ACIT, Central Circle-2(1), Kolkata, Kolkata V. M/s Amricon Agrovat Pvt. Ltd., Kolkata

ITSSA 131/KOL/2016

• Counselvise Citation: [2017] 122 COUNSELVISE.COM (IT) 3286 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 12 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 05-04-2017
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 23-11-2016
• Court: TRIBUNAL
• Department Lawyers: G MALLIKARJUNA
• Assessee Lawyers: D S DAMLE
• Section: 80IB; 10

Judgement Text

IT(SS)A.NO.131/KOL/2016-M/S. AMRICON AGROVAT (P) LT D. A.Y.2010-11 1 IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH 'C', KO LKATA [BEFORE HON'BLE SRI N.V.VASUDEVAN, JM & HON'BLE SRI M.BALAGANESH, AM] IT(SS) A NO 131/KOL/2016 ASSESSMENT YEAR : 2010-11 A.C.I.T., CENTRAL CIRCLE-2(1) -VS- M/S. AMRICON AGROVAT (P).LTD., KOLKATA KOLKATA (PAN AADCA 1610 Q) (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI.G.MALLIKARJUNA CIT DR FOR THE RESPONDENT: SHRI D.S.DAMLE, FCA DATE OF HEARING : 22.3.2017 DATE OF PRONOUNCEMENT : 05.04.2017. ORDER PER SHRI N.V.VASUDEVAN, JM THIS IS AN APPEAL FILED BY THE REVENUE AGAINST ORD ER DATED 27.9.2016 OF CIT(A)-20, KOLKATA, RELATING TO AY 2010-11. 2. THE GROUNDS OF APPEAL RAISED BY THE REVENUE IN THIS READS AS FOLLOWS: (I) THAT THE LD. CIT(A) HAS ERRED IN ACCEPTING THA T THE TERM 'MANUFACTURE' OCCURRING IN THE CONTEXT OF SECTION 80-IB DOES NOT NECESSARILY REQUIRE THAT THE END PRODUCT OF THE MANUFACTURING PROCESS IS TO BE COMPL ETELY DIFFERENT FROM THE INGREDIENTS, AS REGARDS ITS CHEMICAL COMPOSITION, I NTEGRAL STRUCTURE OR ITS USE. (II) THAT THE LD. CIT(A) HAS ERRED IN ACCEPTING THA T THE PROCESS OF MANUFACTURING OF POULTRY FEEDS DOES NOT AMOUNT TO MERE MIXING TOG ETHER OF ALL DIFFERENT INGREDIENTS, WITHOUT INVOLVING ANY CHANGE IN THE CH EMICAL COMPOSITION OF THE INGREDIENTS. (III) THAT THE LD. CIT(A) HAS ERRED IN ACCEPTING TH AT THE PROCESS OF PREPARATION OF POULTRY FEEDS AMOUNT TO PRODUCTION OF AN ARTICLE WI THIN THE MEANING OF SECTION 80IB. (IV) THAT THE LD. CIT(A) HAS ERRED IN ALLOWING THE ENTIRE AMOUNT OF RS.73,44,900/- CLAIMED AS DEDUCTION U/S 80-IB. IT(SS)A.NO.131/KOL/2016-M/S. AMRICON AGROVAT (P) LT D. A.Y.2010-11 2 (V) THAT THE LD. CIT(A) HAS ERRED IN DIRECTING THE A.O. TO NET OFF THE INTEREST INCOME CREDITED IN THE PROFIT AND LOSS ACCOUNT OF T HE ELIGIBLE UNDERTAKING AGAINST THE INTEREST EXPENSE DEBITED IN THE SAID PROFIT AND LOSS ACCOUNT WITHOUT