M/s Hi-Tech Foods, Solan V. ITO, Solan

ITA 161/CHANDI/2011

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6176 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 year(s) 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-07-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 09-07-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 10-02-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: J S NAGAR
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B, CHANDIGARH BEFORE SHRI T.R. SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO. 161/CHD/2011 ASSESSMENT YEARS : 2006-07 M/S HI TECH FOODS V I.T.O. WARD 1, SOLAN SOLAN AACFH 7996 J (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI SURINDER BABBAR RESPONDENT BY: SHRI J .S. NAGAR DATE OF HEARING 9.7.2014 DATE OF PRONOUNCEMENT 11.7.2014 O R D E R PER T.R. SOOD, A.M THIS APPEAL IS DIRECTED AGAINST THE ORDER DATED 2.1 2.2010 OF THE LD CIT(A), SHIMLA. 2. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLO WING GROUNDS: 1 ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE L D. CIT(A) SHIMLA HAS GROSSLY ERRED IN UPHOLDING THE REJECTION OF CLAIM OF THE ASSESSEE U/S 80IC OF THE ACT AMOUNTING TO RS. 28,38 ,853/-. 2 ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD . CIT(A) SHIMLA HAS ERRED IN CONCURRING WITH THE ASSESSING O FFICER IN HOLDING THAT: (A) THE APPELLANTS BUSINESS IS BASICALLY A FLOUR M ILL WHICH FALLS UNDER SR NO. 8 OF PART B TO THIRTEENTH SCHEDULE. (B) THE APPELLANT HAS NOT COMPLIED WITH THE INVESTM ENT CRITERIA AS LAID DOWN U/S 80IC FOR SUBSTANTIAL EXPANSION. (C) EXEMPTION GRANTED TO THE ASSESSEE UNDER HP GENE RAL SALES TAX DOES NOT EFFECT EXEMPTION UNDER THE INCOME-TAX LAW. (D) EXCISE CLASSIFICATION UNDER 13 TH SCHEDULE DOES NOT MAKE ANY DISTINCTION BETWEEN FLOUR MILL AND A ROLLER FLOUR M ILL. 3 AFTER HEARING BOTH THE PARTIES WE FIND THAT THE A SSESSEE HAS BEEN DENIED DEDUCTION U/S 80IC AND THE ACTION O F ASSESSING OFFICER HAS BEEN CONFIRMED BY THE LD. CIT (A). 4 BOTH THE PARTIES WERE HEARD. 2 5 AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND T HAT THIS ISSUE IS IDENTICALLY SAME AS THE ISSUE WHICH CAME U P FOR CONSIDERATION IN ASSESSEES OWN CASE FOR ASSESSMENT YEARS 2004-05, 2005-06 AND 2007-08 IN ITA NO. 987, 988 & 989/CHD/2011 BEFORE THE TRIBUNAL. THE ISSUE WAS AD JUDICATED VIDE PARA 9 & 10 WHICH IS AS UNDER: 9 WE HAVE HEARD THE RIVAL SUBMISSIONS CAREFULLY. FIRST OF ALL THE ASSESSEE WAS RUNNING FLOUR MILL ON WHICH DEDUCT ION U/S 80IB(4) HAS