ACIT, Thanjavur V. M/s. Muthupillai's 1918, Karaikal

ITA 895/CHNY/2009

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64548 (ITAT-CHENNAI)
• Duration Of Justice: 3 year(s) 5 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 18-10-2012
• Assessment Year: 2004-2005
• Appeal Filed On: 03-06-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: V D GOPAL
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI BEFORE SHRI ABRAHAM P.GEORGE, ACCOUNTANT ME MBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER ITA NOS.895 & 896/MDS/2009 & 642/MDS/2011 ( ASSESSMENT YEARS: 2004-05, 2005-06 & 2006-07 ) ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-I, THANJAVUR. VS. M/S. MUTHUPILLAIS 1918 NO.96, THIRUNALLAR ROAD, KARAIKAL. PAN: AAKFM2034Q (APPELLANT) (RESPONDENT) APPELLANT BY : MR. GURU BASHYAM, JCIT RESPONDENT BY : MR. V.D.GOPAL, ADVOCATE DATE OF HEARING : 18 TH OCTOBER, 2012 DATE OF PRONOUNCEMENT : 23 RD NOVEMBER, 2012 O R D E R PER VIKAS AWASTHY, JM: THE PRESENT SET OF THREE APPEALS I.E. ITA NOS.895 & 896/MDS/2009 AND ITA NO.642/MDS/2011 RELEVANT TO TH E ASSESSMENT YEARS 2004-05, 2005-06 AND 2006-07 RESPECTIVELY HAVE BEEN FILED BY THE REVENUE IMPU GNING THE ORDERS OF THE CIT(A), TIRUCHIRAPALLI. SINCE COMMON ISSUE IS INVOLVED IN ALL THE THREE APPEALS, THE SAME ARE TAK EN UP TOGETHER FOR ADJUDICATION. ITA NO.895 & 896/MDS/2009 & ITA NO.642/MDS/2011 2 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS RUNNING A BAKERY. THE ASSESSEE WHILE FILING THE RET URN OF INCOME RELEVANT TO THE ASSESSMENT YEAR 2004-05 CLAI MED DEDUCTION UNDER SECTION 80IB. UPTO THE ASSESSMENT Y EAR 2003-04, THE FIRM WAS ASSESSED UNDER THE NAME AND S TYLE OF M/S. V.P.MUTHUPILLA & SONS. IN THE PERIOD RELEVANT TO THE ASSESSMENT YEAR 2004-05, A NEW FIRM CALLED M/S. MUT HUPILLAIS 1918 WAS FORMED WITH NEW MACHINERIES AND WAS REGIS TERED WITH THE DIRECTORATE OF INDUSTRIES AND COMMERCE AS A SMALL SCALE UNDERTAKING. THE ASSESSING OFFICER WHILE FIN ALIZING THE ASSESSMENT FOR THE YEAR 2004-05 OBSERVED THAT THE A SSESSEE IS RUNNING A NON-VEGETARIAN RESTAURANT ON THE FIRST FLOOR OF THE BAKERY PREMISES. IN ADDITION THE ASSESSEE IS ALSO T RADING IN ALL KINDS OF SWEETS WHICH ARE AVAILABLE IN NORMAL SWEE T STALL. THE ASSESSING OFFICER FURTHER OBSERVED THAT THE SIN CE ASSESSEE IS NOT MAINTAINING SEPARATE BOOKS OF ACCOU NT FOR THE MANUFACTURE OF BAKERY PRODUCTS, THEREFORE, IT IS NO T POSSIBLE TO ASSESS THE INCOME FROM BAKERY PRODUCTS VIZ. BREAD , BISCUIT ETC. AND THUS, THE DEDUCTION CLAIMED UNDER SECTION 80IB IS NOT ALLOWED. ITA NO.895 & 896/MDS/2009 & ITA NO.642/MDS/2011 3 3. AGGRIEVED AGAINST THE ASSESSMENT ORDER, THE ASSE SSEE PREFERRED AN APPEAL BEFORE THE CIT(A). THE CIT(A) P ARTLY ALLOWED THE APPEAL OF THE ASSESSEE HOLDING THAT THE ASSESSEE