THE APPRECIATING THE FACTS AND CIRCUMSTANCES OF THE CAS E SUPPORTED BY THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF PANDIAN CHEMIC ALS LIMITED VS. CIT,[2003] 129 TAXMAN 539 (SC) AND THE DECISION OF HIGH COURT OF JAMMU AND KASHMIR IN THE CASE OF ASIAN CEMENT INDUSTRIES VS INCOME TAX APPELLATE TRIBUNAL, [2012] 28 TAXMAN 290(JAMMU & KASHMIR) (VI) THAT THE LD. CIT(A) HAS ERRED IN DIRECTING THE A.O. TO RECOMPUTE THE INCOME OF THE ELIGIBLE UNDERTAKING AND RE-COMPUTE THE DEDU CTION U/S 80IB AFTER NETTING OFF THE INTEREST INCOME CREDITED IN THE PROFIT AND LOSS ACCOUNT OF THE ELIGIBLE UNDERTAKING AGAINST THE INTEREST EXPENSE DEBITED IN THE SAID PROFIT AND LOSS ACCOUNT. (VII) LD. CIT(A) FAILED TO APPRECIATE THE FACT OF T HE INSTANT AND ERRED IN ALLOWING RELIEF TO THIS ISSUE WITHOUT GIVING ANY OPPORTUNITY OF EXAMINING THE SUBMISSION OF THE ASSESSEE PRODUCED BEFORE THE LD.CIT(A). (VIII)THAT THE DEPARTMENT CRAVES THE RIGHT TO ADD, MODIFY OR ABROGATE THE GROUNDS OF APPEAL DURING THE COURSE OF HEARING OF T HE CASE. 3. GROUNDS NO.(I) TO (III) RAISED BY THE REVENUE I S WITH REGARD TO THE ISSUE AS TO WHETHER THE CIT(A) WAS JUSTIFIED IN ALLOWING THE CL AIM OF THE ASSESSEE FOR DEDUCTION U/S.80IB(5) OF THE INCOME TAX ACT, 1961 (ACT) ON TH E PROFITS DERIVED BY THE ASSESSEE FROM MANUFACTURE AND SALE OF POULTRY FEED. 4. AT THE TIME OF HEARING IT WAS SUBMITTED BY TH E LEARNED COUNSEL FOR THE ASSESSEE THAT THE AFORESAID ISSUE REGARDING THE ELIGIBILITY OF THE ASSESSEE FOR DEDUCTION U/S 80IB(5) OF THE ACT HAS ALREADY BEEN DECIDED BY THE ITAT KOLKATA BENCH IN ASSESSEES OWN CASE FOR AY 2007-08 IN ITA NO. 2227/KOL/2010 OR DER DATED 20.3.2013 AND THIS TRIBUNAL FOLLOWING THE DECISION RENDERED IN THE CAS E OF M/S.AMRIT FEEDS IN ITA NO.1505/KOL/2007 FOR AY 2003-04 DECIDED THE ISSUE I N FAVOUR OF THE ASSESSEE HOLDING THAT THE PROFIT DERIVED FROM THE ACTIVITY O F MANUFACTURE OF POULTRY FEED WAS ENTITLED TO DEDUCTION U/S.80IB(5) OF THE ACT. 5. IT WAS THE PLEA OF THE ASSESSEE THAT THE PROC ESS OF PRODUCING POULTRY FEED INVOLVED MECHANICAL, CHEMICAL & ELECTRICAL PROCESSES FOR WHI CH THE ASSESSEE USED SOPHISTICATED IT(SS)A.NO.131/KOL/2016-M/S. AMRICON AGROVAT (P) LT D. A.Y.2010-11 3 PLANT & MACHINERY. IN THE COURSE OF PRODUCTION OF P OULTRY FEED RAW- MATERIALS WHICH EXCEEDED 30 IN NUMBER, LOST INDIVIDUAL IDENTITY AND THE EMERGING PRODUCT WAS DISTINCT AND SEPARATE IN SHAPE, CHARACTER AND