ALREADY BEEN ALLOWED BY THE ASSESSING OFFICER AT 25%. LATER ON IT IS CLAIMED THAT THE SAME WAS UPG RADE TO ROLLER FLOUR MILL AND THE ASSESSEE WAS ENTITLED TO 100% DE DUCTION U/S 80IC. IN THIS REGARD THE LD. CIT(A) HAS GIVEN A SP ECIFIC FINDING THAT ADDITION IN MACHINERY HAS NOT BEEN PROVED WIT H DOCUMENTARY EVIDENCE TO SUPPORT THE SAME. THIS MEANS THE ASSE SSEE COULD NOT PROVE THAT THE MACHINERY HAS REALLY BEEN UPGRAD ED. BEFORE US, NO SUBMISSIONS WERE MADE IN THIS REGARD THEREFORE, THERE IS NO MATERIAL ON RECORD TO SHOW THAT THE ASSESSEE HAS A ROLLER FLOUR MILL. IN ANY CASE WE HAD DISCUSSED THIS ISSUE IN D ETAIL IN CASE OF POOJA INDUSTRIES (SUPRA) AND OBSERVED THAT THERE IS NO DIFFERENCE BETWEEN ROLLER FLOUR MILL AND FLOUR MILL. SINCE TH E FLOUR MILL AS MENTIONED AT S NO. 8 IN PART B OF SCHEDULE 13 WHICH IS IN NEGATIVE LIST FOR HIMACHAL PRADESH. THIS OBSERVATION WAS GI VEN ON THE BASIS OF CLASSIFICATION GIVEN IN NATIONAL INDUSTRIE S CLASSIFICATION AND NIC 1998 WHICH ALSO CLARIFIED THE ACTIVITY IN A PARTICULAR INDUSTRIES AND ULTIMATELY IT WAS HELD THAT ACTIVIT Y OF FLOUR MILL AND ROLLER FLOUR MILL IS SAME. FOR THE SAKE OF CLARITY WE WOULD LIKE TO REPRODUCE PARAS NO. 9 TO 12 OF THE ORDER OF THE TRI BUNAL IN CASE OF POOJA INDUSTRIES (SUPRA) WHICH ARE AS UNDER: 9 WE HAVE HEARD THE RIVAL SUBMISSIONS CAREFULLY. WE FIND THAT THE LD. CIT(A) HAS DISCUSSED THE ISSUE IN DETAIL AN D IN THIS REGARD WE WOULD LIKE TO PRODUCE PARA 4 TO 4.4 OF HER ORDER WHICH ARE AS UNDER: 4 THE RIVAL SUBMISSIONS HAVE BEEN CONSIDERED. Q - THE ENTRY AT SR NO. 8 IN SCHEDULE XIII, PART B READS FLOUR MILL/RICE MILL. ON THE FACT OF IT, THE ENTRY MAKE S IT CLEAR THAT ALL TYPES OF FLOUR MILLS AND RICE MILLS ARE CO VERED BY THIS ENTRY. IT DOES NOT ELABORATE THE CATEGORIES OR TYP ES OF FLOUR MILLS AND RICE MILLS. THE HEADING OF THE XIII SCHE DULE READS LIST OF ARTICLE OR THING. THEREFORE, IT IS CLEA R THAT WHAT IS PROHIBITED BY VIRTUE OF XIII SCHEDULE IS THE PRODUCTION/MANUFACTURING OF THE SPECIFIED ARTICLES OR THINGS. ACCORDINGLY, IT IS THE PRODUCTION OF FLOUR/RICE THR OUGH FLOUR MILL/RICE MILL WHICH IS BARRED FROM ENTITLEMENT U/S 80IC OF THE INCOME-TAX ACT, 1961 BY VIRTUE OF SCHEDULE XIII. T HUS THE PROHIBITION IS IN RESPECT OF THE PRODUCTION OF FLO UR, AND IT IS IMMATERIAL WHETHER THE FLOUR MILL PRODUCING THE FLO UR IS AN ORDINARY CHAKKI OR A ROLLER FLOUR MILL. IN FACT, L OGICALLY SPEAKING, THE PROVISIONS OF SECTION 80IC READ WITH SCHEDULE XIII WOULD HARDLY BE RELEVANT IN THE