IS IN THE BUSINESS OF TRADING OF SWEETS AND MANUFAC TURING OF BAKERY ITEMS. SINCE SEPARATE BOOKS OF ACCOUNTS WERE NOT MAINTAINED BY THE ASSESSEE, THE CIT(A) RESTRICTED T HE BENEFIT UNDER THE PROVISIONS OF SECTION 80IB(4) TO 85% OF T HE TOTAL CLAIM. FOR THE ASSESSMENT YEAR 2005-06 AND 2006-07, THE CIT(A) PASSED SIMILAR ORDERS. AGGRIEVED AGAINST THE ORDERS PASSED BY THE CIT(A), THE REVENUE HAS COME IN SECON D APPEAL BEFORE THE TRIBUNAL IMPUGNING THE ORDERS OF THE CIT(A) FOR ALL THE AFOREMENTIONED THREE ASSESSMENT YEARS. 4. THE D.R. APPEARING ON BEHALF OF THE REVENUE SUBM ITTED THAT THE ASSESSEE IS RUNNING BAKERY BUSINESS. THE B USINESS OF BAKERY CANNOT BE TERMED AS MANUFACTURE OR PRODUC TION AS PER THE PROVISIONS OF SECTION 80IB(4). THE D.R. POI NTED OUT THAT THE CIT(A) IN HIS ORDER HAS MENTIONED THAT TH E ASSESSEE COULD NOT STAND THE TEST OF MANUFACTURE AS DEFINED BY THE HONBLE SUPREME COURT AND FURTHER THE SWEETS MANUF ACTURED ARE AVAILABLE AS IN NORMAL SWEET STALL, YET THE C IT(A) GRANTED ITA NO.895 & 896/MDS/2009 & ITA NO.642/MDS/2011 4 THE BENEFIT OF SECTION 80IB(4) TO THE ASSESSEE. THE LEARNED DR CONTENDED THAT THE ASSESSEE IS RUNNING A RESTAUR ANT ALONG WITH BAKERY SHOP AND THE ASSESSEE IS NOT MAINTAIN ING SEPARATE BOOKS OF ACCOUNTS FOR THE MANUFACTURE OF B READ, BISCUITS ETC., THEREFORE, THE ASSESSEE CANNOT CLAIM THE BENEFIT OF SECTION 80IB. THE DR POINTED OUT THAT THE CIT(A) IN AN ARBITRARY MANNER HAS BIFURCATED THE CLAIM GRANTING BENEFIT ON 85% OF THE DEDUCTION UNDER SECTION 80IB(4). TO SUPP ORT HIS SUBMISSIONS, THE D.R. RELIED ON THE JUDGEMENT OF TH E HONBLE SUPREME COURT OF INDIA IN THE CASE OF INDIAN HOTELS CO.LTD., VS. ITO REPORTED AS 112 TAXMAN 46 (SC), THE JUDGEME NTS OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS . FIESTA RESTAURANTS LTD. REPORTED AS 136 TAXMAN 333(MAD) A ND IN THE CASE OF CWT VS. P.DEVASHAYAM REPORTED AS 236 IT R 885(MAD). THE D.R. SUBMITTED THAT THE HONBLE SUPR EME COURT OF INDIA IN INDIAN HOTELS CO.LTD., (SUPRA) H AS HELD THAT IN CASE OF PREPARING FOOD PACKAGES OR SELLING THE S AME OR PREPARING FOODSTUFFS FOR SERVING IN THE HOTEL THERE IS NO QUESTION OF MANUFACTURE OR PRODUCTION. THE RAW MATE RIAL IS AT THE MOST PROCESSED SO AS TO MAKE IT EATABLE. THE W ORD ITA NO.895 & 896/MDS/2009 & ITA NO.642/MDS/2011 5 MANUFACTURE HAS VARIOUS SHADES OF MEANING BUT UN LESS DEFINED UNDER THE ACT, IT IS TO BE INTERPRETED IN T HE CONTEXT OF THE OBJECT AND THE LANGUAGE USED IN THE SECTIONS. I N THE CONTEXT OF THE PROVISIONS WHICH DEAL WITH GRANT OF INVESTMENT REBATE OR DEDUCTION UNDER SECTION 80J, IT IS APPARE NT THAT IT IS USED TO MEAN PRODUCTION OF A NEW ARTICLE OR BRINGIN G INTO EXISTENCE SOME NEW COMMODITY BY AN INDUSTRIAL UNDER TAKING. IT WOULD NOT BE APPLICABLE IN CASES WHERE ONLY PROC ESSING ACTIVITY IS CARRIED OUT. THE DR SUBMITTED THAT THE JURISDICTIONAL HIGH COURT IN THE CASE OF FIESTA RES TAURANTS LTD., (SUPRA) HAS RELIED ON THE JUDGEMENT OF THE HO NBLE SUPREME COURT IN THE CASE OF INDIAN HOTELS CO.LTD(S UPRA) TO HOLD THAT ASSESSEE IS NOT ENTITLED TO INVESTMENT AL LOWANCE UNDER SECTION 32A OF THE ACT ON MACHINERIES INSTALL ED IN A RESTAURANT. 