END-USE. THE R AW- MATERIALS CONSUMED IN PRODUCTION OF POULTRY FEED COULD BE INDIVIDUALLY US ED FOR DIFFERENT PURPOSES, BUT THE END PRODUCT AT THE END OF INTEGRATED PRODUCTION PRO CESS WAS KNOWN TO TRADE BY ITS DISTINCT COMMERCIAL NAME AS 'POULTRY FEED'. IT COUL D ONLY BE CONSUMED BY ONLY ONE CLASS OF CONSUMER I.E. POULTRY & NONE ELSE. IT WAS THE CLAIM OF THE ASSESSEE THE END PRODUCT WAS KNOWN AS POULTRY FEED IN THE TRADE, COM MERCE AND INDUSTRY AND WAS CONSIDERED AS SEPARATE AND DISTINCT FROM VARIOUS MA TERIALS CONSUMED IN THE PROCESS OF ITS PRODUCTION. THE ASSESSEE ALSO PLEADED THAT POUL TRY FEED MANUFACTURING INDUSTRY WAS NOTIFIED BY THE CENTRAL GOVERNMENT TO BE ELIGIB LE FOR CLAIMING DEDUCTION FOR A CONSECUTIVE PERIOD OF 10 YEARS U/S 801B(4) OF THE A CT WHERE THE UNDERTAKING WAS LOCATED IN ANY OF THE NORTH EASTERN STATES. IT WAS THE PLEA OF THE ASSESSEE THAT DEDUCTION BOTH U/S 801B (4) & (5) COULD BE ALLOWED ONLY IF NEWLY SET UP INDUSTRIAL UNDERTAKING WAS ENGAGED IN MANUFACTURE AND PRODUCTI ON OF AN ARTICLE AND IF POULTRY FEED INDUSTRY WAS CONSIDERED ELIGIBLE BY THE CENTRA L GOVERNMENT FOR CLAIMING DEDUCTION U/S 801B(4) THEN THE SAME INDUSTRY SHOULD BE CONSIDERED TO BE ELIGIBLE FOR DEDUCTION U/S 801B(5) OF THE ACT ALSO ON THE GROUND AT IT WAS ENGAGED IN MANUFACTURE OR PRODUCTION OF AN ARTICLE. 6. THE AO HOWEVER WAS OF THE VIEW THAT IN THE PROD UCTION PROCESS EXPLAINED BY THE ASSESSEE, THERE WAS NO CHANGE IN CHEMICAL COMPOSITI ON OF THE END PRODUCT AND THEREFORE THERE WAS NO MANUFACTURE. HOWEVER BEFORE RECORDING SUCH AN AUTHENTIC TECHNICAL FINDING, THE AO HOWEVER DID NOT REFER TO ANY SCIENTIFIC DATA OR SCIENTIFIC EXPERIMENTS OR TECHNICAL REPORT TO SUPPORT HIS CONC LUSION. THE AO ACCORDINGLY REJECTED THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/ S.80IB(5) OF THE ACT. 7. ON APPEAL BY THE ASSESSEE, THE CIT(A) HELD THAT THE ASSESSEE WAS ELIGIBLE FOR DEDUCTION U/S.80IB(5) OF THE ACT AND IN DOING SO RE LIED ON THE DECISION RENDERED IN ASSESSEES OWN CASE BY THE TRIBUNAL REFERRED TO IN THE EARLIER PART OF THIS ORDER. IT(SS)A.NO.131/KOL/2016-M/S. AMRICON AGROVAT (P) LT D. A.Y.2010-11 4 8. AGGRIEVED BY THE ORDER OF THE CIT(A), THE REVEN UE IS IN APPEAL BEFORE THE TRIBUNAL. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS. THE ISSUE TO BE DECIDED IS AS TO WHETHER THE ASSESSEE IS ENGAGED IN THE MANUFACTURE OF A PRODUCT ION OF AN ARTICLE TO BE ELIGIBLE FOR DEDUCTION UNDER SECTION 80IB. THIS ISSUE HAS DULY B EEN DECIDED BY THIS BENCH IN ASSESSEE'S SISTER CONCERN IN ITA NO.1505/KOL/2007 I N THE CASE OF ACIT-VS- AMRIT FEEDS LTD., KOLKATA, IN WHICH, THE SIMILAR ISSUE HA S ARISEN. WHILE DECIDING THE SIMILAR ISSUE, THIS TRIBUNAL OBSERVED AS UNDER VIDE PARA 15 TO 18 OF ITS ORDER. '15. SEC 801B (2) (III) REQUIRES THE ELIGIBLE INDUS TRIAL UNDERTAKING TO BE ENGAGED IN 'MANUFACTURE OF PRODUCTION OF AN ARTICLE '. THE SAID SECTION HOWEVER, DOES NOT DEFINE THE EXPRESSION 'MANUFACTURE OR PROD UCTION OF AN ARTICLE'. IN FACT THIS EXPRESSION IS NOT DEFINED IN THE ACT ALSO. THE LD. CIT (A) EXTENSIVELY ANALYSED MEANING OF THE SAID EXPRESSION WITH REFERE NCE TO JUDICIAL DECISIONS DISCUSSED IN HIS ORDER. THE TEST LAID DOWN BY THE C OURTS IS WHETHER THE EMERGING NEW PRODUCT IS KNOWN TO THE TRADE, INDUSTR Y AND COMMERCE BY ITS OWN NAME HAVING ITS OWN APPLICATION USE AND HAS A MARKE T OF ITS OWN. APPLYING THE CRITERIA AS LAID DOWN IN THESE JUDICIAL DECISIONS W E FIND THAT IN PHYSICAL APPEARANCE, COLOUR AND SHAPE THE. POULTRY FEED VAST LY DIFFERS FROM THE INPUT MATERIALS. THE POULTRY FEED IS MANUFACTURED IN A SC IENTIFIC AND SYSTEMATIC MANNER WITH THE USE AND ASSISTANCE OF SOPHISTICATED PLANT AND MACHINERY ACQUIRED AT A SUBSTANTIAL COST. POULTRY FEED IS REC OGNISED NOT ONLY BY TRADE AND COMMERCE BUT ALSO BY THE STATUTORY AUTHORITIES UNDE R CENTRAL EXCISE, SALES TAX ETC AS INDEPENDENT PRODUCTS APPLYING THE RATIO LAID DOWN IN JUDICIAL DECISIONS DISCUSSED IN THE ORDER OF CTT(A) WE HAVE NO HESITAT ION IN HOLDING THAT THE ASSESSEE IS ENGAGED IN MANUFACTURE OR PRODUCTION OF AN ARTICLE, CONTEMPLATED IN SEC 801B (2) (III) . 16. WE ALSO FIND ON THE IDENTICAL FACTS THE BANGALO RE BENCH OF ITAT IN THE CASE OF KOMRALA FEEDS --VS- DCIT 74 ITD 65 HELD THAT ACT IVITY OF PRODUCING POULTRY FEED AMOUNTS TO MANUFACTURE AND THEREFORE E LIGIBLE FOR DEDUCTION U/S 80 I. SEC 80I AND SEC 80IB ARE PARAMETERIA BECAUSE CON DITIONS FOR PART OF DEDUCTION ARE SAME AND THEREFORE THE SAID DECISION IS EQUALLY APPLICABLE IN THE PRESENT CASE. 17. SECTION 80IB IS AN INCENTIVE PROVISION OF THE INCOME TAX ACT ENACTED, BY THE LEGISLATURE TO PROMOTE ECONOMIC AND INDUSTRIAL GROWTH IN BACKWARD DISTRICTS AND STATES. IN THE CASE OF BAJAJ TEMPO LT D --VS. CIT (196 ITR 188) THE SUPREME COURT HAS OPINED THAT A PROVISION OF TAXING STATUTE GRANTING INCENTIVES FOR PROMOTING GROWTH AND