CASE OF AN ORD INARY CHAKKI WHICH DOES NOT INVOLVE SO MUCH OF INVESTMENT , WHAT TO TALK OF SUBSTANTIAL EXPANSION AND SUCH OTHER THI NGS. FURTHER FLOUR MILLS CAN BE OF VARIOUS TYPES, SUCH A S STONE MILL, HAMMER MILL, PLATE MILL, PIN MILL, ROLLER MIL L ETC. THE EQUIPMENT USED IN THESE MILLS CAN BE POWERED BY HAN D, WATER, ANIMALS, ELECTRICITY OR DIESEL ENGINE. THE ONLY DIFFERENCE BETWEEN VARIOUS MILLING PROCESSES IS THA T OF TECHNIQUE AND SPEED. FLOUR IS A COMMON PRODUCT IN A LL KINDS 3 OF MILLING PROCESSES. THEREFORE, IT CAN NOT BE SAI D THAT WHAT IS INTENDED BY ENTRY NO.8 IN PART B OF SCHEDULE XII I IS ONLY A STONE MILL AND NOT A HAMMER MILL OR A PLATE MILL OR A PIN MILL OR A ROLLER FLOUR MILL. PUTTING SUCH AN INTERPRETA TION WOULD REDUCE THE ENTRY TO A FARCE. 4.1 FURTHER, THE RELEVANT ENTRY OF FLOUR MILL/RICE MILLS IN SCHEDULE XIII ALSO MENTIONS AN EXCISE CLASSIFICATIO N OF 11.01 AGAINST IT. THIS CLASSIFICATION CODE REFERS TO CLA SSIFICATION OF PRODUCTS UNDER THE CENTRAL EXCISE TARIFF ACT, WHICH DEALS WITH PRODUCTS OF THE MILLING INDUSTRY. THERE IS NO DISTINCTION MADE IN THIS CHAPTER BETWEEN GOODS PRODUCED BY ROLL ER FLOUR MILLS OR BY ANY OTHER TYPE OF FLOUR MILL. VARIOUS PRODUCTS ARE CLASSIFIED AS PER THE STARCH CONTENT AND ASH CONTEN T. THE CODE 11.01 REFERS TO WHEAT FLOUR AND THERE IS NO DI STINCTION MADE AS TO WHETHER THE WHEAT FLOUR IS MADE BY A ROL LER MILL OR BY ANY OTHER MILL. 4.2 CERTAIN DECISIONS UNDER THE CENTRAL EXCISE TARI FF ACT ALSO MAKE IT CLEAR THAT THE CLASSIFICATION CODE 11. 01 IS A BROAD HEADING WHICH COVERS VARIOUS PRODUCTIONS OF T HE MILLING INDUSTRY. IN THE CASE OF BHAGYALAXMI POHA INDUSTRIES V. COMMISSIONER (2007) 215 ELT 458 (TRIB BANGALORE) , IT WAS HELD THAT RICE FLAKES OR POHA ARE PRIME FACIE C LASSIFIABLE UNDER HEADING 11.01 OF THE CENTRAL EXCISE TAFIFF. IN ANOTHER CASE OF MAHAVIR FOOD PRODUCTS V COMMISSIONER (2007) 211 ELT 29 (TRIB LB), IT HAS BEEN HELD THAT MAKAI POHA I.E. CORN BOILED AND FLATTENED BETWEEN ROLLERS, IS CLASSIFIAB LE UNDER THE HEADING 11.01 OF THE CENTRAL EXCISE TARIFF ACT. 4.3 THE ASSESSEES CONTENTION THAT THE STATE GOVERN MENT OF HIMACHAL PRADESH HAS ACCEPTED THE DISTINCTION BE TWEEN FLOUR MILL AND ROLLER FLOUR MILL IS OF NO RELEVANT. THE SCHEME OF SALES TAX INCENTIVES WHICH WAS IN FORCE IN THE S TATE IN 1994 WAS ENTIRELY A SEPARATE SCHEME NOTIFIED BY THE STATE GOVERNMENT. THAT SCHEME HAS NO RELEVANCE OR CONNEC TION WITH THE TAX HOLIDAY COMPRISED IN SECTION 80IC, WHI CH WAS ENACTED BY THE FINANCE