5. ON THE OTHER HAND, SHRI GOPAL APPEARING ON BEHAL F OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS A SMAL L SCALE INDUSTRIAL UNDERTAKING ENJOYING TAX HOLIDAY FOR THE SALE OF BAKERY PRODUCTS SUCH AS BISCUITS, BREAD, CAKES, SW EETS AND SAVOURIES UNDER PGST ACT, 1967. THE ASSESSEE BEING SSI ITA NO.895 & 896/MDS/2009 & ITA NO.642/MDS/2011 6 UNIT LOCATED IN THE STATE OF PONDICHERRY, AN INDUST RIALLY BACKWARD STATE SPECIFIED IN THE EIGHTH SCHEDULE HAS CLAIMED DEDUCTION OF THE PROFITS AND GAINS DERIVED FROM SU CH UNDERTAKING UNDER THE PROVISIONS OF SECTION 80IB OF THE ACT. THE ASSESSEE HAS PLACED ON RECORD CERTIFICATES ISS UED BY DIRECTORATE OF INDUSTRIES & COMMERCE, GOVERNMENT OF PONDICHERRY TO SUPPORT ITS CONTENTION THAT THE ASSE SSEE IS A SMALL SCALE INDUSTRY REGISTERED. THE SAID CERTIFICA TES ARE PLACED AT PAGE 37 AND 38 OF THE PAPER BOOK. THE LEA RNED COUNSEL CONTENDED THAT THE ASSESSEE IS NOT RUNNING ANY RESTAURANT. EVEN THE SWEETS SOLD BY THE ASSESSEE IN ITS SHOP ARE OF NEGLIGIBLE QUANTITY. THE SWEETS ARE MANUFACT URED AS A NEW PRODUCT OUT OF RAW MATERIAL FROM ITS OWN INDUST RIAL UNDERTAKING AND HENCE QUALIFY FOR DEDUCTION. CERT AIN ITEMS LIKE MURUKKU, IDLI POWDER, OIL CHIPS ETC. ARE PURCH ASED FROM OUTSIDE FOR TRADING WHICH ARE SUPPORTED BY BILLS. THE REVENUE FROM SALE OF SUCH ITEMS IS ALSO NEGLIGIBLE. THE COU NSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT THE ASSESSEE HAD I NSTALLED A NEW MACHINERY FOR MANUFACTURE OF BISCUITS. THE ASSE SSEE HAS ALSO PLACED ON RECORD PHOTOCOPY OF ASSESSMENT ORDER ITA NO.895 & 896/MDS/2009 & ITA NO.642/MDS/2011 7 RELEVANT TO THE ASSESSMENT YEAR 2004-05 AND 2005-06 UNDER PGST ACT, 1967 TO SHOW THAT THE ASSESSEE HAS BEEN G RANTED EXEMPTION UNDER THE PROVISIONS OF PONDICHERRY GENER AL SALES TAX ACT, 1967. THE COUNSEL FOR THE ASSESSEE SUBMITT ED THAT THE CASE OF THE ASSESSEE IS SQUARELY COVERED BY THE JUDGEMENT OF THE HONBLE HIGH COURT OF JAMMU & KASH MIR IN THE CASE OF CIT VS. PANKAJ JAIN PROP. AAGAM FOOD IN DUSTRIES REPORTED AS 152 TAXMAN 80 (J &K). THE HONBLE HIGH COURT WHILE ADJUDICATING THE SIMILAR ISSUE HAS ALSO CONS IDERED THE JUDGEMENT OF THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF INDIAN HOTELS CO.LTD., (SUPRA). THE COUNSEL FOR THE ASSESSEE ALSO RELIED ON THE JUDGEMENT OF THE HONBL E SUPREME COURT OF INDIA IN THE CASE OF ASPINWALL & C O.LTD. VS. CIT REPORTED AS 118 TAXMAN 771(SC), THE ORDER OF T HE CO- ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF STERL ING AGRO PRODUCTS PROCESSING (P) LTD. VS. ACIT REPORTED AS 4 8 SOT 80(CHENNAI) AND THE JUDGEMENT OF THE HONBLE GUJARA T HIGH COURT IN THE CASE OF CIT VS. SIDRAL FOOD (P) LTD., REPORTED AS 154 TAXMAN 412(GUJ). THE COUNSEL FOR THE ASSESSEE CONTENDED THAT THE PROCESS OF MAKING BREAD AND BISC UITS ITA NO.895 & 896/MDS/2009 & ITA NO.642/MDS/2011 8 INVOLVE MANUFACTURING PROCESS AS VARIOUS INGREDIENT S VIZ., MAIDA, SUGAR, YEAST ETC. HAVE TO GO THROUGH PROCESS ING AND ULTIMATE PRODUCT HAS DIFFERENT NAME AND CHARACTER F ROM THE INPUTS USED IN MANUFACTURING THE SAME. THE COUNSEL FOR THE ASSESSEE STATED THAT EVEN THE REGISTRATION CERTIFI CATE ISSUED BY THE DIRECTORATE OF INDUSTRIES & COMMERCE, PONDIC HERRY HAS SPECIFICALLY MENTIONED THE NATURE OF TRADE AS MANU FACTURE OF BREAD, BISCUITS, CAKES, SWEETS AND SAVOURIES. THE COUNSEL FOR THE ASSESSEE STRONGLY SUPPORTED THE ORDER OF TH E CIT(A) AND PRAYED FOR DISMISSAL OF THE APPEALS OF THE REVE NUE. 6. WE HAVE HEARD THE SUBMISSIONS MADE BY BOTH THE PARTIES. WE HAVE ALSO PERUSED THE ORDERS PASSED BY THE AUTHORITIES BELOW AND THE JUDGEMENTS/ORDERS REFERRE D TO BY THE RESPECTIVE SIDES. THE CIT(A) IN HIS ORDER AFTE R PERUSING THE RECORDS HAVE CONCLUDED THAT THE ASSESSEE IS NOT RUNNING ANY RESTAURANT. THE LEARNED DR COULD NOT SHOW ANY DOCUMENT OR EVIDENCE TO CONTROVERT THE FINDINGS OF THE CIT(A). 7. AS REGARDS THE QUESTION OF MANUFACTURE IS CONC ERNED, THE COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE PRO CESS OF MAKING BREAD, BISCUIT AND OTHER BAKERY PRODUCTS AM OUNTS TO ITA NO.895 & 896/MDS/2009 & ITA NO.642/MDS/2011 9 MANUFACTURING PROCESS AS THE FINAL PRODUCT I.E. BRE AD, BISCUIT ETC. ARE DIFFERENT FROM THE RAW MATERIAL LIKE FLOUR , MAIDA, SUGAR, YEAST ETC. USED IN MAKING OF BREAD, BISCUITS ETC. TO SUPPORT HIS CONTENTIONS, THE COUNSEL HAS RELIED ON THE JUDG EMENT OF THE HONBLE HIGH COURT OF JAMMU & KASHMIR IN THE C ASE OF PANKAJ JAIN (SUPRA). 8. A PERUSAL OF THE JUDGEMENT OF THE HONBLE HIGH COURT OF JAMMU & KASHMIR IN THE CASE OF PANKAJ JAIN (SUPRA) SHOWS THAT THE HONBLE HIGH COURT WHILE ADJUDICATING THE ISSUE ALSO CONSIDERED THE JUDGEMENT OF THE HONBLE SUPREME COU RT OF INDIA IN INDIAN HOTELS CO.LTD.(SUPRA). THE HONBLE HIGH COURT HAS DISTINGUISHED THE JUDGEMENT OF HONBLE APEX COU RT ON THE GROUND THAT THE ISSUE UNDER CONSIDERATION BEFORE TH E HONBLE SUPREME COURT PERTAINED TO FLIGHT KITCHEN WHICH WA S BEING RUN ALONG WITH HOTEL AND WAS ANCILLARY TO HOTEL BUS INESS. THEREFORE, THE HONBLE SUPREME COURT DID NOT CONSI DER IT TO BE A SEPARATE INDUSTRIAL UNDERTAKING WITHIN THE MEA NING OF SECTION 80J. THE HONBLE HIGH COURT OF JAMMU & KASHMIR IN THE CASE OF PANKAJ JAIN (SUPRA) HAD