DEVELOPMENT SHOULD BE CONS TRUED LIBERALLY AND SINCE A PROVISION FOR PROMOTING ECONOMIC GROWTH HAS TO BE INTERPRETED LIBERALLY THE RESTRICTION THEREON TOO HAS TO BE CONSTRUED SO AS T O ADVANCE THE OBJECTIVE OF THE IT(SS)A.NO.131/KOL/2016-M/S. AMRICON AGROVAT (P) LT D. A.Y.2010-11 5 PROVISION AND NOT TO FRUSTRATE IT. CONDITIONS OF SE C 801B (2) (III) SHOULD BE FULFILLED BY EVERY NEW INDUSTRIAL UNDERTAKING CLAIM ING DEDUCTION EITHER/UNDER SUB SEC (3) (4) OR (5) OF SEC 80 IB I.E. TO SAY THE UNDERTAKING MUST BE ENGAGED IN MANUFACTURE OR PRODUCTION OF AN ARTICLE. IF THIS CONDITION IS NOT FULFILLED NO DEDUCTION IS PERMISSIBLE UNDER ANY OF THE SUB SECTI ONS OF SEC 801B. THE INDUSTRIAL UNDERTAKINGS NOTIFIED AND APPROVED BY TH E CENTRAL GOVT. AND SITUATED IN NORTH EASTERN STATES ARE ELIGIBLE FOR TAX HOLIDA Y FOR PERIOD OF 10 YEARS' AS AGAINST PERIOD OF 5 YEARS AVAILABLE TO OTHER BACKWA RDS STATES. IN NOTIFICATION NO. SO 627 (E) DATED 04.08.1999 THE CENTRAL GOVERNM ENT HAS RECOGNISED POULTRY AND CATTLE FEED INDUSTRY, TO BE AN ELIGIBLE INDUSTRY U/S 80 IB (4). ONCE THE CENTRAL GOVERNMENT NOTIFIED THE POULTRY 'FEED I NDUSTRY U/S 80 IB (4) THEN THERE IS A TACIT ADMISSION THAT IT IS ENGAGED IN 'M ANUFACTURE OR PRODUCTION OF AN ARTICLE'. THIS IS SO BECAUSE UNLESS POULTRY FEED IN DUSTRY DOES NOT MANUFACTURE AN ARTICLE; NO DEDUCTION CAN BE PERMISSIBLE U/S 80I B. ONCE THE CENTRAL GOVT. ACCEPTED IN PRINCIPLE THAT POULTRY FEED IS AN ELIGI BLE INDUSTRY U/S 80IB(4); THEN THE VERY SAME INDUSTRY CANNOT BE CONSIDERED AS NON MANUFACTURING INDUSTRY UNDER SUB SECTIONS (3) AND (5) ' OF SEC 801B. WITH REFERENCE TO SAME SET OF FACTS THE REVENUE CANNOT HOLD THE POULTRY .FEED INDUSTRY AS MANUFACTURING INDUSTRY IF SITUATED IN NORTH EASTERN STATES AND A 'PROCESSING INDUSTRY' IF SITUATED IN ANY OTHER STATES SUCH AN INTERPRETATION WILL ONLY LEAD TO AN ABSURD LEGAL POSITION. 18. FOR THE REASONS AS SET OUT HEREIN BEFORE THEREF ORE WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) HOLDING THE ASSESS EE TO BE ENGAGED IN MANUFACTURE OR PRODUCTION OF AN ARTICLE WE ARE THER EFORE OF THE CONSIDERED OPINION THAT THE ASSESSEE SATISFIES THE CONDITIONS OF SEC 80-IB(2) (III) OF THE ACT AND IS THEREFORE ELIGIBLE FOR DEDUCTION U/S 80IB WE THEREFORE UPHOLD THE ORDER OF CIT (A) DIRECTING A 0 TO ALLOW DEDUCTION U/S 80 IB TO THE ASSESSEE.' 