ACT, 2003 AS A PART OF THE N EW INDUSTRIAL POLICY OF THE CENTRAL GOVERNMENT ANNOUNC ED IN 2003 FOR STATES LIKE H.P. THIS BECOMES FURTHER CLE AR BY THE FACT THAT THE LIST OF INELIGIBLE INDUSTRIES CONTAIN ED IN SCHEDULE XIII IS ALMOST ENTIRELY DIFFERENT IN CONTE NT FROM THE LIST OF UNITS DECLARED TO BE INELIGIBLE FOR SALES T AX INCENTIVES BY THE STATE GOVERNMENT. FOR THE PURPOSE OF THE IN COME-TAX ACT, THE ENTRY IN SCHEDULE XIII HAS TO BE UNDERSTOO D IN ITS NORMAL SENSE AND NOT IN TERMS OF ANY CLARIFICATIONS ISSUED BY THE STATE GOVERNMENT UNDER AN ENTIRELY DIFFERENT SC HEME. 4.4 A STATUTE IS THE EDICT OF THE LEGISLATURE. THE LANGUAGE EMPLOYED IN A STATUTE IS THE DETERMINATIVE FACTOR O F THE LEGISLATIVE INTENT. THE FIRST AND PRIMARY RULE OF CONSTRUCTION IS THAT ONE MUST GO BY THE INTENTION OF THE LEGISLA TION ITSELF AS HELD IN PADMASUNDRA RAO V STTE OF TN 255 ITR 147 (S.C); CGT V. LAXMI DEVI 220 ITR 50, CIT V.DEEP CHAND, 254 7 ITR 756. IT WAS ALSO HELD BY HON'BLE SUPREME COURT IN THE CASE OF VIKRANT TYRES V FIRST ITO, 247 ITR 821 (S.C) THA T UNLESS THERE IS AN INTENTION TO THE CONTRARY, THE WORDS IN A STATUTE SHOULD BE GIVEN THEIR ORDINARY GRAMMATICAL OR NATUR AL MEANING (EMPHASIS SUPPLIED). THE RELEVANT PORTION OF SECTION 80IC READS AS UNDER : 80-IC. (1) WHERE THE GROSS TOTAL INCOME OF AN ASSE SSEE INCLUDES ANY PROFITS AND GAINS DERIVED BY AN UNDERTAKING OR AN ENTERPRISE FROM ANY BUSINESS REFERRED TO IN SUB-SECTION (2), T HERE SHALL, IN 4 ACCORDANCE WITH AND SUBJECT TO THE PROVISIONS OF TH IS SECTION, BE ALLOWED, IN COMPUTING THE TOTAL INCOME OF THE ASSES SEE, A DEDUCTION FROM SUCH PROFITS AND GAINS, AS SPECIFIED IN SUB-SECTION (3). (2) THIS SECTION APPLIES TO ANY UNDERTAKING OR ENTE RPRISE, (A) WHICH HAS BEGUN OR BEGINS TO MANUFACTURE OR PRO DUCE ANY ARTICLE OR THING, NOT BEING ANY ARTICLE OR THING SP ECIFIED IN THE THIRTEENTH SCHEDULE, OR WHICH MANUFACTURES OR PRODU CES ANY ARTICLE OR THING, NOT BEING ANY ARTICLE OR THING SP ECIFIED IN THE THIRTEENTH SCHEDULE AND UNDERTAKES SUBSTANTIAL EXPA NSION DURING THE PERIOD BEGINNING THE THIRTEENTH SCHEDULE (SEE SECTIONS 80IB(4) AND 80IC(2)} LIST OF ARTICLES OR THINGS PART A FOR THE STATE OF SIKKIM --------------------------------------------------- --------------------------- SCHEDULE XIII LIST OF ARTICLES OR THINGS PART B FOR THE STATE OF HIMACHAL PRADESH AND THE STATE OF UTTARANCHAL S NO ACTIVITY OR ARTICLE OR THING EXCISE CLASSIFICATION SUB-CLASS UNDER NATIONAL INDUSTRIAL CLASSIFICATION (NIC) 1998 1 