE COMPUTING DEDUCTION U/S.10B OF THE ACT. LD.AR SUBMITTED THAT ASSESSEES REALISATIONS FROM EXPORTS WERE AS UNDER : SL. NO. DESCRIPTION AMOUNT 1. REALISED BEFORE 30.09.2007 RS.45,63,18,012.13 2. REALISED BEFORE 1 YEAR FROM THE DATE OF EXPORTS RS.2,55,64,662.57 3. REALISED AFTER 1 YEAR FROM THE DATE OF EXPORTS R S.28,17,17,233.95 4 NOT YET REALIZED RS.2,16,87,825.35 30. AS PER THE LD. AR, AO HAD CURTAILED THE CLAIM OF TH E ASSESSEE U/S.10B OF THE ACT, BY EXCLUDING FROM TURNOVER, REA LIZATIONS AFTER 30.09.2007. THOUGH THE ASSESSEE RELIED ON A CIRCUL AR OF RBI, AO WAS OF THE OPINION THAT ASSESSEE DID NOT HAVE ANY SPECIFIC SANCTION FROM RBI TO RECEIVE EXPORT RECEIPTS EVEN AFTER SIX MONTHS FROM THE END OF THE RELEVANT FINANCIAL YEAR. AS PER THE LD. AR THIS VIEW WAS CO NFIRMED BY THE CIT (A) IN ITS APPEAL. RELYING ON AN RBI CIRCULAR DATED.01. 04.2003, PLACED AT PAPER BOOK PAGE 441, LD. AR SUBMITTED THAT BLANKET PERMIS SION HAS BEEN GIVEN BY RBI TO AUTHORISED DEALERS TO REALISE AND REPATRI ATE TO INDIA, FULL VALUE OF ITA.1292/BANG/2010; IT(TP)A.887,963/BANG/2013 PAGE - 24 GOODS OR SOFTWARE WITHOUT ANY SPECIFIC TIME LIMIT W HEN THE EXPORTS WERE MADE FROM UNITS IN SEZ. ACCORDING TO HIM, WHEN A B LANKET PERMISSION WAS THERE, THERE WAS NO QUESTION OF ANY SPECIFIC PERMIS SION BEING OBTAINED BY THE ASSESSEE. FURTHER AS PER THE LD. AR, ASSESSEE HAD NET EXCHANGE GAIN OF RS.3,76,61,463/- ARISING OUT OF EXCHANGE GAIN DUE T O THE REALISATION OF FOREIGN EXCHANGE ARISING OUT OF SALES MADE EARLIER. AS PER THE LD. AR THIS ALSO WAS ELIGIBLE FOR DEDUCTION U/S.10B OF THE ACT, SINCE THE GAIN AROSE FROM REALISATION OF EXPORT TURNOVER. 31. PER CONTRA, LD. DR SUPPORTED THE ORDERS OF AUTHORIT IES BELOW. 32. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL CONT ENTIONS. SUB- SECTION (3) OF SECTION 10B OF THE ACT, IS REPRODUCE D BELOW : (3) THIS SECTION APPLIES TO THE UNDERTAKING, IF THE SALE PROCEEDS OF ARTICLES OR THINGS OR COMPUTER SOFTWARE EXPORTED OU T OF INDIA ARE RECEIVED IN, OR BROUGHT INTO, INDIA BY THE ASSESSEE IN CONVERTIBLE FOREIGN EXCHANGE, WITHIN A PERIOD OF SIX MONTHS FRO M THE END OF THE PREVIOUS YEAR OR, WITHIN SUCH FURTHER PERIOD AS THE COMPETENT AUTHORITY MAY ALLOW IN THIS BEHALF. EXPLANATION 1. FOR THE PURPOSES OF THIS SUB-SECTIO N, THE EXPRESSION 'COMPETENT AUTHORITY' MEANS THE RESERVE BANK OF INDIA OR SUCH OTHER AUTHORITY AS IS AUTHORISED UNDER ANY LAW FOR THE TIME BEING IN FORCE FOR REGULATING PAYMENTS AND DEALINGS IN FOREIGN EXCHANGE. EXPLANATION 2. THE SALE PROCEEDS REFERRED TO IN TH IS SUB-SECTION SHALL BE DEEMED TO HAVE BEEN RECEIVED IN INDIA WHER E SUCH SALE ITA.1292/BANG/2010; IT(TP)A.887,963/BANG/2013 PAGE - 25 PROCEEDS ARE CREDITED TO A SEPARATE ACCOUNT MAINTAI NED FOR THE PURPOSE BY THE ASSESSEE WITH ANY BANK OUTSIDE INDIA WITH THE APPROVAL OF THE RESERVE BANK OF INDIA. 