10. IN ASSESSEES OWN CASE THIS TRIBUNAL IN ITA NO. 2227/KOL/2010 FOR AY 2007-08 BY ORDER DATED 20.3.2013 ALLOWED SIMILAR CLAIM OF T HE ASSESSEE. FROM PERUSAL OF THE SAID DECISIONS OF THIS TRIBUNAL, IT IS APPARENT THA T THIS TRIBUNAL HAS CATEGORICALLY HELD IN THE CASE THAT THE ASSESSEE IS ENGAGED IN MANUFAC TURING OF POULTRY FEEDS AND THAT THE ASSESSEE IS ENGAGED IN THE MANUFACTURE OR PRODUCTIO N OF AN ARTICLE. 11. THE LEARNED DR HOWEVER SUBMITTED THAT IN THE D ECISIONS RENDERED BY THE TRIBUNAL, THE DECISION RENDERED BY THE HYDERABAD BENCH OF ITA T IN THE CASE OF VENKATESWARA FEEDS -VS- ACIT 22 TAXMANN.COM 234 (HYD.) WAS NOT P ROPERLY CONSIDERED AND THEREFORE THE DECISION RENDERED IN ASSESSEES OWN C ASE REQUIRES RECONSIDERATION. IN THIS REGARD IT WAS SUBMITTED THAT THE TRIBUNAL IN T HE CASE OF VENKATESWAR FEEDS (SUPRA) FOUND THAT VARIOUS FEED INGREDIENTS SUCH AS MAIZE, RICE BRAN, DE-OILED SOYA ETC., ALONG IT(SS)A.NO.131/KOL/2016-M/S. AMRICON AGROVAT (P) LT D. A.Y.2010-11 6 WITH CERTAIN FEED PREMIXES ARE MIXED IN DIFFERENT P ROPORTIONS AND THEN GROUND TO FORM A COURSE POWDERED MATERIAL WHICH WAS CALLED MA SH FEED. SUCH FEED UNDERWENT A CERTAIN KIND OF PHYSICAL CHANGES AND WAS CONVERTED INTO SMALL PELLETS. THE ACTUAL PROCESS INVOLVED WAS THAT THE MASH FEED WAS CARRIED THROUGH AN ELEVATOR TO A PELLET MAKING MACHINE WHERE IT GOT MIXED WITH STEAM AND TH EN FORCED THROUGH A PRESS CONTAINING SMALL HOLES TO CONVERT THE FEED INTO SMA LL PELLETS. IT WAS HELD THAT THERE WAS NO CHANGE OF COMPOSITION IN THE MASH FEED AND T HE PELLET FEED. HENCE CONVERSION OF PHYSICAL SHAPE OF THE FEED INVOLVES ONLY PROCESS ING AND NOT MANUFACTURE. 12 . THE LEARNED DR FILED BEFORE US A CHART EXPLAINING THE PROCESS CARRIED OUT BY THE ASSESSEE, WHICH IS AS FOLLOWS: RAW MATERIALS (CORN, SOYA MEAL, RICE BRAN, CASSAVA, OTHERS QUALITY INSPECTION (AFLATCOCIN, MOISTURE, ENERGY, PROTEIN, ETC. HATCH WEIGHING (PER FORMULATION) GRINDING OF RAW MATERIALS MIXING PELLETING COOLING CRUMBLING QUALITY INSPECTION WEIGHING AND PACKAGING STORAGE IT WAS SUBMITTED BY HIM THAT THE RAW MATERIAL AND E ND PRODUCT WERE THE SAME AND THEREFORE WHAT THE ASSESSEE DOES IS ONLY PROCESSING AND NOT MANUFACTURE. FOR AN ACTIVITY TO BE CALLED MANUFACTURE ONE OF THE IMPO RTANT CRITERIA IS THAT THE END PRODUCT OF THE MANUFACTURING PROCESS IS TO BE COMPL ETELY DIFFERENT FROM THE IT(SS)A.NO.131/KOL/2016-M/S. AMRICON AGROVAT (P) LT D. A.Y.2010-11 7 INGREDIENTS, AS REGARDS ITS CHEMICAL COMPOSITION, I