TOBACCO AND TOBACCO PRODUCTS INCLUDING CIGARETTES AND PAN MASALA 24.01 TO 24.04 AND 21.06 1600 2 THERMAL POWER PLANT (COAL / OIL BASED) 40102 OR 40103 3 COAL WASHERIES/DRY COAL PROCESSING 4 INOROGANIC CHEMICALSL LEXCLUDING MEDICINAL GRADE OXYGEN (2804.11), MEMDICINAL GRADE HYDROGEN PEROXIDE (2847.11), COMPRESSED AIR (2851.30) CHAPTER 28 5 ORGANIC CHEMICALS EXCLUDING PROVITAMINS/VITAMINS, HORMONES (29.36), GLYCOSIDES (29.39), SUGAR (29.40) CHAPTER 29 24117 6 TANNINGAND DYEING EXTRACTS, TANNINS AND THEIR DERIVATIVES, DYES, COLOURS, PAINTS AND VARNISHES, PUTTY, FILLERS AND OTHER MASTICS, INKS CHAPTER 32 24113 OR 24114 7 MARBLE AND MINERAL SUBSTANCES NOR CLASSIFIED ELSEWHERE 25.04 25.05 14106 OR 14107 5 8 FLOUR MILLS/RICE MILLS 11.01 15311 9 TO 20 FROM THE ABOVE IT IS CLEAR THAT DEDUCTION U/S 80IC IS AVAILABLE WHENEVER THE ASSESSEE UNDERTAKES A SUBSTANTIAL EXPA NSION. THE ISSUE RELATING TO SUBSTANTIAL EXPANSION HAS NOT BEE N DISPUTED BY THE ASSESSING OFFICER. HOWEVER, SUB-SEC (2) FURTHE R REQUIRES THAT DEDUCTION IS AVAILABLE ONLY TO SUCH UNDERTAKING WHI CH BEGINS TO MANUFACTURE OR PRODUCE ANY ARTICLE OR THING WHICH A RE NOT MENTIONED IN SCHEDULE XIII, PART B. THUS IT IS CLEA R AS OBSERVED BY THE LD. CIT(A) THE DEDUCTION IS NOT DENIED ON A PAR TICULAR TYPE OF MILL BUT IT IS DENIED ON A PARTICULAR TYPE OF ARTIC LE OR THING WHICH IS MENTIONED THEREIN. IT SHOULD BE EMPHASIZED THAT PA RT B OF SCHEDULE XIII, ITEM 8 TALKS OF FLOUR MILL UNDER THE HEAD ACTIVITY OR ARTICLE OR THING BUT THAT HAS BEEN FURTHER CLARIFI ED IN THE SCHEDULE ITSELF BY WAY OF EXCISE CLASSIFICATION AS WELL AS S UB-CLAUSE UNDER NATIONAL INDUSTRIES CLASSIFICATION (N.I.C) 1998. T HE LD. CIT(A) HAS FURTHER OBSERVED THAT CENTRAL EXCISE TARIFF CLASSIF ICATION CODE 11.01 OF CENTRAL EXCISE ACT MAKES IT CLEAR THAT IT IS A B ROAD HEADING WHICH COVERS VARIOUS PRODUCTS OF THE MILLING INDUST RY. FURTHER N.I.C. 1998 GIVES VARIOUS CATEGORIES OF PRODUCTS UN DER VARIOUS HEADS KNOWN AS DIVISIONS. DIVISION 15 READS AS U NDER: DIVISION 15 MANUFACTURE OF FOOD PRODUCTS OF BREWAGES 15311 FLOUR MILLING THIS CLASSIFICATION UNDER VARIOUS NIC STANDARDS HAS BEEN ISSUED BY MINISTRY OF STATISTICS AND PROGRAMME IMPLEMENTAT ION, GOVERNMENT OF INDIA. CODE 15311 HAS BEEN MENTIONED IN PART B OF SCHEDULE XIII AT COL. 8. SINCE THIS DIVISION PERTA IN TO FOOD AND BREWAGES AND ONLY ONE ITEM IN RESPECT OF FLOUR MIL LING IS THERE, IT BECOMES CLEAR THAT THE PARLIAMENT WAS CLEAR IN ITS INTENTION THAT ACTIVITY OF FLOUR MILLING