33. ABOVE SUB SECTION ALLOWS AN ASSESSEE TO CLAIM THE B ENEFIT OF THE SAID SECTION FOR EXPORT PROCEEDS WHICH ARE BROUGHT INTO INDIA WITHIN A PERIOD OF SIX MONTHS OR WITHIN A FURTHER PERIOD AS ALLOWED BY COMPETENT AUTHORITY. EXPLANATION (1) CLEARLY STATES THAT COMPETENT AUTHO RITY IS RBI. AP (DIR) SERIES CIRCULAR NO.91, DT.01.04.2003 OF RBI STATES AS UNDER : A. REALISATION OF EXPORT PROCEEDS IN TERMS OF PARA 11 OF AP (DIR SERIES) CIRCULAR NO .28, DATED MARCH 30,2001, UNITS SITUATED IN SPECIAL ECONOMIC Z ONES HAVE BEEN PERMITTED TO REALIZE AND REPATRIATE TO INDIA T HE FULL VALUE OF GOODS OR SOFTWARE WITHIN A PERIOD OF TWELVE MONTHS FROM THE DATE OF EXPORT. IT HAS NOW BEEN DECIDED TO REMOVE THE S TIPULATION OF TWELVE MONTHS OR EXTENDED PERIOD THEREOF FOR REALIZ ATION OF EXPORT PROCEEDS. ACCORDINGLY, THERE SHALL BE NO PR ESCRIPTION OF ANY TIME LIMIT FOR REALIZATION OF EXPORTS MADE BY U NITS IN SEZS. HOWEVER, THE UNITS IN SEZS WILL CONTINUE TO FOLLOW THE FR/PP.SOFTEX EXPORT PROCEDURE OUTLINED IN PART B OF ANNEXURE TO A. P. (DIR SERIES) CIRCULAR NO.12 DATED SEPTEMBE R 9, 2000 AS AMENDED FROM TIME TO TIME. 34. THERE IS NO DISPUTE THAT ASSESSEE WAS AN UNIT IN SE Z. IT BEING SO, IN OUR OPINION ASSESSEE COULD NOT HAVE BEEN FASTENED W ITH ANY TIME LIMIT FOR BRINGING THE SALE PROCEEDS IN FOREIGN EXCHANGE TO I NDIA. NO DOUBT ASSESSEE COULD NEVER MAKE SUCH CLAIMS FOR AMOUNTS WHICH WAS NOT REALISED AT ALL. ITA.1292/BANG/2010; IT(TP)A.887,963/BANG/2013 PAGE - 26 HOWEVER IN SO FAR AS ITEMS AT SL.NOS.2 AND 3 OF THE TABLE AT PARA 29, VIZ., RS.2,55,64,662.57 REALISED WITHIN ONE YEAR OF THE E XPORTS, AND RS.28,17,17,233.95 REALIZED AFTER ONE YEAR OF THE D ATE OF EXPORTS, ASSESSEE WAS ELIGIBLE FOR CLAIMING DEDUCTION. FOREX GAINS O F RS.3,71,61.463/- EARNED BY THE ASSESSEE WAS ON ACCOUNT OF EXCHANGE G AIN ARISING OUT OF THE DIFFERENCE BETWEEN DATE OF REALISATION OF EXPORT PR OCEEDS AND DATE OF INVOICING. THESE WERE DIRECTLY RELATED TO THE EXPO RT TURNOVER OF THE ASSESSEE AND ALSO HAS TO BE CONSIDERED AS PART OF P ROFITS ARISING FROM ASSESSEE'S 100% EOU. SUCH AMOUNT IS ALSO IN OUR OP INION ELIGIBLE FOR DEDUCTION U/S.10B OF THE ACT. AO IS DIRECTED TO G RANT DEDUCTION U/S.10B OF THE ACT FOR ALL THE AMOUNTS REALISED BY IT FROM THE SALES EFFECTED BY IT INCLUDING THE FOREX GAINS. GROUND.5 OF THE ASSESSE E STANDS ALLOWED. 35. GROUND 6 OF THE ASSESSEE IS WITH REGARD TO ITS ALTE RNATE CLAIM U/S.80IB(11) OF THE ACT. SINCE WE HAVE ALREADY HEL D THAT ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S.10B OF THE ACT, THIS GRO UND IS DISMISSED AS INFRUCTUOUS. 