NTEGRAL STRUCTURE OR ITS USE AND SUCH FACTOR IS MISSING IN THE CASE OF THE ASSESSEE. IT WAS ALSO SUBMITTED THAT THE ACTIVITY CARRIED OUT BY THE ASSESSEE WAS MERE MIXING TOGETHER OF DIFFERENT INGREDIENTS, WITHOUT INVOLVING ANY CHANGE IN THE CH EMICAL COMPOSITION OF THE INGREDIENTS AND THEREFORE, THE DECISIONS RENDERED O N THIS ISSUE HAVE OVERLOOKED THIS ASPECT. IT WAS SUBMITTED THAT THE DECISION RENDERE D IN ASSESSEES OWN CASE DID NOT CONSIDER THE DECISION OF THE HYDERABAD BENCH OF ITAT IN THE CASE OF VENKATESWARA FEEDS (SUPRA) AND THEREFORE THE DECISION REQUIRES R ECONSIDERATION. 13. THE LEARNED COUNSEL FOR THE ASSESSEE WHILE REL YING ON THE ORDER OF THE CIT(A) AND DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE IN AY 2005-06 ALSO SUBMITTED THAT IN THE CASE OF AMRIT FEEDS (SUPRA), THE HONBLE ITAT H AD CONSIDERED AND DISTINGUISHED THE DECISION RENDERED IN THE CASE OF VENKATESWARA F EEDS (SUPRA) BY ITAT HYDERABAD BENCH. 14. WE HAVE GIVEN A CAREFUL CONSIDERATION TO THE R IVAL SUBMISSIONS. IN THE CASE OF AMRIT FEEDS (SUPRA), THE TRIBUNAL CONSIDERED THE DE CISION RENDERED IN THE CASE OF VENKATESWARA FEEDS (SUPRA) AND HELD THAT THE ASSESS EE IN THAT CASE HAD CLAIMED DEDUCTION UNDER SECTION 80IB ON THE ACTIVITY OF MERELY CONVERTING POULTRY MASH FEED INTO PELLET FEED AND THEREFORE THAT BENCH HAS HELD THAT THERE WAS NO CHANGE IN THE BASIC COMPONENT OR NEW OR DIFFERENT ARTICLE CAME INTO EXI STENCE. AS SUCH, CONVERSION WAS PROCESSING ACTIVITY NOT MANUFACTURING. THE TRIBUNAL HELD THAT THE CASE OF THE ASSESSEE AMRIT FEEDS (SUPRA) WAS ENTIRELY DIFFERENT. THE ASS ESSEE'S ELIGIBLE UNDERTAKING ITSELF WAS INDEPENDENTLY CARRYING OUT THE COMPLETE ACTIVIT Y I.E. FROM MIXING, GRINDING TILL THE PELLETISATION. THE RAW MATERIALS ONCE CONSUMED COUL D NOT BE RECONVERTED INTO THE SAME POSITION. ITS UTILITY GETS CHANGED. THE PRIME RAW MATERIALS SUCH AS, MAIZE, SOYA OIL, RICE BRAN, ETC. CAN NO MORE BE REGARDED TO BE THE RICE BRAN, SOYA OIL, MAIZE. WE ARE OF THE VIEW THAT THE ISSUE IN THE REVENUE'S APPEAL IS SQUARELY COVERED AGAINST THE REVENUE BY THE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL IN ASSESSEE'S OWN CASE FOR THE EARLIER YEARS WHICH WAS BASED ON THE D ECISION RENDERED IN THE CASE OF AMRIT FEEDS (SUPRA). RESPECTFULLY FOLLOWING THE DE CISION OF THE COORDINATE BENCH OF THIS TRIBUNAL IN ASSESSEE'S OWN CASE THE FINDING OF LD. CIT(A) ON THIS ISSUE STANDS IT(SS)A.NO.131/KOL/2016-M/S. AMRICON AGROVAT (P) LT D. A.Y.2010-11 8 CONFIRMED AND THE GROUNDS OF APPEAL RAISED BY THE R EVENUE IN ALL THE APPEALS ON THIS ISSUE ARE DISMISSED. 