ADJUDICATED AN ISS UE, SIMILAR ITA NO.895 & 896/MDS/2009 & ITA NO.642/MDS/2011 10 TO THE CASE IN HAND, WHEREIN THE ASSESSEE WAS ENGA GED IN THE BUSINESS OF PREPARATION OF BREAD AND HAD CLAIME D DEDUCTION UNDER SECTION 80IB. THE ASSESSING OFFICER HAD DISALLOWED THE DEDUCTION HOLDING THAT NEITHER THE A SSESSEE IS MANUFACTURING NOR PRODUCING ANY ARTICLE OR THING WH ICH IS A PRE-REQUISITE FOR ASSESSEE TO CLAIM DEDUCTION. THE CIT(A) UPHELD THE VIEW TAKEN BY THE ASSESSING OFFICER. THE TRIBUNAL SET ASIDE THE ORDER OF THE LOWER AUTHORITIES AND HE LD THAT THE ASSESSEE IS AN INDUSTRIAL UNDERTAKING WITHIN THE ME ANING OF SECTION 80IB AND THEREFORE, ENTITLED TO DEDUCTION U NDER SECTION 80IB. THE THE HONBLE HIGH COURT OF JAMMU & KASHMIR WHILE UPHOLDING THE ORDER OF THE TRIBUNAL H AS OBSERVED AS UNDER:- 16. THE PROCESS ADMITTEDLY ENVISAGES NINE STEPS WHEREBY MAIDA, SUGAR, YEAST AND OTHER INGREDIENTS ARE PROCESSED AND PUT TO PASS THROUGH VARIOUS STAGES OF MECHANICAL PROCESS WITH THE AID OF POWER, LIKE MIXING, ROUNDING, PROVING, MOULDING, FERMENTING, BAKING, COOLING, SLICING ETC. IF THE TE ST LAID DOWN BY THE SUPREME COURT IN ITS VARIOUS JUDGEMENTS WAS APPLIED TO THIS PROCESS, WE ARE LEFT WITH NO DOUBT THAT THIS WAS A MANUFACTURING PROCESS AND THE ASSESSEE WAS MANUFACTURING BREAD AND NOT PROCESSING IT, BECAUSE THE WHOLE PROCESS OF CONVERSION OF THE RAW MATERIAL ITA NO.895 & 896/MDS/2009 & ITA NO.642/MDS/2011 11 UNDOUBTEDLY LEADS TO PRODUCTION OF A NEW THING I.E. , THE BREAD IN PLACE OF THE ORIGINAL INGREDIENTS LIKE MAIDA, SUGAR, YEAST ETC. THE RAW MATERIAL BEFORE PROCESSING IS ALTOGETHER DIFFERENT AND AFTER ITS CONVERSION, ITS NATURE, CHARACTER AND USE UNDERGOES A TOTAL CHANGE LEADING TO THE PRODUCTION OF A NEW THING BREAD. THEREFORE, IT CANNOT BE SAI D THAT UNBACKED MATERIALS, I.E. MAIDA, SUGAR, YEAST, ETC. RETAIN THEIR CHARACTER EVEN AFTER CONVERSION INTO A BREAD, INVOLVING PROCESSING ONLY. 9. THE ASSESSEE HAS ALSO RELIED ON THE JUDGEMENT OF THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF ASPIN WALL & CO.LTD. (SUPRA), WHEREIN THE HONBLE SUPREME COURT HAD HELD THAT THE PROCESSING OF RAW BERRIES INTO COFFEE BEAN S READY FOR CONSUMPTION AMOUNTS TO MANUFACTURING ACTIVITY. THE CO- ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF STERL ING AGRO PRODUCTS PROCESSING (P) LTD., (SUPRA) WHILE DEALING WITH THE QUESTION: WHETHER THE ASSESSEE COMPANY WAS ENGAGED IN THE MANUFACTURE OF GHERKIN PICKLES?; HELD THAT THE PROC ESS OF MAKING PICKLES AMOUNTS TO PROCESSING, HENCE THE ASS ESSEE WAS ENTITLED FOR THE BENEFIT UNDER THE PROVISIONS O F SECTION 10B. THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF CIT VS. N.C.BUDHARAJA & CO. REPORTED AS 204 ITR 412 HAS LAID ITA NO.895 & 896/MDS/2009 & ITA NO.642/MDS/2011 12 DOWN THE TEST