36. VIDE ITS GROUNDS 7, 8, AND 10, ASSESSEE IS AGGRIEV ED ON DISALLOWANCE ON TRAVELLING EXPENSES, FARMER WELFARE EXPENSES AND PR OVISION MADE FOR DOUBTFUL DEBTS. LD. AR SUBMITTED THAT SUCH DISALLOWANCES WO ULD ONLY GO TO INCREASE IN ITA.1292/BANG/2010; IT(TP)A.887,963/BANG/2013 PAGE - 27 THE PROFITS OF THE ASSESSEE WHICH WAS ELIGIBLE FOR DEDUCTION U/S.10B OF THE ACT AND HAD NO TAX RAMIFICATION. IN VIEW OF THE ABOVE SUBMISSIONS OF THE LD. AR, GROUNDS 7, 8 AND 10 ARE DISMISSED AS INFRUCTUOUS. 37. LD. AR SUBMITTED THAT HE WAS NOT PRESSING GROUND NU MBER 9. HENCE, GROUND NUMBER 9 IS DISMISSED AS NOT PRESSED. 38. NOW WE TAKE UP CROSS APPEAL OF THE REVENUE. REVENU E IS AGGRIEVED THAT CIT (A) GAVE RELIEF OF RS.39,46,476/- ON TRAVE LLING EXPENDITURE AND RS.26,71,640/- IN RESPECT OF CREDIT NOTES TO THE AS SESSEE. 39. LD. DR SUBMITTED THAT DISALLOWANCES MADE BY THE AO WERE BECAUSE THE CLAIMS WERE UNLAWFUL. ACCORDING TO HER, CIT (A ) HAD ALLOWED A SUM OF RS.39,46,476/- OUT OF THE TOTAL CLAIM OF RS.64,01,4 77/- IN RESPECT OF TRAVELLING EXPENDITURE. FURTHER ACCORDING TO HER, CREDIT NOTES FOR WHICH ASSESSEE COULD NOT SHOW ANY RELATION TO THE PARTIES WERE ALSO ALLOWED BY THE CIT (A). 40. PER CONTRA, LD. AR STRONGLY SUPPORTED THE ORDER OF CIT (A) IN THIS REGARD. 41. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL CONT ENTIONS. FINDING OF THE CIT (A) WITH REGARD TO THE CLAIM OF TRAVELLI NG EXPENDITURE IS ITA.1292/BANG/2010; IT(TP)A.887,963/BANG/2013 PAGE - 28 REPRODUCED HEREUNDER : 4.3 I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE APPELLANT AND PERUSED THE RECORDS. THE APPELLAN T IN THEIR SUBMISSIONS DATED 17/1/2012 EXPLAINED THAT AN AMOUNT O RS.39,46,476/- IS RELATING TO THE AY 20 07- 08 AND THE BALANCE AMOUNT OF RS.24,55,001 IS RELATING TO THE YEAR UNDER CONSIDERATION. THEREFORE IT WAS ARGUED THAT THE DISALLOWANCE OF RS.64,01,477 IS NOT CORRECT. THE APPELLANT ALSO STATED THAT THE EXPENDITURE WAS INCURRED FOR THE PURPOSE OF BUSINESS AND THERE WAS NO PERSONAL EXPENDITURE INCU RRED AND THE AO'S CONCLUSION THAT THE EXPENDITURE WAS BOGUS IS NOT CORRECT. IT MAY BE SEEN FROM THE ASSESSMENT ORD ER THAT THE INTERNAL AUDIT REPORT HAS CLEARLY MENTIONE D THAT THERE WAS NO BASIS FOR CHARGING AND NO BILLS W ERE AVAILABLE IN RESPECT OF THE PAYMENTS MADE TO M/S EX TASY PVT LTD. THE AO HAD GIVEN DETAILED REASONS IN THE ASSES SMENT ORDER AT PAGE NO.34 TO 35 HOWEVER, THE APPELLANT VI DE ITS LETTER DATED 16/10/2012 FILED SOME ADDITIONAL EVIDENCE RELATING TO THE TRAVELLING EXPENSES IN THE FORM OF LEDGER ACCOUNT OF M/S ECSTASY LTD. IN THE BOOKS OF ACCOUNT OF THE APPELLANT. THIS ADDITIONAL EVIDENCE WAS FORWARDED TO THE AO WHO SENT HIS REPORT BY LETTER 24/12/2012, STATING THAT THE SAID LEDGER ACC OUNT WAS ALREADY