15. AS FAR AS GROUND NOS. (IV) TO (VII) RAISED B Y THE REVENUE ARE CONCERNED IT HAS BEEN PROJECTED IN THE GROUNDS OF APPEAL THAT THE ISSUE F OR CONSIDERATION IS WHETHER INTEREST INCOME EARNED BY THE ASSESSEE ON FDRS SHOULD BE CON SIDERED AS INCOME DERIVED FROM ELIGIBLE BUSINESS FOR THE PURPOSE OF ALLOWING DEDUC TION U/S 80IB(5) OF THE ACT. THE GROUND PROJECTED BY THE REVENUE IS ERRONEOUS. A PER USAL OF THE ORDER OF AO AND THE SUBMISSIONS MADE BY THE ASSESSEE BEFORE CIT(A) SHOW S THAT THE ASSESSEE CLAIMED DEDUCTION U/S 80IB(5) OF THE ACT IN RESPECT OF A SU M OF RS.99,291/- WHICH COMPRISED OF A SUM OF RS.91,490/- WHICH WAS SUNDRY BALANCE RE TURNED BACK WHICH HAD NEXUS WITH THE BUSINESS OF MANUFACTURE AND SALE OF POULTR Y FEED AND ANOTHER SUM OF RS.7801/- WHICH WAS MISCELLANEOUS RECEIPTS WHICH AL SO HAD DIRECT NEXUS WITH THE BUSINESS OF MANUFACTURE AND SALE OF POULTRY FEED. T HESE SUMS WERE TREATED AS INCOME OF THE ASSESSEE U/S 41(1) OF THE ACT AND SINCE THEY HAD A DIRECT NEXUS WITH THE BUSINESS OF MANUFACTURE OF POULTRY FEED THE ASSESSEE CLAIMED THAT THE SAME SHOULD BE CONSIDERED AS INCOME DERIVED FROM THE ELIGIBLE BUSI NESS FOR THE PURPOSE OF ALLOWING DEDUCTION U/S 80IB(5) OF THE ACT. THE CIT(A) ALLOWE D THE CLAIM OF THE ASSESSEE. 16. WE ARE OF THE VIEW THAT IN THE LIGHT OF THE ADMITTED FACTUAL POSITION THAT THE INCOME IN QUESTION HAD DIRECT NEXUS WITH THE BUSINE SS OF THE ASSESSEE. THE SAME WAS RIGHTLY HELD BY CIT(A) TO BE ELIGIBLE FOR THE PURPO SE OF CLAIMING DEDUCTION U/S 80IB(5) OF THE ACT. WE DO NOT FIND ANY GROUND TO IN TERFERE WITH THE ORDER OF CIT(A). CONSEQUENTLY THE GROUNDS OF APPEAL ARE DISMISSED. 17. IN THE RESULT THE APPEAL BY THE REVENUE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 05.04.2017. SD/- SD/- [M.BALAGANESH] [ N.V.VASUDEVAN ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 05.04.2017. R.G.(.P.S.) IT(SS)A.NO.131/KOL/2016-M/S. AMRICON AGROVAT (P) LT D. A.Y.2010-11 9 COPY OF THE ORDER FORWARDED TO: 1. M/S. AMRICON AGROVAT (P) LTD., 158, LENIN S ARANI, 2 ND FLOOR, KOLKATA-700013. 2. A.C.I.T., CENTRAL CIRCLE-2(1), KOLKATA 3. CIT(A)-20, KOLKATA 4. CIT CENTRAL-I, KOLKATA. 5. CIT DR, KOLKATA BENCHES, KOLKATA TRUE COPY, BY ORDER, DEPUTY /ASST. REGISTRAR, ITAT, KOLKATA BENCHES