FOR DETERMINING WHETHER MANUFACTURE C AN BE SAID TO HAVE BEEN TAKEN PLACE; WHETHER THE COMMODIT Y WHICH WAS SUBJECTED TO THE PROCESS OF MANUFACTURE CAN NO LONGER BE REGARDED AS THE ORIGINAL COMMODITY BUT IS RECOGN IZED IN THE TRADE AS A NEW AND DISTINCT COMMODITY. IF THE S AME TEST IS APPLIED IN THE INSTANT CASE, IT CAN BE SAFELY HELD THAT THE ASSESSEE IS ENGAGED IN MANUFACTURING. RAW MATERI AL OR INPUTS USED IN THE MANUFACTURING OF FINAL COMMODITY , AFTER GOING THROUGH VARIOUS PROCESSES HAS DIFFERENT NAME , USE AND THE FINAL PRODUCT IS USED FOR THE PURPOSE DIFFERENT FROM THE INPUTS/RAW MATERIALS. THEREFORE, WE ARE OF THE CONS IDERED OPINION THAT THE ASSESSEE IS ENTITLED FOR THE BENEF IT UNDER THE PROVISIONS OF SECTION 80IB(4). 10. BE THAT AS IT MAY, A PERUSAL OF ASSESSMENT ORD ER SHOWS THAT THE ASSESSING OFFICER WHILE WITHDRAWING THE B ENEFIT UNDER SECTION 80IB HAS NOT RAISED THE QUESTION WITH REGARD TO THE MANUFACTURING ACTIVITY OF THE ASSESSEE. THE ASS ESSING OFFICER IN PARA 2.1 HAS STATED THAT THE ASSESSEE IS RUNNING A NON-VEGETARIAN RESTAURANT IN FIRST FLOOR OF THE BAK ERY PREMISES AND THAT THE ASSESSEE HAS NOT MAINTAINED SEPARATE B OOKS OF ITA NO.895 & 896/MDS/2009 & ITA NO.642/MDS/2011 13 ACCOUNTS FOR THE MANUFACTURE OF BREAD, CAKE AND BIS CUITS THEREFORE ESTIMATION OF PROFITS IS NOT POSSIBLE. THE ABOVE OBSERVATIONS CLEARLY SHOW THAT THE ASSES SING OFFICER HAS ADMITTED THE FACT THAT THE ASSESSEE IS ENGAGED IN THE MANUFACTURING PROCESS. THE ASSESSING OFFICER H AS DENIED THE BENEFIT OF SECTION 80IB TO THE ASSESSEE FOR THE REASON THAT APART FROM MANUFACTURING, THE ASSESSEE IS ALSO CARRYING OTHER BUSINESS ACTIVITY FOR WHICH NO SEPAR ATE BOOKS OF ACCOUNTS ARE MAINTAINED AND IT WAS DIFFICULT TO MAKE ESTIMATION OF THE PROFITS ARISING FROM MANUFACTURIN G ACTIVITY. TO DENY THE BENEFIT ALTOGETHER UNDER SECTION 80IB O N THE GROUND THAT NO SEPARATE BOOKS OF ACCOUNTS ARE MAINT AINED FOR MANUFACTURING ACTIVITY TO OUR MIND WOULD BE UNJUSTI FIED, ESPECIALLY, WHEN THE ASSESSEE HAS SET UP A SMALL SC ALE UNDERTAKING IN A DECLARED BACKWARD AREA. THE CIT(A) IN ITS WISDOM ON THE BASIS OF TURNOVER FROM TRADING ACTIVI TY AND MANUFACTURING ACTIVITY HAS DISALLOWED THE CLAIM OF THE ASSESSEE TO THE EXTENT OF 15%. WE ARE IN CONSONANCE WITH THE FINDINGS OF THE CIT(A). ITA NO.895 & 896/MDS/2009 & ITA NO.642/MDS/2011 14 11. IN VIEW OF THE REASONS RECORDED ABOVE, WE UPHO LD THE FINDINGS OF THE CIT(A) AND DISMISS ALL THE THREE APPEALS OF THE REVENUE. ORDER PRONOUNCED IN THE OPEN COURT ON FRIDAY, THE 23 RD DAY OF NOVEMBER, 2012 AT CHENNAI. SD/- SD/- (ABRAHAM P.GEORGE) ( VIKAS AWASTHY) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED THE 23 RD NOVEMBER, 2012. SOMU COPY TO: (1) APPELLANT (4) CIT(A) (2) RESPONDENT (5) D.R. (3) CIT (6) G.F.