WOULD NOT BE ENTITLED TO DEDUCTION U/S 80IC AND THAT IS WHY THE SAME HAS BEEN PLACED IN SCHEDUL E XIII ALONG WITH EXCISE CLASSIFICATION CODE 11.01 AS WELL AS NA TIONAL INDUSTRIES CLASSIFICATION UNDER DIVISION 15 AT SL N O. 15311. THEREFORE, THE ACTIVITY OF FLOUR MILLING OR ARTICL E OR THING UNDER WHICH CAN BE CALLED FLOUR IS NOT ELIGIBLE FOR DED UCTION U/S 80IC BY VIRTUE OF ITS ENTRY IN THE NEGATIVE LIST IN PART B OF SCHEDULE XIII. 10 THE LD. COUNSEL OF THE ASSESSEE THOUGH ARGUED T HAT THIS ITEM SHOULD BE INTERPRETED ON THE BASIS OF A TRADE NAME BUT NO TRADE JOURNAL OR ANY OTHER MATERIAL WAS PRODUCED TO SHOW THAT IN THE TRADE PARLANCE FLOUR MILL IS DISTINCT FROM R OLLER FLOUR MILL. IN ANY CASE THE ASSESSEE ITSELF HAS BEEN SHOWN TO B E RUNNING A FLOUR MILL AS PER THE TAX AUDIT REPORT (COPY OF WHI CH IS AVAILABLE AT PG 12 TO 20 AT SL NO. 8 WHICH DEALS WITH THE NAT URE OF BUSINESS, THE SAME HAS BEEN SHOWN AS FLOUR MILL. 11 WE HAVE ALSO PERUSED PAGE 25 OF THE PAPER BOOK W HICH IS AN ANNEXURE GIVING QUANTITATIVE DETAILS OF PRINCIPLE I TEMS OF RAW MATERIAL AND FINISHED PRODUCTS HAS BEEN FOLLOWED. ANNEXURE IV QUANTITATIVE DETAILS OF PRINCIPAL ITEMS OF RAW MATE RIAL ITEM WHEAT (IN QTLS) OPENING STOCK 14345.66 PURCHASES DURING THE PREVIOUS YEAR 140348.50 CONSUMPTION DURING THE PREVIOUS YEAR 149102.62 6 SALES DURING THE PREVIOUS YEAR NIL CLOSING STOCK 5591.54 YIELD OF FINISHED PRODUCTS FLOUR 118746 MAIDA/ SUZI 16984. 45 CHOKER 16586.46 %AGE OF YIELD 79.64% 11.39% 11.12% SHORTAGE/EXCESS, IF ANY PROCESS GAIN(QTLS) = (3214.29) 2.15% FROM THE ABOVE IT IS CLEAR THAT PRINCIPLE ACTIVITIE S REMAIN MILLING OF FLOUR AND 79.64% WHEAT CRUSHED RESULTS INTO MILLING OF FLOUR AND MAIDA AND SUZI IS ONLY AT 11.39% WHICH CAN BE CALLE D AS BI- PRODUCT. THUS IT IS CLEAR THAT MAIN ACTIVITY OF TH E ASSESSEE IS MILLING AND BY DOING THE ACTIVITY LISTED IN THE NEG ATIVE LIST IN PART B OF SCHEDULE XIII, DEDUCTION U/S 80IC, IS NOT AVAILA BLE. 12 THE LD. COUNSEL OF THE ASSESSEE HAD PUT UP LOT O F STRESS ON THE CLARIFICATION OF LEGAL EXEMPTION GRANTED BY THE GOVERNMENT OF HIMACHAL PRADESH. RELEVANT LETTER IS EXTRACTED BEL OW: IND(A)(F)6-16/94 GOVERNMENT OF HIMACHAL PRADESH INDUSTRIES DEPARTMENT THE D.C-CUM-SECRETARY (INDUSTRIES) TO THE GOVERNMENT OF HIMACHAL PRADESH TO THE DIRECTOR OF INDUSTRIES HIMACHAL PRADESH, SHIMLA-1 DATED, SHIMLA-2 1.7.1994 JUNE 1994 SUB: SALES TAX EXEMPTION TO ROLLER FLOUR MILLS, CLARIFICATION THEREOF SIR, I AM DIRECTED TO REPLY TO YOUR LETTER NO. IN/DEV., F.19-18/91-IB DATED 20.4.94 IN THE ABOVE CITED SUBJECT AND TO SAY THAT THE MATTER HAS BEEN EXAMINED IN CONSULTATION WITH LAW DEPARTME NT. ACCORDING TO RULE 11.1 (D) OF THE REVISED RULES REG ARDING GRANT OF INCENTIVES TO INDUSTRIAL UNITS IN HIMACHAL PRADESH, ALL INDUSTRIAL UNITS RE ELIGIBLE FOR SALES TAX INCENTIVES WHICH AR E REGISTERED AS APPELLATE AUTHORITY DEALER UNDER THE H.P. GENERAL S ALES TAX ACT, 1968/CENTRAL SALES TAX ACT, 1956 AND COMPLY WITH IT S PROVISIONS, EXCEPT FOR THE INDUSTRIES NOTIFIED IN ANNEXURE-III OR AS NOTIFIED BY THE STATE GOVERNMENT FROM TIME TO TIME. ACCORDING TO SL NO. 1 OF ANNEXURE III OF THE SAID RULES, FLOUR MILLS ARE NOT ELIGIBLE FOR SALES TAX INCENTIVES. IN OTHER WORDS, THE ROLLER FLOUR M ILLS ARE NOT COVERED UNDER SL NO. 1 OF ANNEXURE III AND HENCE AR E ELIGIBLE FOR SALES TAX INCENTIVES SUBJECT TO FULFILLMENT OF OTHE R REQUIREMENTS. YOURS FAITHFULLY SD/- JOINT SECRETARY (INDUSTRIES) TO THE GOVERNMENT OF HIMACHAL PRADESH 7 IN OUR OPINION, THE LD. CIT(A) HAS CORRECTLY BRUSHE D ASIDE THIS CLARIFICATION BECAUSE IT DEALS WITH THE SALES TAX E TC. WHICH IS A STATE SUBJECT AND THIS CLARIFICATION CAN NOT NEGATE S THE INTENTION OF THE PARLIAMENT GIVEN IN PART B OF SCHEDULE XIII WHI CH IS A NEGATIVE LIST FOR DEDUCTION U/S 80IC. IN THESE CIRCUMSTANCE S, WE ARE OF THE OPINION THAT THE ASSESSEE BY VIRTUE OF BEING PLACED IN PART B OF SCHEDULE XIII, IS NOT ENTITLED TO DEDUCTION U/S 80I C. THE ASSESSING OFFICER HAS BEEN MORE THAN REASONABLE FOR GRANTING DEDUCTION U/S 80IB @ 25%. IN THESE CIRCUMSTANCES W E FIND NOTHING WRONG WITH THE ORDER OF LD. CIT(A) AND CONF IRM THE SAME. 10 WE FURTHER FIND THAT THIS MATTER WAS TAKEN BEFOR E THE HON'BLE HIMACHAL PRADESH HIGH COURT IN CASE OF POOJA INDUST IRES IN ITA NO. 4001 OF 2013 AND THE SAME WAS DISMISSED EVEN BY THE HON'BLE HIGH COURT VIDE ORDER DATED 27.6.2013 VIDE PARA 3 W HICH READS AS UNDER: IT IS NOT THE CASE OF THE APPELLANT THAT UNDER THE PROVISIONS OF INCOME-TAX ACT APPROPRIATE AUTHORITY HAS MADE DISTI NCTION BETWEEN ROLLER FLOUR MILLS AND FLOUR MILLS/RICE MILLS. AS SUCH, IN ABSENCE THEREOF, WE FIND NO REASON TO DIFFER FROM THE OPIN ION RECORDED BY THE TRIBUNAL IN PARA 12 THAT THE CIRCULAR PRESSED I NTO SERVICE BY THE APPELLANT, WILL BE OF NO AVAIL TO THE APPELLANT . HENCE, DISMISSED. AT THIS STAGE WE MAY OBSERVE THAT ADDITIONAL EVIDEN CE FILED GIVES DETAILS OF THE MACHINERY FOR ROLLER FLOUR MILL AND FLOUR MILL BUT WE DO NOT FIND MUCH DIFFERENCE IN THE SAME AND IN ANY CASE THE SAME IS OF ACADEMIC NATURE BECAUSE THE ASSESSEE HAS NOT SHOWN ANY DOCUMENTARY EVIDENCE BEFORE THE LOWER AUTHORITIES TO PROVE WHICH MACHINES HAVE BEEN INSTALLED FOR UPGRADATION. WE F URTHER FIND THAT IN CASE OF UNION OF INDIA AND OTHERS V. GARWARE NYL ONS LTD. ETC (SUPRA) HAS OBSERVED AT PARA 10 AS UNDER: THERE ARE INNUMERABLE DECISIONS OF THIS COURT WHIC H HAVE LAID DOWN THE TEST OR THE PRINCIPLES TO BE BORNE IN MIND IN CONSTRUING THE ITEMS OR ENTRIES IN FISCAL STATUTES. IN RECENT DECISION IN INDIAN CABLE COMPANY LTD. CALCUTTA VS.. COLLECTOR OF CENTR AL EXCISE, CALCUTTA AND OTHERS (1994) 6 SCC 610 AT PAGE 615) A THREE MEMBER BENCH STATED THE LAW THUS: ..IN CONSTRUING THE RELEVANT ITEM OR ENTRY, IN FISCAL STATUTES, IF IT IS ONE OF EVERY DAY USE, THE AUTHOR ITY CONCERNED MUST NORMALLY CONSTRUE IT, AS TO HOWEVER, IT IS UNDERSTOOD IN COMMON PARLANCE OR IN THE COMMERCIAL WORLD OR TRADE CIRCLES. IT MUST BE GIVEN ITS POPULAR MEA NING. THE MEANING GIVEN IN THE DICTIONARY MUST NOT PREVAIL. NO SHOULD THE ENTRY BE UNDERSTOOD IN ANY TECHNICAL OR BOTANIC AL OR SCIENTIFIC SENSE. IN THE CASE OR TECHNICAL WORDS, IT MAY CALL FOR A DIFFERENT APPROACH. THE APPROACH TO BE MADE IN SUCH CASES HAS BEEN STATED BY LORD ESHER IN UNWIN V. HAN SON THUS: IF THE ACT IS DIRECTED TO DEAL WITH MATTERS AFFEC TING EVERYBODY GENERALLY, THE WORDS USED HAVE THE MEANIN G ATTACHED TO THEM IN THE COMMON AND ORDINARY USE OF LANGUAGE. IF THE ACT IS ONE PASSED WITH REFERENCE TO A PARTICULAR TRADE, BUSINESS OR TRANSACTION AND WORDS ARE USED WHICH EVERYBODY CONVERSANT WITH THAT TRADE, BUSINES S OR TRANSACTION KNOWS AND UNDERSTANDS TO HAVE A PARTICU LAR MEANING IN IT THEN THE WORD A RE TO BE CONSTRUED AS HAVING THAT PARTICULAR MEANING, THOUGH IT MAY DIFFER FROM THE COMMON OR ORDINARY MEANING OF THE WORDS. 8 WE HAVE NO QUARREL WITH THE ABOVE OBSERVATION BUT W E ARE OF THE OPINION THAT EVEN IN THE TRADE ROLLER FLOUR MILL AN D FLOUR MILL IS UNDERSTOOD AS ONE AND SAME AND IN ANY CASE AS OBSER VED IN CASE OF POOJA INDUSTRIES (SUPRA) THERE IS NO MATERIAL BE FORE US TO REACH A DIFFERENT CONCLUSION. IN VIEW OF THIS DETAILED D ISCUSSION WE FIND NOTHING WRONG IN THE ORDER OF THE LD. CIT(A) AND WE CONFIRM THE IMPUGNED ORDER. FOLLOWING THE ABOVE ORDER, WE DECIDE THE ISSUE AGAI NST THE ASSESSEE. 6 IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 11.7.2014 SD/- SD/- (SUSHMA CHOWLA) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 11.7.2014 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/THE DR