FURNISHED BY THE APPELLANT AT THE TIME OF ASSESSMENT PROCEEDINGS AND HAD ALREADY BEEN VERIFIE D AND REITERATED THE. REASONS GIVEN IN THE ASSESSMENT ORD ER AND RECOMMENDED FOR CONFIRMING THE ADDITION. THE APPELLANT IN THEIR REJOINDER TO THE REMAND REPORT OBJECTED TO THE AO'S FINDING STATING THAT THERE WAS NO ENQUIRY MADE BY THE AO BEFORE COMING TO THE CONCLUSION AND REQUESTED FOR ALLOWING THE TRAVELLING EXPENSES. FILING OF THE LEDGER ACCOUNT ITA.1292/BANG/2010; IT(TP)A.887,963/BANG/2013 PAGE - 29 DOES NOT PROVE THE GENUINENESS OF THE EXPENDITURE U NLESS IT IS CONFIRMED BY THE TRAVEL COMPANY. NO EVIDENCE HAS BEEN PRODUCED FROM THE TRAVEL COMPANY TO PROVE THE GENUINENESS OF THE EXPENDITURE INCURRED. THE BURDEN IS ON THE APPELLANT TO PROVE THIS ASPECT. HENCE, THE LEDGER ACCOUNT CANNOT BE ACCEPTED AS A VALID EVIDENCE. THEREFORE, THE AMOUNT OF RS.64,01,477/DISALLOWED BY THE AO IS RESTRICTED TO RS.24,55,001/- WHICH IS RELATING TO THIS YEAR. AS REGARDS THE BALANCE AMOUNT OF RS.39,46,476 IS RELATING TO 2007-08, THE SAME CANNOT BE SUSTAINED A S IT RELATED TO PREVIOUS ASSESSMENT YEAR. THE APPELLANT GETS A RELIEF OF RS.39,46,476/-. 42. HIS FINDINGS WITH REGARD TO CREDIT NOTES IS REPRODU CED HEREUNDER : 9.2 I HAVE CAREFULLY CONSIDERED THE APPELLANT'S SUBMISSIONS AND PERUSED THE ASSESSMENT ORDER AS WEL L AS THE REMAND REPORT. ISSUE OF CREDIT NOTES TO THE CUSTOME RS IS A COMMON BUSINESS PRACTICE FOR DIFFERENT REASONS TO G IVE DISCOUNT TO CUSTOMERS. THE APPELLANT FILED ONLY SAM PLE CREDIT NOTES AND, THEREFORE, THEY MAY NOT RELATE TO THE PARTIES MENTIONED IN THE ASSESSMENT ORDER. THE SAMP LE CREDIT NOTES ARE GIVEN FOR UNDERSTANDING THE BUSINESS PRAC TICE. IN VIEW OF THE SMALL QUANTUM INVOLVED, THE EXPENDITURE IN RESP ECT OF CREDIT NOTES IS REASONABLE AND, THEREFORE, ALLOWABLE CONSI DERING THE SUBMISSIONS OF THE APPELLANT. 43. CIT (A) HAS GIVEN A CLEAR FINDING THAT ASSESSEE HAD PRODUCED EVIDENCE WITH REGARD TO THE SUM OF RS.39,46,476/- O N TRAVELLING EXPENDITURE. WITH REGARD TO THE CREDIT NOTES, CIT (A) OBSERVED THAT ASSESSEE HAD FILED SAMPLE CREDIT NOTES AND JUST BEC AUSE IT DID NOT RELATE TO ITA.1292/BANG/2010; IT(TP)A.887,963/BANG/2013 PAGE - 30 THE PARTIES IN THE ASSESSMENT ORDER, CREDIT NOTES C OULD NOT BE IGNORED. NOTHING WAS BROUGHT BEFORE US TO TAKE A DIFFERENT V IEW. WE THEREFORE DO NOT FIND ANY MERIT IN THIS APPEAL FILED BY THE REVE NUE. IT STANDS DISMISSED. 44. IN THE RESULT, APPEAL OF THE ASSESSEE FOR A. YS. 20 06-07 AND 2007-08 ARE PARTLY ALLOWED, WHEREAS APPEAL OF THE REVENUE F OR A. Y. 2007-08 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18TH DAY OF M ARCH, 2016. SD/- SD/- (VIJAY PAL RAO) (ABRA HAM P GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER