SHRI DHEERAJ KHATRI , ABOHAR V. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-II, BATHINDA

ITA 352/ASR/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 2794 (ITAT-AMRITSAR)
• Duration Of Justice: 3 year(s) 4 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 31-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S M SURENDRANATH
• Keywords: Capital asset; Depreciation; Business expenditure; Search and seizure; Advance ruling
• Section: 143(3); 11A; 80IB; 143(1); 201; 251; 113; 13; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIB UNAL AMRITSAR BENCH: AMRITSAR BEFORE SHRI LALIET KUMAR, JUDICIAL MEMBER AND DR. MITHA LAL MEENA, ACCOUNTANT MEMBER I.T.A NOS. 351 & 352/ASR/2018 (ASSESSMENT YEARS: 2014-15 & 2013-14) SH. DHEERAJ KHATRI COLLEGE ROAD, OPPOSITE PETROL PUMP, ABOHAR [PAN:AJYPK7240F] (ASSESSEE) VS. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-2, BATHINDA (REVENUE) ASSESSEE BY SH. SUDHIR SEHGAL, ADV. REVENUE BY SH. S. M. SURENDRANATH, D. R. DATE OF HEARING 20.09.2021 DATE OF PRONOUNCEMENT 14.10.2021 ORDER PER LALIET KUMAR, JM: THESE PRESENT APPEALS FILED BY THE ASSESSEE FEELING AGGRIEVED BY THE ORDER OF LD. CIT(A),BATHINDA DATED 21.03.2018, FOR A.YS. 201 4-15 AND 2013-14. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL IN ITA NO. 351/ASR/2018 1. THAT THE LD. CIT(A), BATHINDA HAS ERRED IN DENY ING THE BENEFIT OF DEDUCTION U/S 80- IB(11 A) OF THE INCOME TAX ACT, 1961 (THE ACT) TO THE ASSE SSEE ON ACCOUNT OF ACTIVITY OF PROCESSING, PRESERVATION & PACKAGING OF FRUITS CARRIED OUT BY T HE APPELLANT. I.T.A NOS. 351 & 352/ASR/2018 2 2. THAT THE CIT (A), BATHINDA HAS ERRED IN CONCLUDING THAT THE APPELLANT IS ENGAGED IN MANUFACTURING/RE-PROCESSING OF THE ALREADY PROCESSE D INGREDIENTS & HENCE NOT ELIGIBLE FOR DEDUCTION U/S 80-IB(11 A) OF THE ACT. 3.A) THAT THE LD. CIT (A), BATHINDA HAS GIVEN OTHER WISE ERRED IN ENHANCING THE DISALLOWANCE OF DEDUCTION U/S 80IB(11 A) BY 50% OF THE TOTAL DED UCTION ORIGINALLY CLAIMED BY THE APPELLANT TO 100% OF THE SAID DEDUCTION. 3.B) THAT THE ENHANCEMENT BY THE LD. CIT(A) IS AGAI NST THE FACTS AND CIRCUMSTANCES OF THECASE AND EVEN THERE IS NO PROPER SATISFACTION RECORDED B Y THE CIT(A) BEFORE MAKING THE ENHANCEMENT. 4. THAT THE LD. CIT(A), BATHINDA HAS GROSSLY ERRED IN IGNORING THE CLARIFICATION AS OBTAINED UNDER RTI, ISSUED BY THE MINISTRY OF FOOD PROCESSIN G INDUSTRIES, NEW DELHI AS WELL AS REGISTRATION OF THE APPELLANT UNDER PUNJAB VAT ACT, 2005 AND EXCISE AUTHORITIES AND, THUS, CREATING AN ARTIFICIAL DISTINCTION TO DENY TH E BENEFIT OF DEDUCTION U/S 80-IB (11 A). 5. THAT THE CIT(A), BATHINDA HAS FAILED TO APPRECIATE THAT THE UNIT OF THE ASSESSEE IS SUBJECTED TO EXCISE DUTY AND VAT AND THEY HAVE RECO GNIZED THAT THE ASSESSEE IS ENGAGED IN MANUFACTURE AND PROCESSING OF AAM PAPAD AND E MLI PAPAD. 6. THAT THE FINDING OFTHE LD. CIT(A)IS CONTRADICTORY I N THE SENSE THAT ON ONE HAND,CIT(A) DENIED THE DEDUCTION U/S 80IB(11 A) AND ON THE OTHE R HAND, HE HAS MENTIONED IN PARA-1, AT PAGE 12, OF THE ORDER, THAT THE ACTIVITY OF THE APPELLANT I.E. PROCESSING, PRESERVATION AND PACKAGING OF FRUITS AS PRESCRIBED IN THE PROVISION OF 80-IB, BUT THE VOLUME OF THIS ACTIVITY IS VERY SMALL AND NEGLIGIBLE AND THEREFORE, CANNOT BE GIVEN THE BENEFIT THAT THE APPELLANT IS ENGAGED IN SUCH ACTIVITY AS TO HIS MAIN ACTIVITY. 7.A) THE DISALLOWANCE OFDEDUCTION U/S80IB IS B AD IN LAW SINCE THE CIT (A) HAS FAILED TOAPPRECIATE THE FACTTHAT DIFFERENTCOMPONENTS ARE M IXED TOGETHER AND AFTER GOINGTHROUGH THE PROCESS ON ALL TOGETHERNEW PRODUCT I.E. DIFFERE NT KINDS OF AAM PAPAD ISPRODUCED. 7.B) THE FINDING OF THE CIT (A) THAT TAMARIND HAVIN G BEEN SEPARATED FROM ITS KERNELS AND ITTRANSPORTED IN PROCESSED AND PRESERVED CONDITION AND DOES NOT REQUIRE ANY ACTIVITY ON THIS SHAPE, IS WHOLLY UNFOUNDED AND AGAINST THE FAC TS AND CIRCUMSTANCES OF THE CASE. 1. THAT THE LD. CIT (A), BATHINDA HAS ALSO ERRED IN NO T CONSIDERING THAT THE EARLIER ASSESSMENTS FOR A.Y. 2010-11 & 2012-13 HAVE BEEN CO MPLETED U/S 143(3) OF THE INCOME TAX ACT, 1961 AND, THE DEPARTMENT HAS ALREADY ALLOW ED THE DEDUCTION U/S 80IB(11 A) IN EARLIER YEARS. I.T.A NOS. 351 & 352/ASR/2018 3 2. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROUNDS OF APPEAL BEFORE THE APPEAL IS FINALLY HEARD OR DISPOSED OFF. 3. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL IN ITA NO. 352/ASR/2018 1. THAT THE LD. CIT(A), BATHINDA HAS ERRED IN DENY ING THE BENEFIT OF DEDUCTION U/S 80- IB(11 A) OF THE INCOME TAX ACT, 1961 (THE ACT) TO THE ASSESSEE ON ACCOUNT OF ACTIVITY OF PROCESSING, PRESERVATION & PACKAGING OF FRUITS C ARRIED OUT BY THE APPELLANT. 3. THAT THE CIT (A), BATHINDA HAS ERRED IN CONCLUDING THAT THE APPELLANT IS ENGAGED IN MANUFACTURING/RE-PROCESSING OF THE ALREADY PROCESSE D INGREDIENTS & HENCE NOT ELIGIBLE FOR DEDUCTION U/S 80-IB(11 A) OF THE ACT. 3.A) THAT THE LD. CIT (A), BATHINDA HAS GIVEN OTHER WISE ERRED IN ENHANCING THE DISALLOWANCE OF DEDUCTION U/S 80IB(11 A) BY 56% OF THE TOTAL DED UCTION ORIGINALLY CLAIMED BY THE APPELLANT TO 100% OF THE SAID DEDUCTION. 3.B) THAT THE ENHANCEMENT BY THE LD. CIT(A) IS AGAI NST THE FACTS AND CIRCUMSTANCES OF THE CASE AND EVEN THERE IS NO PROPER SATISFACTION RECOR DED BY THE CIT(A) BEFORE MAKING THE ENHANCEMENT. 4. THAT THE LD. CIT(A), BATHINDA HAS GROSSLY ERRED IN IGNORING THE CLARIFICATION AS OBTAINED UNDER RTI, ISSUED BY THE MINISTRY OF FOOD PROCESSIN G INDUSTRIES, NEW DELHI AS WELL AS REGISTRATION OF THE APPELLANT UNDER PUNJAB VAT ACT, 2005 AND EXCISE AUTHORITIES AND, THUS, CREATING AN ARTIFICIAL DISTINCTION TO DENY TH E BENEFIT OF DEDUCTION U/S 80-IB (11 A). 5. THAT THE CIT(A), BATHINDA HAS FAILED TO APPRECIATE THAT THE UNIT OF THE ASSESSEE IS SUBJECTED TO EXCISE DUTY AND VAT AND THEY HAVE RECOGNIZED THA T THE ASSESSEE IS ENGAGED IN MANUFACTURE AND PROCESSING OF AAM PAPAD AND EMLI PAPAD. 6. THAT THE FINDING OF THE LD. CIT(A) IS CONTRADICTORY IN THE SENSE THAT ON ONE HAND, CIT(A) DENIED THE DEDUCTION U/S 80IB(11 A) AND ON THE OTHE R HAND, HE HAS MENTIONED IN PARA-1, AT PAGE 12, OF THE ORDER, THAT THE ACTIVITY OF THE APP ELLANT I.E. PROCESSING, PRESERVATION AND PACKAGING OF FRUITS AS PRESCRIBED IN THE PROVISION OF 80-IB, BUT THE VOLUME OF THIS ACTIVITY IS VERY SMALL AND NEGLIGIBLE AND THEREFORE, CANNOT BE GIVEN THE BENEFIT THAT THE APPELLANT IS ENGAGED IN SUCH ACTIVITY AS TO HIS MAIN ACTIVITY. I.T.A NOS. 351 & 352/ASR/2018 4 7.A) THE DISALLOWANCE OF DEDUCTION U/S 80IB IS BAD IN LAW SINCE THE CIT (A) HAS FAILED TO APPRECIATE THE FACT THAT DIFFERENT COMPONENTS ARE M IXED TOGETHER AND AFTER GOING THROUGH THE PROCESS ON ALL TOGETHER NEW PRODUCT I.E. DIFFER ENT KINDS OF AAM PAPAD IS PRODUCED. 7.B) THE FINDING OF THE CIT (A) THAT TAMARIND HAVIN G BEEN SEPARATED FROM ITS KERNELS AND IT TRANSPORTED IN PROCESSED AND PRESERVED CONDITION AN D DOES NOT REQUIRE ANY ACTIVITY ON THIS SHAPE, IS WHOLLY UNFOUNDED AND AGAINST THE FACTS AN D CIRCUMSTANCES OF THE CASE. 8. THAT THE LD. CIT (A), BATHINDA HAS ALSO ERRED IN NOT CONSIDERING THAT THE EARLIER ASSESSMENTS FOR A.Y. 2010-11 & 2012-13 HAVE BEEN CO MPLETED U/S 143(3) OF THE INCOME TAX ACT, 1961 AND, THE DEPARTMENT HAS ALREADY ALLOW ED THE DEDUCTION U/S 80IB(11A) IN EARLIER YEARS. 9A). THAT THE LD. CIT(A), BATHINDA HAS ERRED IN CON FIRMING THE DISALLOWANCE OF INTEREST EXPENDITURE OF RS. 1,05,173/- AS CLAIMED BY THE APP ELLANT U/S 24 OF THE ACT AND, THUS, DISALLOWING THE LOSS CLAIMED UNDER THE HEAD INCOME FROM HOUSE PROPERTY. 9.B) WITHOUT PREJUDICE TO ABOVE GROUND, THE LD. CIT (A) BATHINDA HAS EVEN OTHERWISE ERRED IN NOT CONSIDERING THE FACT THAT THE SAID INTERST EXPE NDITURE WAS EVEN OTHERWISE ALLOWANBLE AS BUSINESS EXPENDITURE U/S 36(1)(III) OF THE ACT. 3. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROUNDS OF APPEAL BEFORE THE APPEAL IS FINALLY HEARD OR DISPOSED OFF. BRIEF FACTS : 4. LD AR HAD ALSO FILLED THE WRITTEN SUBMISSIONS IN SU PPORT OF ITS CASE AND LD AR HAD MADE ELOBRATEARGUMENTS . IN THE WS IT WAS SU BMITTED AS UNDER :- (A. THE APPELLANT IS AN INDIVIDUAL ENGAGED IN THE ACTIV ITY OF FRUIT PROCESSING WHICH PRIMARILY INVOLVES THE SERIES OF ACTIONS TO CONVERT THE RAW M ATERIAL INTO FINISHED PRODUCT, AND IN THE COURSE OF SUCH PROCESSING ACTIVITY, CERTAIN VAL UE ADDITION IS MADE BASIC RAW MATERIAL LIKE MANGO, MANGO PULP AND IMLI. THE ULTIMATE PRODU CT WHICH COMES INTO EXISTENCE IS AAM PAPAD/MANGO SLICE OR IMLI PAPAD, IS A NEW ET DI STINCT PRODUCT, DEFINITELY SEPARATE AND DISTINCT FROM THE RAW MATERIALS. (B. THE ACTIVITY OF THE APPELLANT ARE COVERED UNDER FRU ITS ET VEGETABLES PROCESSING AND FALLS UNDER THE SCHEME OF CREATION/EXPANSION OF FOOD PROC ESSING AND PRESERVATION CAPACITIES AS LAUNCHED BY MINISTRY OF FOOD PROCESSING INDUSTRI ES, COPY OF LETTER FROM MINISTRY OF FOOD PROCESSING INDUSTRY IS PLACED AT PAGE NO. 118 OF THE PAPER BOOK. I.T.A NOS. 351 & 352/ASR/2018 5 (C. THE APPELLANT DULY HOLDS LICENSE UNDER FOOD SAFETY ET STANDARDS ACT 2006 FOR MANUFACTURING OF AAM PAPAD/IMLI PAPAD, COPY OF THE LICENSE IS PLACED AT PAGE NO. 62 TO 65 OF THE PAPER BOOK. (D. THE APPELLANT COMMENCED THIS BUSINESS OF PROCESSING , PRESERVATION AND PACKAGING OF FRUITS AND VEGETABLE BY PROCESSING MANGO/MANGO PULP INTO T HE `AAM PAPAD' ON 30.11.2009 AND IS CLAIMING DEDUCTION U/S 80IB(11A) OF THE INCOME TAX ACT, 1961 (`THE ACT') SINCE ASSESSMENT YEAR 2010-11 AND THE DEDUCTION CLAIMED BY THE APPELLANT IN AY 2010-1 1 HAS BEEN ALLOWED BY DEPARTMENT BY FRAMING ASSESSMENT UNDER S ECTION 143(3) OF THE ACT AND HAS ATTAINED FINALITY. (E. THE PRESENT APPEAL IS IN RESPECT OF TWO ASSESSMENT YEARS I.E., 2013-14 ET 2014-15 WHEREIN THE DEDUCTION CLAIMED BY THE APPELLANT WAS PARTLY D ISALLOWED TO THE TUNE OF 60% AND 50% RESPECTIVELY BY THE ASSESSING OFFICER VIDE ORDERS D ATED 22.02.2016 AND 20.12.2016 AFTER ROUGHLY CALCULATING THE RATIO OF RAW MATERIALS UTIL IZED BY THE APPELLANT IN FORM OF RAW MANGOES, MANGO PULP AND IMLI. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE APPELLANT WAS ELIGIBLE FOR DEDUCTION IN RESPECT OF PROFITS EARNED FROM MANUFACTURING OF AAM PAPAD BY USING RAW MANGO AND NOT FOR THE PORTION OF PROFITS EARNED FROM MANUFACTURING OF AAM PAPAD BY USING MANGO PULP. THE DEDUCTION WAS PARTIALLY DENIED SINCE THE ASSESSING OFFICER DENIED TO ACCEPT THE NATURE OF MANGO PULP AS 'FRUIT'. THE RAW MATERIAL IMLI WAS NEVER COMMENTED UPON WHET HER IT IS FRUIT OR NOT. THE ESTIMATED PERCENTAGES OF DISALLOWANCE AS MENTIONED ABOVE, WERE CALCULATED AS THERE WERE NO SEPARATE BOOKS OF ACCOUNTS FOR CALCULATING EXACT PROFIT FROM USING EACH OF RAW MATERIAL. THE OBSERVATION OF ASSESSING OFFICER WAS THAT THE A PPELLANT IS UNDOUBTEDLY ENGAGED IN PROCESSING OF FRUIT AND IS ELIGIBLE FOR DEDUCTION U /S 80-IB BUT MANGO PULP CANNOT BE CONSIDERED AS 'FRUIT'. THE APPELLANT FILED AN APPEAL BEFORE WORTHY CIT(A), BATHINDA AGAINST BOTH THE ASSESSMENT ORDERS. (F. DURING THE FIRST APPELLATE PROCEEDINGS, DETAILED SU BMISSIONS AND CLARIFICATIONS ALONG WITH THE SUPPORTING DOCUMENTS WERE FILED BEFORE WOR THY CIT(A) ESTABLISHING THE CONTENTION OF THE APPELLANT THAT THE PROFITS EARNED WERE DULY ELIGIBLE FOR DEDUCTION U/S 80IB(11A) OF THE ACT. IT WAS STATED THAT IMLI FRUIT PRODUCT HAS BEEN IGNORED BY THE LEARNED AO AS OVER 60% OF IMLI IS USED FOR PROCESSI NG. HOWEVER, THE SAME WERE DISREGARDED BY THE WORTHY CIT(A). THE WORTHY CIT (A ) HELD THAT IMLI FRUIT WHEN PLUCKED FROM TREE AND POD IS BROKEN IT GETS PROCESS ED. WHEN DRIED IN AIR , IT GETS PRESERVED AND WHEN TRANSPORTED IN BAGS IT IS SAID PACKING. THE DENIAL OF ENTIRE DEDUCTION WAS LABELED AS PROCESSING OF PROCESSED FR UITS. APPARENTLY SUBJECT EXPERTISE IS LACKING IN THE APPELLATE ORDER. (G. THE ORDER OF THE CIT(A) DOES NOT SUSTAIN THE BASICS OF ACCORDING TO LAW. THE LEGISLATURE HAS NOT INTENDED TO OPEN DECISIONS ALREADY MADE IN EARLIER PROCEEDINGS BECAUSE THIS AMOUNTS TO POWER OF REVIEW IN THE HANDS OF ASSESSIN G AUTHORITIES DEPENDING UPON THEIR CHANGING MOODS. THIS IS NOT THE CASE WHERE THE ISSU E WAS NOT DISCUSSED OR DISCLOSED. THIS IS THE CASE WHERE THE ASSESSING OFFICERS IN TH E PAST AS WELL PRESENT AO HAVE DIFFERENT VIEWS. HE HAS TOUCHED THE MATTER WHICH WA S CONSIDERED AND DECIDED BY VARIOUS AO'S. THE VIEW TAKEN BY CIT(A) IS NOT GUIDE D BY ANY JUDICIAL AUTHORITY, I.T.A NOS. 351 & 352/ASR/2018 6 SCIENTIFICALLY TESTED OR BASED ON ANY CASE LAW BUT HIS PERSONAL VIEWS BASED ON ASSUMPTIONS AND SURMISES AND WITHOUT ANY RATIONALE. THERE ARE OBSERVATIONS AND CONCLUSIONS THAT ARE NOT TRUE TO THE FACTS. (H. SECTION 80 IB(11A) OF THE INCOME TAX ACT DOES NOT EMPHATICALLY STIPULATE THAT THE PROCESSING SHOULD BE IN SUCH A MANNER THAT NO ADDIT IVE /OTHER INGREDIENT ARE USED IN THE PROCESS AND THE FRUIT SHOULD MAINTAIN ITS ORIGINALI TY THROUGHOUT THE ACTIVITY OF PROCESSING, PRESERVATION AND PACKING. SUB SECTION 11A SPECIFIES THE PERCENTAGE AND THE PERIOD OF DEDUCTION OF BUSINESS PROFIT DERIVED BY THE UNDERTA KING FROM THE BUSINESS OF PROCESSING, PRESERVATION AND PACKAGING OF FRUITS AND VEGETABLES . THE TERM BUSINESS IS OF VAST AMPLITUDE AND THE ACTIVITY OF PROCESSING IN ITSELF INCORPORATE VARIOUS FACETS OF PROCESSING, CONVENTIONAL AS WELL AS CONTEMPORARY, AND TRADITION AL AS WELL AS INNOVATIVE. (I. WHEN A FRUIT IS PROCESSED WITH REQUIRED ADDITIVES A ND OTHER INGREDIENTS SO AS TO BE PRESERVED IN A DEHYDRATED FORM, IT IS BOUND TO CHAN GE THE CONTOUR. SHAPES AND CUTS ARE MADE FOR COMPATIBILITY TO THE PACKING TO RETAIN THE PRESERVATION AND SUITABILITY TO THE MARKETING OF THE COMMODITY EME - GING AFTER PROCESSING. AAM PAPAD (MANGO BASED), IMTIPRODUCTS(TAMARIND BASED) AND BLENDED ( MIX OF MANGO AND TAMARIND) ARE ALL POPULARLY KNOWN IN TRADE AND AMONG THE CONS UMERS BY THE FRUIT CONTENT THEY CARRY IN ITS RESPECTIVE CONSTITUTED FORM. THE BASIC PROPERTIES OF THE FRUIT ARE MAINTAINED IN THE PRODUCTS, AS WELL FELT BY TASTE. TRANSFORMATION OF THE ORIGINAL FRUIT PULP ( OF MANGO AND IMLI ) TO A NEW LOOK / SHAPE HA PPENS IN THE PROCESS WHEN BOTH ARE PROCESSED WITH ADDITIVES / OTHER INGREDIENTS. (J. ELIGIBILITY TO SUB SECTION (1 IA) OF SECTION 80 IB OF THE INCOME TAX ACT FLOWS FROM SUB SECTION ( 1 ) AND (2). SUB SECTION (1) MENTIONS ABO UT THE SUB SECTIONS OF VARIOUS ELIGIBLE BUSINESSES AND PROFITS TO BE CONSIDERED FO R DEDUCTION FROM THE GROSS TOTAL INCOME; AND SUB SECTION (2) LAYS DOWN THE CONDITION S TO BE FULFILLED BY THE INDUSTRIAL UNDERTAKING IN ORDER TO AVAIL THE BENEFIT OF DEDUCT ION OF PROFITS AND GAINS FROM THE BUSINESSES REFERRED TO IN SUB-SECTION (3) TO (11), (11A) AND (11B). (K. THE APPELLANT HAS ALSO FULFILLED ALL THE CONDITIONS LAID DOWN IN SUB SECTION (2), WHICH AT ITS CLAUSE -(III) SPECIFIES:- IT MANUFACTURES OR PRODUCES ANY ARTICLE OR THING , SO IS ENTITLED TO THE TAX BENEFIT UNDER SECTION (11A) OF SECTION 80 IB OF THE INCOME TAX ACT. (L. THE LD. CIT (A) HAS GIVEN THE REASON FOR REFUSAL AS LARGE CONTENT OF SUGAR ( 43.56 % IN WEIGHT) IN THE PRODUCT AS THE OTHER REASON FOR NON ELIGIBILITY OF THE APPELLANT TO THE TAX BENEFIT UNDER SECTION 80 IB(11A) OF THE INCOME TAX ACT. THIS CONTENTION HAS NO FOOTING TO DENY THE ELIGIBILITY OF THE APPELLANT. D IFFERENT TYPES OF FRUIT BASED PRODUCTS (JUICES, JAMS, JELLY, FRUIT BARS, ETC HAVE DIFFERENT RATIOS OF FRU ITS AND SUGAR. TO MAKE A MENTION HERE, JAMS CONTAIN 45% FRUIT AND 55% SUGAR, AS RECOMMENDED BY THE FRUIT PROCESSING SPECIALISTS. SIMILARLY 'FRUITY' AND OTHER BRANDS OF MANGO DRINK CONTAIN APPROX 15% MANGO PULP, AND THE REST ARE WATER AND SUGAR. THERE IS NO UNIFORMITY OF RATIOS OF SUGAR ACROSS ALL TYPES OF FRUIT BASED PRODUCTS AND IT ENT IRELY DEPENDS UPON THE ART AND SCIENCE OF I.T.A NOS. 351 & 352/ASR/2018 7 FRUIT PROCESSING. SUGAR IS NOT THE PRIMARY INGREDIE NT TO PROCESS. IT IS AN ADDED INGREDIENT TO THE PROCESS ESSENTIAL TO PRESERVE. THE ESSENTIAL INGREDIENTS FOR A SUCCESSFUL PRESERVE ARE SUGAR, ACID, AND PECTIN. THESE THREE INGREDIENTS LOWER THE PH O F THE PRESERVE AND BIND AVAILABLE WATER, THUS CREATING AN ENVIRONMENT IN WHICH THE GROWTH OF MICROORGANISMS IS RETARDED. SUGAR IS ALWAYS ADDED, AND IN GENERAL ALL OF THE THREE ESSENTIAL INGREDIENTS HAVE TO BE ADDED IN ORDER TO CREATE A SUCCESSFUL PRODUCT. (M. THE CONCLUSION DRAWN BY THE LD. CIT (A) THAT THE AP PELLANT WAS MANUFACTURING ALTOGETHER NEW PRODUCT WHICH HAS A HIGH TINGE OF SUGAR ALONG-W ITH TASTES OF FRUIT AND TAMARIND IS IRRATIONAL AND BASED ON NON SCIENTIFIC PERCEPTION A ND INFLUENCED BY ASSUMPTIONS. THIS IS NOT A JUDICIOUS CONCLUSION. (N. LD. CIT (A) HAS ERRED IN GUESSING THAT THE APPELLA NT USED TAMARIND IN THE FRUIT PROCESSING ACTIVITY WHICH WAS NOT IN ITS RAW FORM. THIS IS AGAIN A MISCONCEIVED NOTION WITHOUT JUDGING THE REALITY AND KNOWING THE CONTENT S IN SUBSTANCE OF TAMARIND PURCHASED AND PUT INTO PROCESS. RAW TAMARIND PURCHA SED BY THE APPELLANT CONTAINS NON EDIBLE A.) SEED AND VEIN LIKE HARD FIBRES LIABL E TO BE REMOVED AND B.) THE EDIBLE FIBER ( COMMONLY KNOWN AS IMLIGUDDA (WHICH MEANS PULP / SOFT FLESH OF IMLI). THE PROCESS STARTS WITH THE REMOVAL OF BOTH THE ABOVE N AMED NON EDIBLE CONTENTS; AND IT IS ONLY THE SOFT FLESH OF TAMARIND WHICH ENTERED INTO THE PROCESSING AS ALSO WITH OTHER FRUITS AND BY USING ADDITIVES/ OTHER INGREDIE NTS. (O. TAMARIND PURCHASED WAS IN RAW FORM, WHICH FOR THE P URPOSE OF PROTECTION AND MOVEMENT /TRANSPORTATION IS PACKEDIN BAGS BY THE GROWERS /TR ADERS. TAMARIND PODS ARE REMOVED BY THE GROWERS / TRADERS BEFORE PACKING THE RAW TAMARI ND IN BAGS. THE ACTION OF REMOVAL OF PODS CAN NOT BE TERMED AS PROCESSING. THIS IS ACTIO N OF SEPARATING THE SHELL, JUST LIKE THE ACTION OF REMOVAL OF SHELL OF ALMONDS / PEANUTS ETC ; AND CAN NOT FALL WITHIN THE DEFINITION OF 'PROCESS'. TAMARIND PUT INTO PROCESS BY THE APPELLA NT NO WHERE STANDS AS ALREADY PROCESSED, PRESERVED AND PACKED, BECAUSE NONE OF PR OCESSING ACTIONS HAVE BE PERFORMED BY THE GROWERS / TRADERS ON THE TAMARIND SOLD, AND IN THE MANNER AND WITHIN THE DEFINITIONS AND FULFILLMENT OF CONDITION S IN SUCCESSION THEREOF AS ENVISAGED UNDER SECTION 80 18 OF THE INCOME TAX ACT. (P. THE LD. CIT HAS FURTHER RECORDED HIS VIEWS LEADING TO BASELESS OBJECTION THAT TAMARIND ONCE BECOMING TRANSPORTABLE STANDS FULLY PRESERVED AND P ACKED , AND DOES NOT REQUIRE ANY FURTHER ACTIVITY ON THIS SHAPE. WHAT KIND OF ACTIVITY AND T O WHAT PROCESS THE FRUIT SHALL PASS TO PRESERVE AND PACK WITH MARKETABLE FEATURES IS LINKE D TO THE INNOVATION OF THE ENTREPRENEUR AND FRUIT PROCESSING TECHNIQUES AND METHODS. THE PR OCESSES PERFORMED ON THIS FRUIT COMMODITY HAVE BEEN EXPLAINED DURING ASSESSMENT PRO CEEDINGS AS WELL AS IN APPELLATE PROCEEDINGS AND ALSO NARRATED HEREIN BEFORE. THE EN D PRODUCTS DERIVED FROM THE PROCESSING WELL CONTAIN THE PROCESSED AND PRESERVED TAMARIND D ULY PACKED. (Q. THE APPELLANT HAS CONSUMED IMLI FRUIT ( TAMARIND)-F RESH OF THE VALUE OF RS. 1,56,59,533.65 IN THE FRUIT PROCESSING ACTIVITY DUR ING THE ASSESSMENT YEAR 2013-14, I.T.A NOS. 351 & 352/ASR/2018 8 WHICH CONSTITUTE 60.61% OF THE TOTAL FRUIT CONSUMPT ION OF RS. 2,58,37,324.51, AS PER FLOW CHART GIVEN DURING APPELLATE PROCEEDINGS. CONS UMPTION OF THIS RAW FRUIT ENTITLES THE APPELLANT TO CLAIM THE BENEFIT UNDER SECTION 80 18(11A) OF THE INCOME TAX ACT. (R. MANGO PULP DERIVED FROM MANGOES PURCHASED AND PROCE SSED BY THE APPELLANT AND COSTING RS. 51,14,720.00 CONSTITUTE 19.80% OF THE T OTAL FRUIT SUBSTANCE CONSUMED IN TERMS OF VALUE. THIS PULP WAS EXTRACTED BY THE APPE LLANT WITHIN OWN INDUSTRIAL UNDERTAKING. THE REAL FRUIT SUBSTANCE WHICH ENTERED THE ACTIVITY OF PROCESSING WAS PULP OF MANGO. THE APPELLANT ALSO OUTSOURCED MANGO PULP FOR THE VA LUE OF RS. 21,97,733.00, THE CONSUMPTION OF WHICH IN PROCESSING CONSTITUTED 8.50 % OF THE TOTAL CONSUMPTION OF FRUIT SUBSTANCE. THUS THE TOTAL CONSUMPTION OF MANG O PULP PUT INTO PROCESS WAS 28.30% OF THE TOTAL FRUIT PROCESSED. BESIDES THE PULP OF M ANGO, THE APPELLANT ALSO CONSUMED RAW MANGOES SHEETS (SEMI DRIED) PULP OF THE VALUE O F RS. 28,65,337.23, WHICH CONSTITUTED 11.09% OF THE TOTAL CONSUMPTION OF FRUI T SUBSTANCE IN THE ACTIVITY OF PROCESSING, PRESERVATION AND PACKING OF FRUIT. (S. THE LD. CIT HAS RAISED THE ISSUE THAT SUPPLIERS OF MANGO PULP AND RAW MANGO SHEETS ARE ENGAGED IN PRESERVING OF MANGOES AND NOT THE APPELL ANT. HE HAS CONTENDED THAT MANGO PULP OUTSOURCED BY THE APPELLANT HAVING ALREADY BEE N PROCESSED AND PRESERVED, SAME WHEN AGAIN PUT INTO FURTHER PROCESS CAN NOT BE CONS IDERED AS PROCESSING OF FRUIT. IN THE CONCLUSION RECORDED BY THE LD. CIT (A) ON MANGO PUL P AT PARA 5.5.1, HE HAS ADMITTED THAT THE MANGO PULP PURCHASED BY THE APPELLANT IS A FRUIT ( MANGO), WHICH IS PROCESSED, PRESERVED AND PACKED. (T. DENIAL OF BENEFIT FOR THE BOUGHT OUT PULP IS BAD IN LAW AFTER ADMITTING THE CONTENTION OF THE APPELLANT THAT MANGO PULP IS FRUIT. NOW THE QUE STION ARISES WHETHER A FRUIT ALREADY PRESERVED CAN NOT BE CONSIDERED FOR BENEFIT UNDER S ECTION 80 IB, WHEN PUT INTO PROCESS OF THE BUSINESS OF THE APPELLANT AS FRUIT PROCESSIN G, PRESERVATION AND PACKING. FOR THE TAX BENEFIT, SCTION 80 IB ( 11A) STATES THAT : THE AMOUNT OF DEDUCTION IN A CASE OF AN UNDERTAKING DERIVING PROFIT FROM THE BUSINESS OF PROCESSING , PRESERVATION AND PACKAGING OF FRUITS OR VEGETABLES SHALL BE (SPECIFI ED PERCENTAGES OF ELIGIBLE PROFIT) (U. SECTION DOES NOT CONTAIN ANY RESTRICTION / LIMITATI ON / SPECIFIC MENTION THAT PROFITS MUST BE DERIVED FROM THE PROCESSING OF SUCH FRUIT WHICH HAS NOT BEEN PRESERVED PRIOR TO PROCESSING BY THE UNDERTAKING CLAIMING THE DEDUCTION. FRUITS A RE PRESERVED IN COLD STORAGE AND OVER A PERIOD OF NON SEASON ARE ALSO PROCESSED BY THE FRUI T PROCESSING INDUSTRY. SIMILARLY, THE PULP OF MANGO IS STORED IN COLD STORAGE AND THEN PROCESS ED TO YIELD THE PRODUCTS IN DIFFERENT FORMS. (V. TO THE EXTENT THE BUSINESS ACTIVITY IS IDENTIFIED A S FRUIT PROCESSING, THE BUSINESS PROFIT THERE FROM ARE ELIGIBLE FOR DEDUCTION UNDER SECTION 80 113 (11 A) OF THE INCOME TAX ACT. THE LAW DOES NOT NARRATE WHAT KIND OF PROCESSING SH OULD BE DONE, BUT IN SEQUENCE I.T.A NOS. 351 & 352/ASR/2018 9 SHOULD LEAD TO PRESERVATION OF THE FRUIT SUBSTANCE FOLLOWED BY PACKING THEREOF. WHEN AN ITEM IS PUT INTO PROCESS AS A FRUIT, IT IS IMMATERI AL WHAT PRE-ACTIONS HAVE ALREADY BEEN PERFORMED ON THE FRUIT. IT IS SUFFICIENT IF THE BUS INESS ACTIVITY OF THE ASSESSEE CLAIMING DEDUCTION UNDER THE ACT IS IDENTIFIED AS FRUIT PROC ESSING. (W. LD. CIT (A) HAS ALSO ERRED IN LAW BY NOT ADMITTING THE BENEFIT ALLOWABLE TO THE APPELLANT EVEN ON THE PROCESSING OF SELF EXTRACTED PULP FROM MANGOES PURCHASED STATING THAT THE VOLUME IS SMALL. NO SUCH VOLUME BASED DENIAL IS CON TAINED IN SECTION 80 IB (11 A) OF THE INCOME TAX ACT. MANGO PULP DERIVED FROM MANGOES PUR CHASED AND PROCESSED BY THE APPELLANT AND COSTING RS. 51,14,720.00 CONSTITUTE 1 9.80 % OF THE TOTAL FRUIT SUBSTANCE CONSUMED IN TERMS OF VALUE DURING AY 201314 . (X. DOING ANALYSIS OF THE CONSUMPTION OF FRUIT SUBSTANC E IN THE PROCESSING AND OTHER ADDITIVES / INGREDIENTS CONSUMED IN TERMS OF PERCENTAGE TO THE TOTAL RAW MATERIAL CONSUMPTION IN THE PROCESS IS AN II CONCEIVED NOTION. ANY SUCH CALCUL ATION MADE WITHOUT KNOWING THE GAMUT OF FRUIT PROCESSING TECHNOLOGY AND FACETS OF FRUIT PROCESSING IS A NON-EQUITABLE EXERCISE NOT CAPABLE OF FORMING AN EQUITABLE JUDGME NT. DISTINCTIVELY AND OVERALL IDENTIFICATION OF THE BUSINESS ACTIVITY OF PROCESSI NG OF FRUIT SHOULD BE MADE WITH REFERENCE TO THE COMPOSITION OF FRUIT SUBSTANCE PUT INTO PROCESS AS A BASE MATERIAL, AND NOT BY CONSIDERING OTHER NON-FRUIT ADDITIVES / INGREDIENTS ADDED TO THE BASE MATERIAL. APPARENTLY SUBJECT EXPERTISE IS LACKING I N THE APPELLATE ORDER. (Y. THE WORTHY CIT(A) DISAGREED TO THE FACT THAT THE AP PELLANT HAS UTILIZED FRUITS AND CONVERTED THE SAME INTO A CONSUMABLE FORM, THE FACT THAT FRUITS AND FRUIT DERIVATIVES AR E THE BRANCHES OF SAME TREE WAS ALSO OVERLOOKED. THE WORTHY CIT(A) IN PARA 5.5.1 ON PAGE 13 OF THE IMPUGNED ORDER, FINALLY CONCLUDED THAT THE APPELLANT IS INSTEAD ENGAGED IN REPROCESSING OF FRUITS AND IS SECOND IN CHAIN OF PROCESSING, PRESERVATION AND PACKAGING AND WITHDREW THE DEDUCTION CLAIMED, WHEREAS THE WORTHY CIT(A) COMPLETELY OVERLOOKED TH E FACT THAT THE ASSESSEE IS PROCESSING FRUITS INTO A CONSUMABLE/MAR KETABLE FORM OF MANGO AND IMLI FRUIT. THUS, IN THE IMPUGNED APPELLATE ORDER, 100% DEDUCTI ON WAS WITHDRAWN AND THE INCOME OF THE APPELLANT WAS ENHANCED. (Z. THE ABOVE CONCLUSION OF WORTHY CIT(A) IS NOT VALID AND DETAILED SUBMISSIONS IN THIS CONTEXT WERE FILED DURING THE FIRST APPELLATE PROCE EDINGS ALONG WITH THE FINANCIAL STATEMENTS (PLACED AT PAGE NO. 1 TO 61), THE FLOW CHART EXPLAINING THE MANUFACTURING PROCESS (PLACED AT PAGE NO.77 TO 78) AND ALONG WITH THE DETAILED CHART SHOWING THE INGREDIENTS USED BY THE ASSESSEE IN ITS MANUFACTURI NG PROCESS IN QUANTITATIVE FORM AND ITS PERCENTAGE OF USE (PLACED AT PAGE NO.110). THE FINAL PRODUCTS WERE SHAPED BY PROCESSING OF FRUITS (MANGO A IMLI) WITH REQUIRED ADDITIVES OF SUGAR ETC AS PER R ECIPE TO CONTROL THE TASTE AND ACIDIC LEVEL AND IN ORDER TO STOP BACTERIAL GROWTH SO THAT THE PROCESSED FRUIT IS PRESERVED. EVEN THOUGH THE PRODU CT MANUFACTURED BY THE APPELLANT IS KNOWN BY A DIFFERENT NAME AND SOLD IN THE MARKET WI TH A IDENTITY OF FRUIT PRODUCT ONLY. (AA. AAM PAPAD ET IMLI PRODUCTS PREPARED FROM THE PROCES SING ACTIVITY WERE SOLD WITH DIFFERENT PRODUCT NAMES BY CREATING A CONSUMER DEMA ND RESPONSE AS PER VARIED TASTES. I.T.A NOS. 351 & 352/ASR/2018 10 FINAL PRODUCTS PROCESSED BY THE APPELLANT ARE THE D EHYDRATED FORM OF THE FRUIT EMANATING FROM THE ACTIVITY OF PROCESSING. DEHYDRATION IS AMONG THE OLDEST AND THE COMMON FORM OF FRUIT PRESERVATION. IN DEHYDRATION, MOISTURE IN THE FRUIT IS DRIVEN OFF, LEAVING A STABLE FOOD THAT HAS A MOISTURE CONTENT B ELOW THAT AT WHICH MICROORGANISMS CAN GROW. THE WHOLE OF THE PROCESSING ACTIVITY UNDERTAK EN AND PERFORMED BY THE ASSESSEE EXPLAINED IN THE ASSESSMENT PROCEEDINGS AS ALSO IN THE APPELLATE SUBMISSIONS IS DIRECTED TOWARDS ULTIMATE PRESERVATION OF FRUIT BY FOLLOWING THE SCIENTIFIC MECHANIZED FOOD PROCESSING TECHNOLOGY. THE ACTIONS OF THE LOWER AUT HORITIES WERE COMPLETELY CENTRIC ABOUT EXPLAINING THE SUB CATEGORIZATION OF FRUIT AND FRUI T DERIVATIVES DESPITE THE FACT THAT IT IS A SETTLED LEGAL POSITION THAT FOR THE DEDUCTION U/S 8 01B OF THE ACT, FRUIT AND FRUIT DERIVATIVES CANNOT BE CONSIDERED SEPARATE. (BB. RELIANCE IN THIS REGARD IS PLACED ON THE JUDGMENT O F ITAT AHMADABAD IN WSMANPASAND BEVERAGES LTD. VS PR. CIT DATED 24.06.2 019 WHEREIN IT HAS BEEN HELD AS UNDER: 'IN OUR CONSIDERED VIEW, WHEN THE PROCESS OF MAKING FRUIT DRINK FROM FRUIT IS SUCH THAT IT SPLITS INTO DIFFERENT SEGMENTS AND SUCH DIFFERENT SEGMENTS OF WORK ARE CA RRIED OUT BY DIFFERENT UNITS, ENTIRE WORK SO DONE IS INTE GRAL PART OF THE FRUIT PROCESSING - EVEN IF CARRIED OUT BY BOTH UNITS SEPARATELY. THE WORK DONE BY THESE DIFFERENT UNITS CANNOT BE CONSIDERED IN ISOLATION IN VIEW OF ITS INTERDEPENDE NCE AND ARTIFICIAL SPLIT OF INTEGRATED PROCESS. THE WORK DONE BY THE UNIT PROCESSING FRUIT DRINKS FROM FRUIT PULP IS AN EXTENSION AND NATURAL EXTENSION OF WORK DONE BY CONVERTING FRUIT PULP FROM FRUIT INASMUCH AS FRUIT PULP IS ONLY AN INTERMEDIATE PRODUCT AND NOT THE END PRODUCT.' AS REGARDS LEARNED PCITS ANALYSIS ABOUT STRICT INTERPRETATION OF EXEMPTION PROVISIONS, AND RELIANC E ON NOVOPAN DECISION (SUPRA) ON THIS ISSUE, IT IS NOT R EALLY RELEVANT INASMUCH AS THE PROVISION THAT WE ARE DEAL ING WITH IS AN INCENTIVE PROVISION FOR DEDUCTION- NOT EXEMPT ION. THERE IS A QUALITATIVE DIFFERENCE BETWEEN EXEMPTION AND D EDUCTION PROVISIONS, AND THESE EXPRESSIONS CANNOT BE USED INTERCHANGEABLE AS THE LEARNED PCIT HAS CHOSEN TO D O. THE EXCEPTION, LAID DOWN IN LITTMAN V. BARRON 1952 (2) AIR 393 AND FOLLOWED BY APEX COURT IN MANGALORE CHEMICALS A FERTILIZERS LTD. V. DY. COMMR. OF CCT [1992] SUPPL. (1) SCC 21 AND NOVOPA INDIA LTD. V. CCE A C 1994 (73) ELT 769 (SC), HAS BEEN SUMMED UP IN THE WORDS OF LORD LOHEN, 'IN CASE OF AMBIGUITY, A TAXING STATUTE SHOULD BE C ONSTRUED IN FAVOUR OF A TAX-PAYER DOES NOT APPLY TO A PROVISION GIVING I.T.A NOS. 351 & 352/ASR/2018 11 TAX-PAYER RELIED IN CERTAIN CASES FROM A SECTION CL EARLY IMPOSING LIABILITY. THAT IS NOT THE CASE BEFORE US. IT IS NOT AN EXEMPTION PROVISION THAT IS BEING INVOKED IN THE PR ESENT CASE. WHAT IS BEFORE US IS AN INCENTIVE PROVISION P ROVIDING FOR DEDUCTION IN THE CASE INVOLVING A PARTICULAR TY PE OF ACTIVITY, AND THERE IS NO DOUBT THAT THE NATURE OF ACTIVITIES OF THE ASSESSEE INVOLVE THAT ACTIVITY. THERE CAN HARDL Y BE ANY DISPUTE THAT THE INCENTIVE PROVISIONS NEED TO INTER PRETED LIBERALLY TO ADVANCE THE PURPOSE FOR WHICH THESE AR E ENACTED, AND, THEREFORE, ONCE THERE IS NO DISPUTE THAT THE A SSESSEE IS INVOLVED IN ACTIVITY WHICH IS INTEGRAL PART OF THE FRUIT PROCESSING, IT IS A PLAUSIBLE VIEW OF THE MATTER TH AT THE DEDUCTION IS ADMISSIBLE TO THE ASSESSEE. (CC. ALSO, THE ADVANCE RULING IN CASE OF DETNA RUSTOM BOYCE AS REPORTED IN 318 ITR 455 DATED 28.10.2009 NEED TO BECONSIDERED VIZ, A VIZ. THE ABOVE JUDICIAL PRONOUN CEMENT, WHICH GAVE A CLEAR FINDING THAT: 'IF PROCESSING AND PRESERVATION IS TO BE CONFINED ONLY TO FRUITS AS SUCH AND NOT TO DERIVATIVES FROM FRUITS, THE BENEFIT INTENDED TO BE GIVEN TO AGRO- BASED INDUSTRIES WILL OPERATE IN A VERY LIMITED SPHERE, THEREBY DEFEATING THE VERY OBJECT OF THE PROVISION HENCE THE PROFIT DERIVED FROM PRODUCTION OF FRUIT BASED DRINKS, MIXES, CONCENTRATES ETC ARE ENT ITLED TO BENEFIT OF DEDUCTION UNDER SECTION 80113(11A) OF THE ACT.' IN THE INSTANT CASE AS WELL, THE APPELLANT IS EITHE R USING FRUIT OR FRUIT DERIVATIVES IN ORDER TO PRODUC E THE END PRODUCT WHICH CONSTITUTES PROCESSING, PRESERVAT ION AND PACKAGING OF FRUITS. IT IS NOTEWORTHY THAT THE ABOVE CITED JUDGMENT OF M/ MANPASAND BEVERAGES LTD. HAS BEEN PRONOUNCED ON 24.06.2019 I.E., AFTER THE ORDER OF THE WORTHY CIT(A) WHICH WAS PASSED ON 21.03.2018 AND FACTS OF THIS CASE ARE IDENTICAL TO THE CASE OF THE APPELLANT. HENCE THE FINDING GIVEN BY T HE HON'BLE BENCH IS APPLICABLE IN THE APPELLANT'S CASE AS WELL. I.T.A NOS. 351 & 352/ASR/2018 12 HENCE THE OBSERVATION OF THE WORTHY CIT(A) THAT THE ASSESSEE IS ENGAGED IN RE-PROCESSING AND NOT ELIGIB LE FOR DEDUCTION U/S 801B(11A) OF THE ACT DOES NOT HOLD GO OD IN VIEW OF THE CASE LAW AND THE ADVANCE RULING CITE D ABOVE.IN PARA 5.6 ON PAGE 13 OF THE IMPUGNED ORDER, THE WORTHY CIT(A) HAS STATED THAT THE APPELLANT HAS MISUNDERSTOOD THE INFORMATION AS GIVEN BY MINISTRY OF FOOD PROCESSING INDUSTRIES THAT THE ACTIVITY OF THE APPELLANT IS COVERED UNDER THE FOOD AND VEGETABLE PROCESSING, ALSO, THAT INFORMATION FROM MINISTRY OF FOOD PROCESSING INDUSTRY AND PROVISIONS OF TAX ARE DISTI NCT AND CANNOT BE SEEN TOGETHER FOR THE PURPOSE OF CLARIFICATION. THE WORTHY CIT(A) QUOTED THAT: 'MERELY BECAUSE THE MINISTRY IS USING SIMILAR WORDS DOES NOT MEAN THAT THE ENTIRE PROCESS UNDERTAKEN BY THE APPELLANT QUALIFIES UNDER EXEMPTION UNDER INCOME TA X ALSO. THE MINISTRY OF FOOD PROCESSING MAKES NO DISTINCTION BETWEEN MANUFACTURERS ET PROCESSORS. SIMILARLY, ANY CLASSIFICATION OF INDUSTRY FROM VIEW POINT OF VAT, CENTRAL EXCISE AND ANY OTHER ALLIED THE REGULA TORY AUTHORITY WOULD ISPO FACTO DOES NOT MEANS THAT THE SAME CLASSIFICATION WOULD BE ADOPTED BY THE ASSESSI NG OFFICER EXAMINING THE ELIGIBILITY TO THE APPELLANT IN RESPECT OF THE EXEMPTION CLAIMED UNDER INCOME TAX ACT. THE REQUIREMENTS AND ELIGIBILITY ARE DIFFERENT WHICH NEED O BE UNDERSTOOD IN DIFFERENT CONTEXT.' (DD. FROM THE ABOVE OBSERVATION, IT IS CLEAR THAT THE WO RTHY CIT(A) REJECTED VITAL EVIDENCE SUBMITTED BY THE APPELLANT WHICH ESTABLISH ES LEGITIMACY OF DEDUCTION CLAIMED BY THE APPELLANT U/S 80-113(11A) OF THE ACT. THE FACTU AL POSITION IS THAT WORTHY CIT(A) HAS ERRED IN INTERPRETING THAT THE INTENTION BEHIND INI TIATIVES OF MINISTRY OF FOOD PROCESSING INDUSTRY (MOFPI) IS DISTINCT FROM THE TAX BENEFITS GIVEN UNDER THE INCOME TAX ACT, 1961. ALL THE INITIATIVES OF THE GOVERNMENT AS WELL AS TAX BE NEFITS/HOLIDAY GIVEN, WORKS HAND IN HAND IN ORDER TO BOOST THE ECONOMY AND ARE IN CONSONANCE WITH EACH OTHER. IT IS FURTHERMORE ESTABLISHED BY THE FACT THAT EVEN ON THE OFFICIAL W EBSITE OF THE MOFPI (INVESTOR PORTAL), IT HAS BEEN DECLARED THAT VARIOUS FISCAL BENEFITS/INCENTIV ES ARE PROVIDED BY THE GOVERNMENT OF INDIA FOR PROMOTING INVESTMENT IN THE FOOD PROCESSI NG SECTOR IN FORM OF PROFIT-LINKED TAX HOLIDAY UNDER SECTION 80-IB OF THE INCOME TAX ACT 1 961. (EE. THE GOVERNMENT, THROUGH THE MINISTRY OF FOOD PROCES SING INDUSTRIES (MOFPI), IS MAKING EVERY EFFORT TO BOOST INVESTMENTS IN THE IND IAN FOOD INDUSTRY. THE ABOVE IS A SCREENSHOT OF WEBPAGE ON MINISTRY OF FOOD PROCESSIN G INDUSTRY - INVESTOR PORTAL, WHICH I.T.A NOS. 351 & 352/ASR/2018 13 CLEARLY SHOWS THAT THE GOVERNMENT IS SEEKING INVEST MENTS BY GIVING LUCRATIVE TAX BENEFITS. THE INTENTION GIVING LUCRATIVE TAX BENEFITS. THE IN TENTION LEGISLATURE IS APPARENT FROM SUCH SCHEMES, WHICH IS TO BOOST FOOD PROCESSING SECTOR A ND PROVIDE EMPLOYMENT AS WELL AS VARIOUS FISCAL BENEFITS IN ORDER TO PROMOTE THE SMA LL ENTREPRENEURS. (FF. THUS, THE WORTHY CIT(A) HAS NOT ONLY MISINTERPRETED THE WHOLE SCENARIO BUT FAILED TO APPRECIATE THE INTENTION OF THEGOVERNMENT FOR GRANT ING DEDUCTION AS EXPLAINED BELOW AND HAS WRONGFULLY SEGREGATED INITIATIVES OF MOFPI FROM TAX HOLIDAY U/S 80-IB OF THE ACT, WHICH IS AGAINST THE INTENT OF LAW. HENCE, THE ACTION OF WOR THY CIT(A) OF NOT ACCEPTING THE LETTER RECEIVED BY THE APPELLANT FROM MOFPI VALIDATING THE ACTIVITIES OF ASSESSEE OF MANUFACTURING OF MANGO/IMLI SLICES I.E., AAM PAPAD AND IMLI PAPAD AS PROCESSING OF FRUITS IS INVALID, (LETTER PLACED AT PAGE NO. 118 OF PAPER BOOK) . THE LETTER RECEIVED BY THE APPELLANT DULY STATES MANUFACTURING OF AAM PAPAD IS ACTUALLY PROCESSING OF FRUITS ONLY, ALSO THE ABOVE EXPLANATION SHOWS THAT THE LETTER SO RECEIVED IS BI NDING AND DESERVES TO ACCEPTED. (GG. THEN, FURTHER IT IS SUBMITTED THAT THE ASSESSEE IS SUBJECTED TO EXCISE DUTY AND FALLS UNDER THE VAT AS WELL. BOTH THE AUTHORITIES HAVE AC CEPTED THE FACT THAT THE ASSESSEE IS ENGAGED IN MANUFACTURING AND PRODUCTION OF NEW ITEM AND, THUS, WHEN ONE GOVT. AUTHORITY CERTIFIES THAT IT IS ENGAGED IN MANUFACTURING AND P RODUCTION, THEN, IT DOES NOT GIVE LICENSE TO ANY OTHER GOVT. DEPARTMENT TO SAY THAT THE ASSESSEE IS NOT ENGAGED IN MANUFACTURING AND PRODUCTION OF NEW ITEM. RELIANCE IS BEING PLACED ON THE JUDGMENT OF CHANDIGARH BENCH IN THE CASE OF SHIVA EXPORTS. EVEN, THE ASSESSEE HAVE BEEN AWARDED SUBSIDY BY THE FOOD PROCESSING MINISTRY, NEW DELHI ON ACCOUNT PROC ESSING OF FRUITS AND WHICH PROVES BEYOND ANY IOTA OF DOUBT THAT THE ASSESSEE I S ENGAGED IN THE MANUFACTURE AND PRODUC6.4 THE OBSERVATION OF THE WORTHY CIT(A) IN RESPECT OF TERM 'PROCESSING' AS STATED ABOVE, IS ALSO PROVED WRONG FROM THEFINDING GIVEN BY HON'BLE ITAT AHMADABAD BENCH IN CASE OF M/S MANPASA ND BEVERAGES LTD (SUPRA) WHEREIN IT HAS BEEN HELD THAT: 'FISCAL INCENTIVES FOR FOOD PROCESSING SECTOR VARIOUS FISCAL INCENTIVES ARE PROVIDED BY THE GOVERNMENT OF INDIA FOR PROMOTING INVESTMENT IN THE FOOD PROCESSING SECTOR. SOME OF THE KEY INCENTIVES ARE OUTLINED BEL OW: INCOME TAX I.T.A NOS. 351 & 352/ASR/2018 14 PROFIT-LINKED TAX HOLIDAY UNDER SECTION 80-IB OF THE INCOME TAX ACT 1961: SECTION 80-IS OF THE INCOME-TAX ACT, 1961 PROVIDES A DEDUCTION FOR PROFITS AND GAINS DERIVED BY ELIGIBLE BUSINESSES. ONE OF THE ELIGIBLE BUSINESSES IS BUSIN ESS OF PROCESSING, PRESERVATION AND PACKAGING OF FRUITS, VEGETABLES, MEAT, MEAT PRODUCTS, POULTRY, MARINE, D AIRY PRODUCTS OR THE INTEGRATED BUSINESS OF HANDLING, ST ORAGE AND TRANSPORTATION OF FOOD GRAINS.' (HH. IN ORDER TO FURTHER JUSTIFY THE CLAIM OF THE APPELL ANT, IT IS SUBMITTED THAT THE PROVISIONS OF SECTION 80-IB ARE BENEFICIALPROVISIONS AND ARE TO BE CONSTRUED LIBERA LLY. FINANCE (NO. 2) BILL, 2004 INTRODUCED AMENDMENT IN SECTION 80-IB (11A) AND DEDUCTION WAS EXTENDED TO THE UNDERTAKING S DERIVING PROFITS FROM THE BUSINESS OF PROCESSING, P RESERVATION AND PACKAGING OF FRUITS AND VEGETABLES. THE MEMORAN DUM EXPLAINING THE BILL STATES THAT TBGAGRO BASED, INDU STRY IN THE COYNTLY IS AN IMPORTANT SOURCE OF EMPLOYMENT, ESPEC IALLY IN THE RURAL AREAS. THEREFORE, THE ENACTMENT OF THE PROVISIONS REGARDING THE PROCESSING, PRESERVATION AND PACKAGIN G OF FRUITS AND VEGETABLES NEEDS TO LIBERALLY CONSTRUED TO EXTE ND BENEFIT TO THE SMALL ENTREPRENEURS. THE BASIC IDEOLOGY BEHI ND THE AMENDMENT IN THE FINANCE BILL 2004 GETS DEFEATED IF THE,FRULS AND FRUIT DERIVATIVES WHICH ARE PURELY THE NATURAL EXTENSIONS OF THE FRUIT WILL BE CONSIDERED SEPARATELY. (II. THE ABOVE CONTENTION OF THE APPELLANT IS FULLY SUST AINED BY THE FINDING GIVEN BY HON'BLE ITAT AHMADABAD BENC H IN CASE OF M/S MANPASAND BEVERAGES LTD. (SUPRA) WHEREIN IT HAS BEEN HELD THAT: 'IT IS NOT AN EXEMPTION PROVISION THAT IS BEING INV OKED IN THE PRESENT CASE. WHAT IS BEFORE US IS AN INCENTIVE PRO VISION PROVIDING FOR DEDUCTION IN THE CASE INVOLVING A PAR TICULAR TYPE OF ACTIVITY, AND THERE IS NO DOUBT THAT THE NATURE IF ACTIVITIES OF THE ASSESSEE INVOLVE THAT ACTIVITY. THERE CAN HARDL Y BE ANY DISPUTE THAT THE INCENTIVE PROVISIONS NEED TO BE IN TERPRETED LIBERALLY TO ADVANCE THE PURPOSE FOR WHICH THEY ARE ENACTED, AND, THEREFORE, ONCE THERE IS NO DISPUTE THAT ASSES SEE IS INVOLVED IN ACTIVITY WHICH IS INTEGRAL PART OF FRUI T PROCESSING, IT I.T.A NOS. 351 & 352/ASR/2018 15 IS A PLAUSIBLE VIEW OF THE MATTER THAT THE DEDUCTIO N IS ADMISSIBLE TO THE ASSESSEE.' (JJ. LASTLY, YOUR HONOR'S KIND ATTENTION IS ALSO INVITED TO A FACT THAT THE APPELLANT HAS BEEN CLAIMING DEDUCTION SINCE AY 201011 AND NO DISPUTE HAS BEEN RAISED IN RESPECT OF THE VERY FIRST ASSESSMENT YEAR IN WHICH THE APPELLANT HAD CL AIMED DEDUCTION AND IT IS WELL SETTLED LEGAL POSITION THA T IF THE DEDUCTION U/S 80-IB IS GRANTED IN THE INITIAL ASSES SMENT YEAR, IT WOULD CONTINUE FOR THE PERIOD OF 10 CONSECUTIVE YEA R UNLESS THE RELIEF FOR INITIAL ASSESSMENT YEAR IS ALSO WITHDRAW N AT THE TIME OF WITHHOLDING RELIEF U/S 80-IB. THE DEDUCTION U/S 80-IB IS AVAILABLE FOR A LIMITED PERIOD OF TIME AND WHETHER OR NOT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION IN SUBSEQUENT YE ARS IS ISPO- FACTO DETERMINED BY THE TREATMENT EXTENDED IN THE FIRST Y EAR OF ELIGIBILITY. RELIANCE IN THIS REGARD IS PLACED ON T HE JUDGMENTS OF HON'BLE BOMBAY HIGH COURT IN CASE OF SIMPLE FOOD PR ODUCTS PVT. LTD. VS. CIT (2017) 84 TAXMANN.COM 239. 'PROCESSING AND PRESERVATION ARE TWO DISTINCT EXPRESSIONS USED SIDE BY SIDE. PROCESSING MAY BE FOR THE LIMITED PURPOSE OF PRESERVATION OF FRUITS WITHOUT BRINGING ABOUT MUCH CHANGE IN THE FORM OF THE FRUIT. BUT, 'PROCESSING' IN THE CONTEXT IN WHICH IT OCCURS OUGHT NOT TO BE CONFINED ONLY TO THE OPERATIONS THAT WOULD ENSURE THE PRESERVATION OF FRUITS AS THEY ARE OR IN THE FORM O F SLICES. IN OTHER WORDS, THE EXPRESSIONS SHOULD NOT BE CONFINED TO MINIMAL PROCESSING THAT WOULD NOT CHANGE THE IDENTITY OF FRUIT. IF PROCESSING ANDIARESSEVTIORLIS_TQLECOINED ONLY TO FRUITS AS SUCH AND NOT TO THE DERIVATIVES FORM THE, FRUITS, THE BENEFIT INTENDED ,TO BE GIXTRI TO AGRO- PROCES S IQG WILL OPERATE IN A VERY LIMITED SPHERE, THEREBY DEFEATING THE VERY OBJECT OF THE PROVISION. THE EXTRACTION OF JUICE AND OIL FROM THE FRUITS OR FURTHER CONVERTING HOMOGENIZED JUICE INTO FRUIT POWDER OR ADDING THE SUBSTANCES MEANT FOR PRESERVATION WOULD LEGITIMATELY FALL WITHIN THE SWEEP OF EXPRESSION 'PROCESSING'.' HENCE, IN VIEW OF THE ABOVE, THE PROFITS EARNED BY THE ASSESSEE FROM MANUFACTURING OF AAM I.T.A NOS. 351 & 352/ASR/2018 16 PAPAD/IMLI PAPAD ARE FULLY ELIGIBLE FOR DEDUCTION U/S 80-IB OF THE ACT. 4. THE LD. AR HAD DRAWN OUR ATTENTION TO THE ORDER OF THE ASSESSING OFFICER PASSED FOR THE ASSESSMENT YEAR 2010-11 & 2012-13 AT PAGE 111 TO 113 OF THE PAPER BOOK AND IT WAS SUBMITTED THAT IN PARAGRAPH 2 OF THE ORDER PASSED BY THE ASSESSING OFFICER, THE ASSESSEE HAS CLAIMED THE DEDUCTION U/S 80IB, GRANTED THE DEDUCTION U/S 80IB WHILE PASSING THE OR DER . 5. THE AR HAS DRAWN OUR ATTENTION TO THE ASSESSMENT OR DER PASSED ON THE FACELESS SCHEME ON 2018-19 AT PAGE 33 AND 34 WHEREB Y THE AO IN LIMITED SCRUTINY HAD DECIDED THE FOLLOWING ISSUES : S. NO. ISSUES I. DEDUCTION CLAIMED FOR INDUSTRIAL UNDERTAKING U /S 80IA/80IAB/80IAC/IB/IC/IBA/80ID/80IE/10A/10AA II. DETAILS OF ASSETS AND LIABILITIES 5.1 AFTER CONSIDERING THE SUBMISSION FILED BY THE A SSESSEE, THE ASSESSING OFFICER UNDER THE FACELESS ASSESSMENT SCHEME HAD ACCEPTED T HE RETURNED OF INCOME FILLED BY THE ASSESSEE. 5.2 ON THE BASIS OF THE ABOVE, IT WAS SUBMITTED THA T THE ASSESSING OFFICER WHILE PASSING THE ASSESSMENT ORDER HAD WRONGLY DENIED THE BENEFIT OF 80IB IN RESPECT OF MANGO PULP JUICE DURING THE YEARS UNDER CONSIDERATI ON. FURTHER THE CIT(A) IN I.T.A NOS. 351 & 352/ASR/2018 17 APPEAL AFTER GIVING SHOW CAUSE NOTICE HAD ENHANCE T HE INCOME ASSESSEED BY THE AO AND HAD COMPLETELY DENIED THE BENEFIT U/S 80IB, OU R ATTENTION WAS DRAWN TO PARAGRAPH 5.6 TO PARAGRAPH 6.2 TO THE FOLLOWING EFF ECTS IS REPRODUCED AS UNDER: 5.6 CERTIFICATE ISSUED BY MINISTRY OF FOOD PROCESSING: THE APPELLANT HAS RELIED HEAVILY UPON INFORMATION R ECEIVED BY IT UNDER RTI FROM MINISTRY OF FOOD PROCESSING INDUSTRIES ON 24/10/2017. IN ORD ER TO APPRECIATE THE IMPACT OF THIS INFORMATION IT WOULD BE USEFUL TO REPRODUCE THE ENT IRE TEXT OF INFORMATION AS UNDER: TOMATO KETCHUP, AAM PAPAD MANUFACTURED FROM MANGO/ TAMRIND SLICE ARE COVERED UNDER THE FRUITS & VEGETABLE PROCESSING (F& VP). THE ABOVE ACTIVITIES OFF&VP ARE ELIGIBLE ACTIVITIES FOR AVAILING GRANT IN AID UNDER THE SCHEME OF CREATION/EXPANSION OF FOOD PROCESSING AND PRESERVATION CAPACITIES. FOR DETAILED GUIDELINES YOU ARE REQUESTED TO VISIT OUR WEBSITE WWW. MOFPI. NIC. IN . THE ABOVE ACTIVITIES ARE COVERED UNDER THE SCHEME O F CREATION/EXPANSION OF FOOD PROCESSING & PRESERVATION CAPACITIES. DETAILED GUID ELINES MAY BE DOWNLOADED FROM THE MINISTRYS WEBSITE WWW. MOFPI. INC. IN. THE APPELLANT HAS MISUNDERSTOOD THE INFORMATION ABO VE TO ASSUME THAT THE MANUFACTURING OF AAM PAPAD IS COVERED UNDER THE FRUITS AND VEGETA BLE PROCESSING FOR INCOME TAX ACT ALSO. THE ENTIRE BACKGROUND HAS TO BE UNDERSTOOD FROM THE ANGLE THAT THE QUESTION POSED BY THE APPELLANT TO THE MINISTRY OF FOOD PROCESSING WAS FROM THE VIEWPOINT OF ELIGIBILITY FOR AVAILING GRANT IN AID UNDER THE SCHEME OF CREATION/EXPANSION OF FOOD PROC ESSING AND PRESERVATION CAPACITIES. THE GOVERNMENT OF INDIA TH ROUGH THE MINISTRY OF FOOD PROCESSING ISSUES POLICIES FROM TIME TO TIME TO PRO VIDE GRANT-IN-AID TO ENCOURAGE MORE AND MORE INDUSTRIES TO GET ENGAGED IN HANDLING THE FOOD PRODUCTS. IT MAKES NO DIFFERENCE WHETHER THE INDUSTRY IS ENGAGED IN MANUFACTURING OF A DIFFERENT PRODUCT FROM FRUITS/VEGETABLES OR THE INDUSTRY IS MERELY PROCESS ING AND PRESERVING THESE ITEMS. THE OBJECTIVE OF THE MINISTRY IS TO DIVERT THE FOCUS OF INDUSTRY TOWARDS FOOD AND VEGETABLES. THE CANVAS OF PROVIDING GRANT-IN-AID IS MUCH LARGER . THE ABOVE IS FURTHER CLARIFIED FROM PARAGRAPH 3 OF THE ABOVE LETTER WHICH CLEARLY MENTION IS THAT THE SAID LETTER HAS BEEN ISSUED KEE PING IN VIEW THE PARTICULAR SCHEME ISSUED BY THE GOVERNMENT WHICH IS A KNOWN AS THE SC HEME OF CREATION/EXPANSION OF FOOD PROCESSING AND PRESERVATION CAPACITIES. MERELY BECA USE THE MINISTRY IS USING SIMILAR WORDS DOES NOT MEAN THAT THE ENTIRE PROCESS UNDERTA KEN BY THE APPELLANT QUALIFIES FOR THE I.T.A NOS. 351 & 352/ASR/2018 18 EXEMPTION UNDERINCOME TAX ALSO! THE MINISTRY OF FOO D PROCESSING MAKES NO DISTINCTION BETWEEN MANUFACTURERS & PROCESSORS. SIMILARLY, ANY CLASSIFICATION OF INDUSTRY FROM THE VIEWPOINT OF VAT, CENTRAL EXCISE AND ANY OTHER ALLIED THE REGULATORY AUTHORIT IES WOULD IPSO FACTO NECESSARILY DOES NOT MEAN THAT THE SAME CLASSIFICATION WOULD BE ADOP TED BY THE ASSESSING OFFICER EXAMINING THE ELIGIBILITY OF THE APPELLANT IN RESPE CT OF THE EXEMPTION CLAIMED UNDER INCOME TAX ACT. THE REQUIREMENTS AND ELIGIBILITY IS ARE DIFFERENT WHICH NEED TO BE UNDERSTOOD IN THE DIFFERENT CONTEXT. 5.7. NOTICE U/S 251 (2) OF INCOME TAX ACT: IN THE COURSE OF APPELLATE PROCEEDINGS, THE FACTUAL MATRIX OF ITS MANUFACTURING WAS UNDERTA KEN AND A PRIMA FACIE VIEW WAS FORMED THAT THE APPELLANT WAS NOT ENTITLED TO DEDUC TION U/S 80IB (11 A) OF INCOME TAX ACT AT ALL WHEREAS THE ASSESSING OFFICER HAS ALLOWE D 40% OF THE TOTAL INCOME AS DEDUCTION. IN NOTICE UNDER SECTION 251 (2) OF INCOM E TAX ACT PROVIDING AN OPPORTUNITY TO THE APPELLANT WAS GIVEN ON 19/01/2018. IN RESPONSE TO THIS NOTICE THE APPELLANT FILED TWO WRITTEN SUBMISSIONS ON 06/02/2018 AND 28/02/2008. T HE WRITTEN SUBMISSIONS OF THE APPELLANT WERE CONSIDERED. 5.8. IN CONSIDERATION OF THE DISCUSSION ABOVE, THE ENTIRE DEDUCTION OF THE APPELLANT CLAIMED AT RS. 1,28,43,441/- IS DISALLOWED. THE ENT IRE INCOME OF THE APPELLANT AS PER PROFIT AND LOSS ACCOUNT IS TAXABLE INCOME OF THE AP PELLANT FOR THE YEAR UNDER CONSIDERATION. THE NECESSARY NOTICE FOR ENHANCEMENT WAS DULY GIVEN TO THE APPELLANT ON 19/01/2018 AND THE ABOVE FINDINGS HAVE BEEN ARRIVED AT AFTER DUE CONSIDERATION OF THE REPLY OF THE APPELLANT SUBMITTED IN RESPONSE TO THE NOTICE. 5.9. THE GROUNDS OF APPEAL ARE DISMISSED AND ADDITION IS ENHANCED AS ABOVE. 6.0. GROUND OF APPEAL NO. 1: THIS GROUND OF APPEAL IS RELATED TO DISALLOWANCE OF LOSS OF RS. 105,173/- ON ACCOUNT OF INTEREST PAID ON SEL F OCCUPIED RESIDENTIAL HOUSE. THE ASSESSING OFFICER WAS PERSUADED BY TWO FACTS THAT T HE AFORESAID PROPERTY AT JODHPUR WAS SHOWN AS COMMERCIAL ASSET BY THE APPELLANT IN THE W EALTH TAX RETURNS. SECONDLY IT WAS ADMITTED BY THE APPELLANT THAT THE SAID PROPERTY WA S BEING USED BY THE EMPLOYEES OF THE APPELLANT WHENEVER THEY ARE VISITING THAT PLACE. TH E ASSESSING OFFICER REFERED TO THE PROVISIONS OF SECTION 24 OF INCOME TAX ACT AND DISA LLOWED THE INTEREST CLAIMED ON THE AFORESAID PROPERTY. 6.1 IN THE COURSE OF APPELLATE PROCEEDINGS IT WAS C ONTENDED BY THE APPELLANT THAT THE AFORESAID PROPERTY WAS RESIDENTIAL IN NATURE AS IT WAS BEING USED BY THE APPELLANT FOR RESIDENTIAL PURPOSES, NO DEPRECIATION HAS BEEN CLAI MED AND THE EMPLOYEES HAVE BEEN I.T.A NOS. 351 & 352/ASR/2018 19 STAYING THERE TO REDUCE THE BUSINESS EXPENSES. EVEN IF THE PROPERTY ABOVE IS CONSIDERED TO BE COMMERCIAL PROPERTY, THE INTEREST ON THE SAME IS ALLOWED AS BUSINESS EXPENDITURE. 6.2. I HAVE GIVEN CAREFUL CONSIDERATION TO THE CONTENTIONS ABOVE AND FIND THAT THE SAME ARE NOT ACCEPTABLE BECAUSE IF THE PROPERTY HAS BEEN TREATED AS COMMERCIAL ASSET IT GOES OUTSIDE THE PURVIEW OF SECTION 24 OF INCOME TA X ACT AND MUCH SO FOR THE DEDUCTIONS ADMISSIBLE TO SELF OCCUPIED PROPERTIES. FURTHER, TH E ADMISSIBILITY OF INTEREST ON BORROWED CAPITAL FOR, PURCHASE OF CAPITAL ASSET HAS NUMBER O F CONDITIONS TO BE SATISFIED BEFORE THE SAME IS PERMITTED FOR THE PERIOD PRIOR TO PUT TO US E OF THE ASSET AND FOR THE PERIOD AFTER THE ASSET HAS BEEN PUT TO USE. INSOFAR AS DEPRECIATION IS CONCERNED THE APPELLANT WAS OBLIGED TO INCLUDE THE AFORESAID ASSET INTO THE BLOCK OF AS SET AND CLAIM DEPRECIATION ONLY AFTER DEMONSTRATING THAT THE ASSET HAS BEEN PUT TO USE FO R BUSINESS PURPOSES. NONE OF THE CONDITIONS HAVE BEEN SATISFIED BY THE APPELLANT EIT HER IN RESPECT OF HOUSE PROPERTY OR AS A BUSINESS ASSET, THEREFORE THE ASSESSING OFFICER WAS JUSTIFIED IN DISALLOWING THE LOSS CLAIMED ON THE SAID PROPERTY. THE GROUND OF APPEAL IS DISMISSED. 6. PER CONTRA LD DR RELIED UPON THE ORDER PASSED B Y LOWER AUTHORITIES . 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD.THE QUESTION POSED BEFORE US IN THE PRESENT APPEAL BY THE ASSESSEE WAS THAT WHETHER THE MANUFACTURING OF THE AAM PAPAD INVOLVED IN THE PROCESSING PACKAGING AND MANUFACTURING AS DEFINED U/S 80IB(11A) OF THE I .T. ACT OR NOT. THE MANUFACTURING, PROCESSING AND PACKING ARE NOT DEFIN ED UNDER THE INCOME TAX ACT. HOWEVER, WE WOULD LIKE TO RECORD THE VARIOUS JUDICI AL INTERPRETATION AND JUDICIAL MEANING ATTACHED WITH THE PROCESSING, PACKING AND M ANUFACTURING. WE WOULD LIKE TO RECORDAS UNDER: - SINCE THE PROCESS OF PRESERVATION, PROCESSING AND P ACKAGING OF FRUITS MAINLY MANGO , TAMARIND ETC IS PART AND PARCEL OF THE INTEGRATED BUSINESS OF THE APPELLANT, DEDUCTION UNDER SECTION 80IB(11A) OF THE ACT WAS CLAIMED BY T HE APPELLANT ON FULFILLMENT OF ALL CONDITIONS SPECIFIED THEREIN. I.T.A NOS. 351 & 352/ASR/2018 20 THE MAIN ALLEGATIONMADE BY THE REVENUE IN DENYING T HE DEDUCTION CLAIMED BY THE APPELLANT UNDER SECTION 80IB(11A) OF THE ACT IS THA T (A) WHETHER MANGO PULP / TAMARIND ARE TO BE TREATED AS FRUITS FOR THE PURPOSE OF SE CTION 80IB(11A) OF THE ACT; AND (B) WHETHER THE APPELLANT IS ENGAGED IN THE BUSINESS OF PROCESSING, PRESERVATION AND PACKAGING. SECTION 80IB(11A) OF THE ACT PROVIDES DEDUCTION IN RESPECT OF PROFITS DERIVED FROM UNDERTAKINGS ENGAGED IN THE BUSINESS OF PROCESSING, PRESERVATION AND PACKAGING OF FRUITS OR VEGETABLES OR MEAT AND MEAT PRODUCTS OR POULTRY OR MARINE OR DAIRY PRODUCTS. THE PROVISIONS OF SECTION 80IB(11A) OF THE ACT READ AS UNDER: (11A ) THE AMOUNT OF DEDUCTION IN A CASE OF AN UNDERTAKI NG DERIVING PROFIT FROM THE BUSINESS OF PROCESSING, PRESERVATION AND PACKAGING OF FRUITS OR VEGETABLES OR MEAT AND MEAT PRODUCTS OR POULTRY OR MARINE OR DAIRY PRODUCT S OR FROM THE INTEGRATED BUSINESS OF HANDLING, STORAGE AND TRANSPORTATION OF FOOD GRAINS , SHALL BE HUNDRED PER CENT OF THE PROFITS AND GAINS DERIVED FROM SUCH UNDERTAKING FOR FIVE ASSESSMENT YEARS BEGINNING WITH THE INITIAL ASSESSMENT YEAR AND THEREAFTER, TWENTY- FIVE PER CENT (OR THIRTY PER CENT WHERE THE ASSESSEE IS A COMPANY) OF THE PROFITS AND GAINS DERIVED FROM THE OPERATION OF SUCH BUSINESS IN A MANNER THAT THE TOTAL PERIOD OF DEDUC TION DOES NOT EXCEED TEN CONSECUTIVE ASSESSMENT YEARS AND SUBJECT TO FULFILMENT OF THE CONDITION THAT IT BEGI NS TO OPERATE SUCH BUSINESS ON OR AFTER THE 1ST DAY OF APRIL, 200 1 . PROVIDED THAT THE PROVISIONS OF THIS SECTION SHALL NOT APPLY TO AN UNDERTAKING ENGAGED IN THE BUSINESS OF PROCESSING, PRESERVATION AND PACKAG ING OF MEAT OR MEAT PRODUCTS OR POULTRY OR MARINE OR DAIRY PRODUCTS IF IT BEGINS TO OPERATE SUCH BUSINESS BEFORE THE 1ST DAY OF APRIL, 2009. (EMPHASIS SUPPLIED) A BARE PERUSAL OF SECTION 80IB(11A) OF THE ACT INDI CATES THAT THREE PRIMARY OPERATIONS ARE REQUIRED TO BE UNDERTAKEN BY THE ASSESSEE IN RELATI ON TO FRUITS, FOR THE PURPOSE OF AVAILING DEDUCTION UNDER THE SAID SECTION VIZ.: (I) PROCESSING; (II) PRESERVATION; AND (III) PACKAGING . FURTHER, THE SECTION USES THE WORDS AND WHICH I MPLIES THAT ALL THE 3 AFORESAID ACTIVITIES ARE TO BE UNDERTAKEN BY THE AS SESSEECUMULATIVELY AND EVEN IF ONE OF THE SAID ACTIVITIES IS NOT UNDERTAKEN, THE ASSESSEE WOULD NOT BE ELIGIBLE FOR DEDUCTION UNDER THE SAID SECTION. I.T.A NOS. 351 & 352/ASR/2018 21 BEFORE ADVERTING TO THE LEGAL POSITION, IT WOULD BE PERTINENT TO FIRST UNDERSTAND THE PROCESSES UNDERTAKEN BY THE APPELLANT IN ITS UNIT F OR PROCESSING, PRESERVATION AND PACKAGING OF FRUITS MANGO AND TAMARAID.AT PAGE 77 , 77A AND 78 OF THE PAPER BOOK , THE PROCESS OF MANUFACTURING AAM PAPAD IS GIVEN TO THE FOLLOWING EFFECT: - PRODUCTION FLOW SHEET (AAM PAPAD MEETHA) PURCHSE OF MANGO/MANGO PULP PULPING OF FRUIT ADDITIONOF SUGAR, OTHER ADDITIVES AND PRESERVATIVES DRYING CUTTING IN REQUIRED SIZES PACKING STORAGE PRODUCTION FLOW SHEET (AAM PAPAD) PURCHSE OF MANGO/MANGO PULP/TAMARIND REMOVAL OF SEED/INEDIBLE PARTS PULPING OF FRUIT (MINCER/PULPER) ADDITION OF SUGAR, OTHER ADDITIVES AND PRESERVATIVES MIXING (BATCH MIXER) CRUSHING AND HOMOGENIZING (CRUSHER) DRYING (HOTAIR GENERATOR) PACKING STORAGE PRODUCTION FLOW SHEET (IMLI PAPAD) PURCHSE OF TAMARIND REMOVAL OF SEED, FIBRE AND OTHER WASTE INEDIBLE PARTS (MANUAL) I.T.A NOS. 351 & 352/ASR/2018 22 SEEDLESS TAMARIND CRUSHING AND PULPING (MINCER MACHINE) ADDITION OF SUGAR AND OTHER ADDITIVES AND PRESERVATIVES MIXING IN BATCH MIXER (BATCH MIXER) CRUSING AND HOMOGENIZING (CRUSHING MACHINE) ROLLING AND CUTTING (SHEET AND CUTTING MACHINE) PACKING STORAGE ON PERUSAL OF THE ACTIVITIES UNDERTAKEN BY THE APPE LLANT, IT IS THUS CLEAR THAT ALL THE THREE PROCESSES, VIZ. PROCESSING, PRESERVATION & PA CKAGING ARE BEING CARRIED OUT BY THE APPELLANT, WHICH ARE THE ESSENCE FOR CLAIMING D EDUCTION UNDER SECTION 80IB(11A) OF THE ACT. INGREDIENTS OF SECTION 80-IB(11A) - MEANING OF PROC ESSING, PRESERVATION AND PACKAGING AS STATED ABOVE, THREE PRIMARY OPERATIONS ARE REQUI RED TO BE UNDERTAKEN BY THE ASSESSEEON A CUMULATIVE BASIS IN ORDER TO BE ELIGIBLE TO CLAIM DEDUCTION UNDER SECTION 80IB(11A) OF THE ACT VIZ.: (I) PROCESSING; (II) PRESERVATION; AND (III) PACKAG ING OF FRUITS . IN THIS REGARD IT IS RESPECTFULLY SUBMITTED, THAT T HE PHRASE PROCESSING, PRESERVATION AND PACKAGING AS CONTEMPLATED UNDER SECTION 80IB(11A) OF THE ACT HAS A VERY WIDE CONNOTATION AND INCLUDE WITHIN ITS AMBIT ALL ACTIVI TIES INCIDENTAL TO BRINGING THE ELIGIBLE PRODUCT I.E MANGO AMDTAMARID IN THE INSTANT CASE, T O ITS FINAL CONSUMABLE FORM NAMELY AAM PAPAD . THE WORDS PROCESSING, PRESERVATION AND PACKAGING HAVE NOT BEEN DEFINED IN THE ACT, NOR EXPLAINED IN THE CBDT CIRCULAR. HOWEVER, FOR TH E PURPOSE OF INTERPRETATION REFERENCE MAY BE MADE TO JUDICIAL PRONOUNCEMENTS AND DICTIONA RIES, WHERE THE MEANING OF THE SAID TERM HAS BEEN EXPLAINED IN COMMON PARLANCE. I.T.A NOS. 351 & 352/ASR/2018 23 PROCESSING IN VARIOUS DICTIONARIES, THE EXPRESSION PROCESSING IS DEFINED AS UNDER: - THE TERM PROCESSING HAS BEEN DEFINED IN THE OXFOR D ENGLISH DICTIONARY AS THE TREATMENT OF RAW MATERIAL, FOOD, ETC. IN ORDER TO C HANGE IT, PRESERVE IT, ETC - COLLINS DICTIONARY DEFINES PROCESSING AS THE ACT OR PROCESS OF TREATING OR PREPARING SOMETHING BY A SPECIAL METHOD - CAMBRIDGE DICTIONARY DEFINES PROCESSING AS THE ACT OF PREPARING, CHANGING, OR TREATING FOOD OR NATURAL SUBSTANCES AS A PART OF AN INDUSTRIAL OPERATION - THE TERM PROCESSING HAS BEEN DEFINED IN FREE DICT IONARY AS THE ACT OR PROCESS OF TREATING OR PREPARING SOMETHI NG BY A SPECIAL METHOD - THE MERRIAM WEBSTER HAS DEFINED THE TERM PROCESS AS A NATURAL PHENOMENON MARKED BY GRADUAL CHANGES THAT LEAD TOWARD A PARTICULAR RE SULT 7. THE SUPREME COURT IN THE CASE OF CHOWGULE AND CO. P. LTD. V. UNION OF INDIA [1981] 47 STC 124 HELD THAT THE NATURE AND EXTENT OF PROCESSING MAY VARY FROM CASE TO CASE; IN ONE CASE THE PROCESSING MAY BE SLIGHT A ND IN ANOTHER IT MAY BE EXTENSIVE; BUT WITH EACH PROCESS SUFFERED, THE COMMODITY WOULD EXPERIEN CE A CHANGE. WHEREVER A COMMODITY UNDERGOES A CHANGE AS A RESULT OF SOME OPERATION PE RFORMED ON IT OR IN REGARD TO IT, SUCH OPERATION WOULD AMOUNT TO PROCESSING OF THE CO MMODITY. THE NATURE AND EXTENT OF THE CHANGE IS NOT MATERIAL. ACCORDINGLY, THE COURT HELD THAT BLENDING OF ORE IN THE COURSE OF LOADING THROUGH THE MECHANICAL ORE HANDLING PLANT A MOUNTED TO 'PROCESSING' OF ORE. 8. AUTHORITY FOR ADVANCE RULING IN THE CASE OF MRS. DELNARUSTUM BOYCE IN RE: 318 ITR 455 , WHEREIN IT WAS HELD THAT AN UNDERTAKING SET UP TO P RODUCE FRUIT-BASED DRINK MIXES/CONCENTRATES DERIVED FROM FRUIT JUICES THROUG H VARIOUS PROCESSES INVOLVING VARIOUS STEPS, SUCH AS PEELING, EXTRACTION OF FRUIT OIL, FR UIT PULPING, SCREENING, EMULSIFYING, HOMOGENIZING, SPRAY DRYING, ADDITION OF PRESERVATIV ES, COLOUR AND SWEETNESS, AND PACKAGING, WOULD BE ELIGIBLE FOR TAX HOLIDAY UNDER SECTION 80I B(11A) OF THE ACT, HOLDING AS UNDER: 10. PROCESSING AND PRESERVATION ARE TWO DISTINCT E XPRESSIONS USED SIDE BY SIDE. PROCESSING MAY BE FOR THE LIMITED PURPOSE OF PRESER VATION OF FRUITS WITHOUT BRINGING ABOUT MUCH CHANGE IN THE FORM OF THE FRUIT. BUT, P ROCESSING IN THE CONTEXT IN WHICH IT OCCURS OUGHT NOT TO BE CONFINED ONLY TO THE OPERATI ONS THAT WOULD ENSURE THE PRESERVATION I.T.A NOS. 351 & 352/ASR/2018 24 OF FRUITS AS THEY ARE OR IN THE FORM OF SLICES . IN OTHER WORDS, THE EXPRESSION SHOULD NOT BE CONFINED TO MINIMAL PROCESSING THAT WOULD NOT CHANG E THE IDENTITY OF THE FRUIT. IF PROCESSING AND PRESERVATION IS TO BE CONFINED ONLY TO FRUITS AS SUCH AND NOT TO THE DERIVATIVES FROM THE FRUITS, THE BENEFIT INTENDED T O BE GIVEN TO AGRO-PROCESSING INDUSTRIES WILL OPERATE IN A VERY LIMITED SPHERE, T HEREBY DEFEATING THE VERY OBJECT OF THE PROVISION. THE EXTRACTION OF JUICE AND OIL FROM THE FRUITS OR FURTHER CONVERTING THE HOMOGENIZED JUICE INTO FRUIT POWDER AND ADDING THE SUBSTANCES MEANT FOR PRESERVATION WOULD LEGITIMATELY FALL WITHIN THE SWEEP OF THE EXP RESSION PROCESSING. THE FACT THAT THE FRUIT ASSUMES A DIFFERENT FORM OR THAT A SERIES OF OPERATIONS ARE INVOLVED IN PREPARING THE MIXED JUICES AND CONCENTRATES WHICH C OULD BE PRESERVED FOR LONG DOES NOT TAKE IT OUT OF BOUNDS OF PROCESSING. PROCESSING IN ITS WIDER SENSE WOULD STILL BE APTLY APPLICABLE. 11. I AM THEREFORE OF THE VIEW THAT THE APPLICANT I S ENTITLED TO THE BENEFIT OF DEDUCTION CONTEMPLATED IN SUB-SECTION (11A) OF SECTION 80-IB AND THE QUESTION HAS TO BE ANSWERED IN THE AFFIRMATIVE SUBJECT HOWEVER TO THE CLARIFICA TION THAT THE CONDITIONS LAID DOWN IN SUB-SECTION (2) OF SECTION 80-IB SHOULD BE SATISFIE D. I MAY ADD THAT THE COMMISSIONER IN HIS COMMENTS HAS VERY RIGHTLY TAKEN THE STAND THAT THE PROFIT OF THE PROPOSED BUSINESS 'SEEMS TO BE ELIGIBLE FOR DEDUCTION PROVIDED THE AS SESSEE SATISFIES THE OTHER CONDITIONS'. (EMPHASIS SUPPLIED) 9. FURTHER IN THE CASE OF 3F OIL PALM AGROTECH (P.) LTD VS. ACIT: 178 ITD 319 .IT WAS HELD AS UNDER: 18. THE NEXT QUESTION IS WHETHER THE ASSESSEE SATISFIE S ALL THE THREE CONDITIONS OF PROCESSING, PRESERVATION AND PACKAGIN G. THE ACTIVITY OF PROCESSING ITSELF MEANS THAT ORIGINAL ARTICLE UNDER GOES A CHANGE. THE CHANGE MAY NOT ONLY BE VISIBLE BUT MAY ALSO CHANGE IN ITS FORM. THE HON'BLE AUTHORITY FOR ADVANCE RULING IN THE CASE OF MRS. DELNARUSTOM BOYCE (SUPRA) HAS CONSIDERED THE DECISIONS OF THE H ON'BLE SUPREME COURT IN THE CASE OF DELHI COLD STORAGE (P.) LTD. V. CIT [1991] 59 TAXMAN 144/191 ITR 656 AND IN THE CASE OF CHOWGULE& CO. (P.) LTD. V. UNIO N OF INDIA [1981] 7 TAXMAN 71 (SC) , TO HOLD THAT IN COMMON LANGUAGE THE WORD 'PROCESSING' IS UNDERSTOOD AS AN ACTION WHICH BRINGS FORTH SOME CHANGE OR ALTERATION OF THE GOODS OR MATERIAL WHICH IS SUBJECTED TO THE ACT OF PROCESSING. IT WAS ALSO HELD THAT THE NATURE AND EXTENT OF PROCESSING MAY VARY FROM CASE TO CASE; IN ONE CASE, THE PROCES SING MAY BE SLIGHT AND IN ANOTHER IT MAY BE EXTENSIVE, BUT EACH PROCESS SU FFERED, THE COMMODITY WOULD EXPERIENCE A CHANGE. AFTER CONSIDERING THESE JUDGMENTS, THE AAR HAS HELD THAT PROCESSING OF FRUITS DOES NOT MEAN TH AT THE END PRODUCT ALSO SHOULD BE IN THE FORM OF FRUIT OR IN THE FORM OF SL ICES ONLY. IT WAS HELD THAT THE EXPRESSION SHOULD NOT BE CONFINED TO MINIMUM PR OCESS THAT WILL NOT CHANGE THE IDENTITY OF THE FRUIT. LET US THEREFORE EXAMINE THE APPLICABILITY OF THE SAID DECISION TO THE CASE OF ASSESSEE BEFORE US. 19. IN THE CASE OF MRS. DELNARUSTUM BOYCE (SUPRA), THE AAR WAS CONSIDERING THE CASE OF AN ASSESSEE, A NON-RESIDENT , WHO PROPOSED TO SET I.T.A NOS. 351 & 352/ASR/2018 25 UP AND PROMOTE A UNIT TO PRODUCE FRUIT-BASED DRINK MIXES/CONCENTRATES DERIVED FROM FRUIT JUICES THROUGH VARIOUS PROCESSES INVOLVING VARIOUS STEPS, SUCH AS PEELING, EXTRACTION OF FRUIT OIL, FR UIT PULPING, SCREENING, EMULSIFYING, HOMOGENIZING, SPRAY DRYING, ADDITION O F PRESERVATIVES, COLOR AND SWEETNESS AND PACKAGING AND THE SAID ASSESSEE H AD SOUGHT DIRECTION FROM THE AAR ON THE QUESTION WHETHER THE PROFIT OF HER PROPOSED UNDERTAKING WOULD BE ELIGIBLE FOR DEDUCTION U/S 80I B(11A) OF THE ACT. THE AAR, AFTER CONSIDERING VARIOUS DECISIONS OF THE HON 'BLE SUPREME COURT ON THE WORD 'PROCESSING' HAS HELD AS UNDER:. 20. THIS DECISION WAS QUOTED BY THE ASSESSEE BEFORE THE AO BUT THE AO HAS HELD IT TO BE NOT APPLICABLE TO THE CASE OF THE ASS ESSEE BEFORE US BY HOLDING THAT THE DECISION OF THE AAR IS BINDING ONLY IN THE CASE DECIDED BY THE AAR AND NOT IN THE OTHER CASES. 21. IN SUPPORT OF HIS CONTENTION THAT A DECISION OF THE AAR IS BINDING ON THE REVENUE DEPARTMENT, THE LEARNED COUNSEL FOR THE ASSESSEE HAS PLACED RELIANCE ON THE FOLLOWING CASE LAWS: 22. FROM THE ABOVE JUDGMENTS, WE FIND THAT THOUGH T HE DECISION OF THE AAR IS NOT BINDING ON THE PERSONS OTHER THAN THE AP PLICANT BEFORE IT AND THE DEPARTMENT WHEN IT IS DEALING WITH THE CASE OF THAT APPLICANT, AS HELD BY THE HON'BLE SUPREME COURT IN THE CASE OF COLUMBI A SPORTSWEAR CO. (SUPRA) THE PRINCIPLE AND THE RATIO LAID DOWN B Y THE AAR IS PERSUASIVE IN THE CASES WITH SIMILAR FACTS. IN THE CASE OF THE ASSESSEE BEFORE US ALSO, THE QUESTION INVOLVED WAS WHETHER THE EXTRACTION OF OIL FROM THE FFBS OF OIL PALM IS PROCESSING OR NOT, AND THE AAR HAS H ELD SIMILAR ACTIVITY IN THE CASE OF MANGO PULP OR POWDER, TO BE SO AND HENC E THE PRINCIPLE AND RATIO OF DECISION OF THE AAR IN THE CASE OF MRS. DE LNARUSTUM BOYCE (SUPRA) IS, DEFINITELY APPLICABLE IN OTHER SI MILAR CASES ALSO AND WE HAVE TO HOLD THAT THE ACTIVITIES CARRIED ON BY THE ASSESSEE FOR EXTRACTION OF OIL FROM FFB'S OF OIL PALM, WILL AMOUNT TO PROCE SSING U/S 80IB(11A) OF THE ACT. 26. THE LAST OBJECTION OF THE REVENUE IS THAT THE E ND PRODUCT IS NOT A FRUIT BUT IT IS EDIBLE OIL OR KERNELS AND SHELLS WH ICH ARE NOT CONSUMABLE GOODS, AND HENCE IT DOES NOT SATISFY THE CONDITION OF SECTION 80IB(11A). IN THE CASE OF DELNARUSTUM BOYCE INRE, THE AAR HAS ALSO HELD THAT THE END PRODUCT NEED NOT REMAIN IN THE SAME FORM AS THE RAW MATERIAL. IT MAY BE IN THE FORM OF JUICE OR CUT FRUITS OR EVEN O IL OR POWDER. AS LONG AS THE END PRODUCT IS DERIVED FROM THE FRUITS OR VE GETABLES, THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80IB(11A) OF THE ACT. IN THESE CIRCUMSTANCES, WE ARE SATISFIED THAT THE OIL PALM IS A FRUIT AND T HAT IT UNDERGOES DIFFERENT PROCESSES BEFORE EXTRACTION OF OIL, AND THE PALM OI L IS PRESERVED UNDER ADJUSTED TEMPERATURE AND THEY ARE PACKED IN LARGE C ONTAINER OR TANKS AND THEREFORE, THE ASSESSEE IS ELIGIBLE FOR DEDUCTI ON U/S 80IB(11A) OF THE ACT. THE ASSESSEE'S APPEALS ARE ACCORDINGLY ALLOWED . (EMPHASIS SUPPLIED) I.T.A NOS. 351 & 352/ASR/2018 26 10. IN VIEW OF THE AFORESAID, IT CAN BE SAID THAT ALL T HE ACTIVITIES WHICH BRINGS FORTH SOME CHANGE OR ALTERATION IN THE GOODS OR MATERIAL COME UNDER THE DEFINITION OF PROCESSING. SUCH CHANGE MAY NOT ONLY BE VISIBL E BUT MAY ALSO CHANGE IN ITS FORM. THUS, WHENEVER A COMMODITY UNDERGOES A CHANGE AS A RESULT OF SOME OPERATION PERFORMED ON IT, SUCH OPERATION WOULD AMO UNT TO PROCESSING OF THE COMMODITY. IN THE PRESENT CASE THERE IS CHANGE IN P HYSICAL FORM , CONTENTS AND TASTE. NEW PRODUCT CASE INTO EXISTENCE NAMELY A AM PAPAD ON ACCOUNT OF PROCESSING . PRESERVATION IN VARIOUS DICTIONARIES, THE EXPRESSION PRESERVATION IS DEFINED AS UNDER: - THE TERM PRESERVATION HAS BEEN DEFINED IN THEMERR IAM WEBSTER AS THE ACT, PROCESS, OR RESULT OF PRESERVING SOMETHING: SUCH AS (A) THE ACTIVITY OR PROCESS OF KEEPING SOMETHING VALUED ALIVE, INTACT, OR FREE FROM DAMAGE OR DECAY; (B) THE PREPARATION OF FOOD FOR FUTURE USE (AS BY CANNI NG, PICKLING, OR FREEZING) TO PREVENT SPOILAGE - CAMBRIDGE DICTIONARY DEFINES PRESERVATION AS THE ACT OF KEEPING SOMETHING THE SAME OR OF PREVENTING IT FROM BEING DAMAGED - OXFORD ENGLISH DICTIONARY DEFINES PRESERVATION AS THE ACT OF KEEPING SOMETHING IN ITS ORIGINAL STATE OR IN GOOD CONDITION - MACMILLAN DICTIONARY HAS DEFINED THE TERM PRESERVA TION AS THE PROCESS OF WORKING TO PROTECT SOMETHING VALUAB LE SO THAT IT IS NOT DAMAGED OR DESTROYED 11. FURTHER THE HYDERABAD BENCH OF TRIBUNAL IN THE CASE OF 3F OIL PALM AGROTECH(P.) LTD VS. ACIT (SUPRA) DEFINED THE SCOPE OF PRESERVATION ANDHELD AS UNDER: 23. THE NEXT STEP INVOLVED IS PRESERVATION AND IT I S SUBMITTED BY THE ASSESSEE THAT SINCE THE RATE I.T.A NOS. 351 & 352/ASR/2018 27 OF OXIDATION OF THE OIL INCREASES, WITH THE TEMPERA TURE OF STORAGE, THE TEMPERATURE OF THE OIL IS NORMALLY MAINTAINED AROUND 50 DEGREE CENTIGRADE USI NG LOW PRESSURE STEM HEATING COILS TO PREVENT SOLIDIFICATION AND FRACTIONATION. ACCORDING TO HIM, THIS ACTIVITY SATISFIES THE CONDITION OF PRESERVATION. 24. THE MEANING AND PURPOSE OF PRESERVATION IS, TO SEE THAT THE PRODUCT DOES NOT DETERIORATE AND MAINTAINS THE REQUIRED QUALITY AND STANDARD. IT IS NOT REQUIRED THAT ALL THE PROCESSES OR THE STEPS OF PRESERVATION, SHOULD BE COMPLICATED. SOME ITEMS MAY REQUIRE THE LEAST THE STEPS WHILE, SOME MAY REQUIRE A COMPLICATED PROCEDURE. AS LONG AS THE ASSESSEE IS MAINTAINING THE STANDARDS AND IS TAKING STEPS TO MAINTAIN SUCH STAN DARDS, IT CAN BE SAID THAT IT SATISFIES THE CONDITION OF PRESERVATION. THE LD. DR HAD RELIED UP ON THE CONTENTION OF THE ASSESSEE BEFORE THE A.O THAT THE CRUDE PALM OIL REQUIRES THE LEAST PRESERVATION AS IT IS A DURABLE COMMODITY. BUT THIS CONTENTION OF THE ASSESSEE ALONE CANNOT ME AN THAT THE ASSESSEE IS NOT TAKING ANY STEPS FOR PRESERVATION OF THE OIL. IT IS COMMON KNO WLEDGE THAT ALL ITEMS, PARTICULARLY FOOD ITEMS, HAVE AN EXPIRY DATE UNLESS THEY ARE PRESERVE D IN THE REQUIRED CONDITIONS. THEREFORE, WE ARE SATISFIED THAT THE ASSESSEE IS ALSO PRESERVING THE PALM OIL EXTRACTED FROM THE FRESH FRUIT BUNCHES OF OIL PALM FRUITS, AFTER THE PROCESS OF 'P RESSING AND EXTRACTION OF OIL'. .. 26. THE LAST OBJECTION OF THE REVENUE IS THAT THE E ND PRODUCT IS NOT A FRUIT BUT IT IS EDIBLE OIL OR KERNELS AND SHELLS WHICH ARE NOT CONSUMABLE GOODS, AND HENCE IT DOES NOT SATISFY THE CONDITION OF SECTION 80IB(11A). IN THE CASE OF DELNARUSTUM BO YCE INRE, THE AAR HAS ALSO HELD THAT THE END PRODUCT NEED NOT REMAIN IN THE SAME FORM AS THE RAW MATERIAL. IT MAY BE IN THE FORM OF JUICE OR CUT FRUITS OR EVEN OIL OR POWDER. AS LONG AS THE END PRODUCT IS DERIVED FROM THE FRUITS OR VEGETABLES, THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80IB(11A) OF THE ACT. IN THESE CIRCUMSTANCES, WE ARE SATISFIED THAT THE OIL PALM I S A FRUIT AND THAT IT UNDERGOES DIFFERENT PROCESSES BEFORE EXTRACTION OF OIL, AND THE PALM OI L IS PRESERVED UNDER ADJUSTED TEMPERATURE AND THEY ARE PACKED IN LARGE CONTAINER OR TANKS AND THEREFORE, THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80IB(11A) OF THE ACT. THE ASSESSEE'S APPEALS ARE ACCORDINGLY ALLOWED . (EMPHASIS SUPPLIED) 12. IN VIEW OF THE AFORESAID, ANY ACTIVITY UNDERTAKEN TO KEEP THE FRUIT/PRODUCT INTACT IN GOOD CONDITION AND FREE FROM ANY DAMAGE COMES UN DER THE DEFINITION OF PRESERVATION. THEREFORE, ACTIVITIES LIKE STORING THE GOODS IN THE REQUIRED CONDITIONS (E.G. PRESERVING AT A SPECIFIED TEMPERAT URE IN COLD STORAGE) SO THAT THE QUALITY OF ITEMS PARTICULARLY FOOD ITEMS, DOES NOT DETERIORATE WOULD COME UNDER THE PURVIEW OF PRESERVATION. IN THE PRESENT CASE SUGAR WAS USED AS PRESERVATIVE TO GIVE LONG LIFE TO AAM PAPAD. I.T.A NOS. 351 & 352/ASR/2018 28 PACKAGING 13. THE EXPRESSION PACKAGING HAS BEEN DEFINED IN VARIOUS STATUTES AND DICTIONARIES AS UNDER: - SECTION 2(X) OF THE PREVENTION OF FOOD ADULTERATION ACT, 1954 DEFINES PACKAGE AS ABOX, BOTTLE, CASKET, TIN-BARREL, CASE, RECEPTACLE, SACK, BAG, WRAPPER OR OTHER THING IN WHICH AN ARTICLE OF FOOD IS PLACED OR PACKED ; - SECTION 2(ZH) OF FOOD SAFETY AND STANDARDS ACT, 200 6 DEFINES PACKAGE AS A PRE-PACKED BOX, BOTTLE, CASKET, TIN, BARREL, CASE, POUCH, RECE PTACLE, SACK, BAG, WRAPPER OR SUCH OTHER THINGS IN WHICH AN ARTICLE OF FOOD IS PACKED; - FURTHER, THE TERM PACKAGING HAS BEEN DEFINED IN T HEMERRIAM WEBSTER AS AN ACT OR INSTANCE OF PACKAGING SOMETHING OR SOMEONE: SUCH AS : (A) THE ENCLOSING OF SOMETHING IN A CONTAINER OR COVERI NG DAMAGE CAUSED BY STATIC CHARGE DURING PACKAGING, STORING, AND SHIPPING; (B) THE PRESENTATION OF SOMETHING OR SOMEONE TO THE PUB LIC IN A WAY THAT IS DESIGNED TO BE ATTRACTIVE OR APPEALING - CAMBRIDGE DICTIONARY DEFINES PACKAGING AS THE MATERIALS IN WHICH OBJECTS ARE WRAPPED BEFORE BEING SOLD - OXFORD ENGLISH DICTIONARY DEFINES PACKAGING AS MATERIALS USED TO WRAP OR PROTECT GOODS THAT ARE SOLD IN SHOPS - COLLINS DICTIONARY HAS DEFINED THE TERM PACKAGING AS PACKAGING IS THE CONTAINER OR COVERING THAT SOMETHING IS SOLD IN . 14. FURTHER THE HYDERABAD BENCH OF TRIBUNAL IN THE CASE OF 3F OIL PALM AGROTECH (P.) LTD VS. ACIT (SUPRA) EXAMINED THE CONDITION OF PACKAGING IN A SIMILAR CASE ANDHELD AS UNDER: 25. THE THIRD CONDITION TO BE SATISFIED IS PACKAGING. T HE ASSESSEE IS PRESERVING AND MAINTAINING THE PALM OIL IN LARGE CONTAINERS / TANKS. AS RIGHTLY POINTED OUT BY THE LEARNED COUNSEL FOR THE ASSESSEE, PACKAGING CAN BE VARIED AND INCLUDES I.T.A NOS. 351 & 352/ASR/2018 29 THE SIMPLE BOXES TO LARGE CONTAINER/VESSEL. SINCE T HE ASSESSEE IS INVOLVED IN LARGE SCALE OPERATION, IT HAS TO STORE THE EXTRACTE D OIL IN TANKS. THEREFORE, WE ARE SATISFIED THAT ALL THE THREE PROCESSES NECESSARY FO R CLAIMING DEDUCTION U/S 80IB(11A) ARE SATISFIED BY THE ASSESSEE . 26. THE LAST OBJECTION OF THE REVENUE IS THAT THE E ND PRODUCT IS NOT A FRUIT BUT IT IS EDIBLE OIL OR KERNELS AND SHELLS WHICH ARE NOT C ONSUMABLE GOODS, AND HENCE IT DOES NOT SATISFY THE CONDITION OF SECTION 80IB(11A) . IN THE CASE OF DELNARUSTUM BOYCE INRE, THE AAR HAS ALSO HELD THAT THE END PROD UCT NEED NOT REMAIN IN THE SAME FORM AS THE RAW MATERIAL. IT MAY BE IN THE FOR M OF JUICE OR CUT FRUITS OR EVEN OIL OR POWDER. AS LONG AS THE END PRODUCT IS D ERIVED FROM THE FRUITS OR VEGETABLES, THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80IB(11A) OF THE ACT. IN THESE CIRCUMSTANCES, WE ARE SATISFIED THAT THE OIL PALM IS A FRUIT AND THAT IT UNDERGOES DIFFERENT PROCESSES BEFORE EXTRACTION OF OIL, AND THE PALM OIL IS PRESERVED UNDER ADJUSTED TEMPERATURE AND THEY ARE P ACKED IN LARGE CONTAINER OR TANKS AND THEREFORE, THE ASSESSEE IS ELIGIBLE FOR D EDUCTION U/S 80IB(11A) OF THE ACT. THE ASSESSEE'S APPEALS ARE ACCORDINGLY ALLOWED . (EMPHASIS SUPPLIED) 15. IN VIEW OF THE AFORESAID, IT CAN BE SEEN THAT PACKA GING HAS BEEN DEFINED AS AN ACTIVITY OF WRAPPING/PACKING/COVERING THE PRODUCT W ITH SOME MATERIAL TO DELIVER PRODUCTS TO CONSUMERS IN PERFECT CONDITION. IN CASE OF FOOD ITEMS, PACKAGING HELPS TO MAINTAIN FRESHNESS AND QUALITY OF FOOD ITE MS AND ALSO PREVENT THE DANGER OF ADULTERATION. 16. FROM THE PERUSAL OF THE THREE STEPS HEREIN ABOVE I T IS CLEAR THT THE MANGO PULP FOR THE PURPOSE OF MANUFACTURING THE FRUIT BASED RA W MATERIAL IS BLENDED WITH THE PRESERVER TAMARIND, MEETHA-MANGO PULP BASED AAM PAPAD, SPICE, IMLI AND THEREAFTER THE FINAL PRODUCT IN THE FORM OF AAM PAP AD IS PREPARED. THESHELFLIFE OF AAM PAPAD IS DIFFERENT THEN THE SHELL LIFE OF MA NGO. THE END PRODUCT I.E. THE AAM PAPAD IS DIFFERENT THEN THE RAW MATERIAL USED T O MANUFACTURED THE AAM PAPAD AND THE AAM PAPAD IS KNOWN IN THE COMMERCIAL WORLD AND ALSO IN THE FOOD INDUSTRY WITH DIFFERENT MEAN AND IS HAVING DIF FERENT TASTE AND QUALITIES. THEREFORE, TO SAY THAT THE MANUFACTURING OF AAM PAP AD IS MERELY PRESERVATION OF THE MANGO PULP, TO OUR MIND IS INCORRECT FINDING BY CIT(A) ,AS THE AAM I.T.A NOS. 351 & 352/ASR/2018 30 PAPAD IS A DIFFERENT FINISHED PRODUCT THEN THE MANG O PULP . THE MINISTRY OF FOOD & PROCESSING VIDE THE CIRCULAR (SUPRA ) HAS D ULY RECOGNIZED THE FACT AND VIDE GIVING THE REPLY TO THE ASSESSEE ON 24.10.2017 , DULY MENTIONED IN PARA 5.6 AT PAGE 13 TO THE FOLLOWING EFFECT: - 5.6 CERTIFICATE ISSUED BY MINISTRY OF FOOD PROCESSING : THE APPELLANT HAS RELIED HEAVILY UPON INFORMATION R ECEIVED BY IT UNDER RTI FROM MINISTRRY OF FOOD PROCESSING INDUSTR IES ON 24.10.2017. IN ORDER TO APPRECIATE THE IMPACT OF TH IS INFORMATION IT WOULD BE USEFUL TO REPRODUCE THE ENTIRE TEXT OF INF ORMATION AS UNDER: TOMATO KETCHUP, AAM PAPAD MANUFACTURED FROM MANGO/TAMRIND SLICE ARE COVERED UNDER THE FRUITS & VEGETABLE PROCESSING (F&VP). THE ABOVE ACTIVITIES OF F&VP ARE ELIGIBLE ACTIVITIE S FOR AVAILING GRANT IN AID UNDER THE SCHEME OF CREATION/EXPANSION OF FOOD PROCESSING AND PRESERVAT ION CAPACITIES. FOR DETAILED GUIDELINES YOU ARE REQUES TED TO VISIT OUR WEBSITE WWW.MOFPI.NIC.IN . THE ABOVE ACTIVITIES ARE COVERED UNDER THE SCHEME O F CREATION/EXPANSION OF FOOD PROCESSING & PRESERVATIO N CAPACITIES. DETAILED GUIDELINES MAY BE DOWNLOADED FROM THE MONISTRYS WEBSITE WWW.MOFPI.INC.IN. 17. AAM PAAPADHAD BEEN RECOGNIZED AS FOOD PROCESSING PR ODUCT BY THE MINISTRY AS CLEAR FROM THE WEBSITE OF MINISTRY BUT IS ALSO CLEA R FROM THE QUESTIONASKED BY THE ASSESSEE AND REPLY GIVEN TO THE ASSESSEE UNDER THE RTI THEIR LETTER DATED 17.10.2017 TO THE FOLLOWING EFFECT: I WISH TO START MANUFACTURING TOMATO KETCHUP FROM USING TOMATO JUICE/PUREE/PASTE PURCHASED FROM OTHER JUICE EXTRAC TOR/MANUFACTURER OF TOMATO PUREE AND TOMATO PASTE. ALSO I WISH TO MANUFACTURER FRUIT JUICES BY ADDING SUGAR PRESERVATIVES, TASTE ENHANCER(SPICE AND CONDIMENTS) ACIDITY REGULATOR ET C. AND BOTTLING OF THE SAME. I.T.A NOS. 351 & 352/ASR/2018 31 ALSO I WISH TO MANUFACTURE MANGO SLICE ANDTAMARIND SLICE GENERALLY KNOWN AS AAM PAPAD, IMLI PAPAD OR FRUIT LEATHER BY PURCHASIN G THE FRUIT PULP/JUICE/JUICE PASTE AND BY PROCESSING WITH ADDITIVES LIKE SUGAR S ALTS SPICES AS TASTE ENHANCERS AND PACK IN MY OWN BRAND NAME AS FRUIT PRODUCTS. QUESTIONN NO. 1: DO ABOVE PRODUCTS ARE FALL UNDER CATEGORY OF FRUIT AND VEGETABLE PROCESSING OR NOT, IF NOT PLEASE SPECIFY THE CATEGORY. QUESTION NO. 2: IF THE ABOVE PRODUCTS FALL IN CATE GORY OF FRUITS AND VEGETABLE PROCESSING, AM I ELIGIBLE FOR ALL BENEFITS AS DECLA RED BY MINISTRY OF FOOD PROCESSING SUCH AS SUBSIDY, INCOME TAX BENEFITS OR OTHERWISE. QUESTION NO. 3: PLEASE SPECIFY ALL BENEFITS IF I G O AHEAD IN THIS FILED AS THERE ARE LACK OF UNDERSTANDING FOR ME FROM MINISTRY WEBSITE. 18. THE REPLY OF THE FOOD AND PROCESSING MINISTRY WAS R ECEIVED BY THE ASSESSEE ON 24.10.2017, WHEREIN IT WAS REPLIED AS UNDER: - WITH REFERENCE TO YOUR ONLINE REQUEST DATED 17.10 .2017 RECEIVED BY THIS DIVISON OF THE MINISTRY ON 18.10.2017, SEEKING INFORMATION ON DETAILS AS MENTIONED BELOW: 1. TOMATO KETCHUP, AAM PAPAD MANUFACTURED FROM MANGO/T AMRIND SLICE ARE COVERED UNDER THE FRUITS & VEGETABLE PROCESSING (F& VP). 2. THE ABOVE ACTIVITIES OF F&VP ARE ELIGIBLE ACTIVITIE S FOR AVAILING GRANT IN AID UNDER THE SCHEME OF CREATION/EXPANSION OF FOOD PROC ESSING AND PRESERVATION CAPACITIES. FOR DETAILED GUIDELINES Y OU ARE REQUESTED TO VISIT OUR WEBSITE WWW.MOFPI.NIC.IN . 3. THE ABOVE ACTIVITIES ARE COVERED UNDER THE SCHEME O F CREATION/EXPANSION OF FOOD PROCESSING & PRESERVATION CAPACITIES. DETAILE D GUIDELINES, MAY BE DOWNLOADED FROM THE MINISTRYS WEBSITE WWW.MOFPI.NIC.IN . 19. FROM THE REPLY OF THE FOOD AND PROCESSING MINISTRY , IT IS CLEAR THAT THE FOOD AND PROCESSING INDUSTRY IS CONSIDERING THAT TH E AAM PAPAD MANUFACTURING FROM MANGO/TAMARIND, SLICE ARE COVERED UNDER FOOD A ND VEGETABLE PROCESSING. IN OUR VIEW ONCE THE MINISTRY OF FOOD AND PROCESSIN G AND MAKING A DISTINCTION BETWEEN MANGO AND AAM PAPAD, THE SUBJECT MATTER BEF ORE US AND TREATING IT AS A SEPARATE DISTINCT FOOD PRODUCT, THEN IT WILL NOT BE IN THE REALM OF THE ASSESSING I.T.A NOS. 351 & 352/ASR/2018 32 OFFICER OR BEFORE THE CIT(A) TO TAKE A CONTRARY VIE W. THE CLASSIFICATION, IS REQUIRED TO BE MADE BY THE FOOD AND PROCESSING INDU STRY ON THE BASIS OF THE DUE DILIGENCE AND STUDY OF THE VARIOUS PROCESSES INVOLV ED IN MANUFACTURING OF THE AAM PAPAD. WE ARE OF THE OPINION THAT ONCE AN EXPE RT BODY DECIDES AN ISSUE AND CAME TO THE CONCLUSION THAT AAM PAPAD IS A SEPA RATE AND DISTINCT PRODUCT INVOLVING PROCESS, PACKING AND MANUFACTURING. THER EFORE, IT WILL BE INCORRECT FORTHE ASSESSING OFFICER/CIT(A) TO TAKE A CONTRARY VIEW. IN THE LIGHT OF THE ABOVE, WE DO NOT FIND ANY SUBSTANCE IN THE ORDER PA SSED BY THE LD. CIT(A). 21 . FURTHER, WE MAY LIKE TO POINT OUT THAT THE AHM EDABAD TRIBUNAL IN THE MATTER OF MS. DELNA RUSTOM BOYCE (2009) 185 TAXMAN 0180 IN PA RAGRAPH 10 IT WS HELD AS UNDER: - 10. PROCESSING AND PRESERVATION ARE TWO DISTINCT E XPRESSIONS USED SIDE BY SIDE. PROCESSING MAY BE FOR THE LIMITED PURPOSE OF PRESER VATION OF FRUITS WITHOUT BRINGING ABOUT MUCH CHANGE IN THE FORM OF THE FRUIT . BUT, PROCESSING IN THE CONTEXT IN WHICH IT OCCURS OUGHT NOT TO BE CONFINED ONLY TO THE OPERATIONS THAT WOULD ENSURE THE PRESERVATION OF FRUITS AS THEY ARE OR IN THE FORM OF SLICES. IN OTHER WORDS, THE EXPRESSION SHOULD NOT BE CONFINED TO MINIMAL PROCESSING THAT WOULD NOT CHANGE THE IDENTITY OF THE FRUIT. IF PRO CESSING AND PRESERVATION IS INTENDED TO BE GIVEN TO AGRO PROCESSING INDUSTRIES WILL OPERATE IN A VERY LIMITED SPHERE, THEREBY DEFEATING THE VERY OBJECT OF THE PR OVISION. THE EXTRACTION OF JUICE AND OIL FROM THE SUBSTANCES MEANT FOR PRESERVATION WOULD LEGITIMATELY FALL WITHIN THE SWEEP OF THE EXPRESSION PROCESSING. THE FACT THAT THE FRUIT ASSUMES A DIFFERENT FORM OR THAT A SERIES OF OPERATIONS ARE I NVOLVED IN PREPARING THE MIXED JUICES AND CONCENTRATES WHICH COULD BE PRESERVED FO R LONG DOES NOT TAKE IT OUT OF BOUNDS OF PROCESSING. PROCESSING IN ITS WIDER SENS E WOULD STILL BE APTLY APPLICABLE. 20. FURTHER, ASSESSEE WAS GRANTED THE BENEFIT OF 80IB F OR AY 2010-11 , 2011-12 AND 2012-13 BY PASSING THE ORDER U/S 143(3)/ 143(1) OF THE ACT AND SIMILARLY FOR THE AY 2018-19 BENEFIT OF 80IB WAS EXTENDED TO THE ASSESSEE UNDER THE FACELESS I.T.A NOS. 351 & 352/ASR/2018 33 SCHEME ALSO BY PASSING THE ORDER UNDER SECTION 143( 3 ) OF THE ACT. IN OUR CONSIDERED OPINION ONCE IN THE EARLIER ASSESSMENT Y EARS AS WELL AS IN SUBSEQUENT ASSESSMENT YEAR REVENUE HAS EXTENDED THE BENEFIT TO THE ASSESSEE, THEN THE REVENUE / RERPONDENTIS PREVENTED FROM TAKING A CONT RARY STAND IN THE ASSESSMENT YEARS UNDER CONSIDERATION , MORE PARTICU LARLY WHEN ACTIVITIES OF THE ASSESSEE CONTINUOUS TO THE SAME . IN OUR VIEW THE PREDICTABILITY AND CONSISTENCY IN THE TAX ADJUDICATION IS THE HALLMARK OF SMOOTH A ND TRANSPARENT ADJUDICATION AND UNLESS THERE WAS PERVERSITY IN THE DETERMINATIO N OF THE TAX DISPUTE ON THE EARLIER/ SUBSEQUENT YEARS. 21. IN VIEW OF THE ABOVE DISCUSSIONS AND ALSO MAINTAINI NG THE CONSISTENCY IN TAX ADJUDICATION, BYN FOLLOWING THE ORDER OF THE ASSESS ING OFFICER FOR THE PREVIOUS YEAR I.E. 2010-11, 2011-12 AND 2012-13, WE ARE OF T HE OPINION THAT THE ADDITION MADE BY THE ASSESSING OFFICER AND SUSTAINED BY THE LD. CIT(A) ARE REQUIRED TO BE DELETED AS THE ASSESSEE IS ENTITLED TO THE BENEF IT OF 80IB(11A). 22. NO OTHER GROUND/S WERE RAISED BEFORE US . 23. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 14/10/2021. SD/- SD/- (DR. M.L. MEENA) (LALIET KUMAR) ACCOUNTANT MEMBER J UDICIALMEMBER DATED 14/10/2021 *GP/SR. P.S.* I.T.A NOS. 351 & 352/ASR/2018 34 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY BY ORDER