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Issues Involved:
1. Condonation of delay in refiling the appeal. 2. Eligibility for deduction u/s 80IB of the Income Tax Act. 3. Whether the process undertaken by the assessee amounts to manufacturing or production. Summary: Condonation of Delay: This is an application seeking condonation of delay of 151 days in refiling the appeal. Upon hearing learned counsel for the parties and on perusal of the application, the delay in refiling the appeal is condoned subject to payment of cost of Rs. 5,000/- to Delhi High Court Legal Services Committee. Accordingly, the application stands disposed of. Eligibility for Deduction u/s 80IB:The assessee is engaged in manufacturing of tinned fish and mutton. It has been filing returns and claiming deductions u/s 80IB of the Income Tax Act for the assessment years 1996-97 to 2003-2004. It is only during the assessment year 2004-2005 that its case came to be examined by the Additional C.I.T. by exercising his powers conferred upon him u/s 144A of the Act. Pursuant to the directions given by the Additional C.I.T. u/s 144A, the AO completed the assessment u/s 143(3) on 27th December, 2006 and disallowed the deduction amount to Rs. 54,83,360/- claimed by the assessee u/s 80IB of the Act. Aggrieved by this, the assessee preferred an appeal before CIT(A), who vide order dated 6th February, 2008 allowed the appeal holding that the processes undertaken by the assessee amounted to "manufacture". Consequently, CIT(A) held the assessee to be entitled for deduction u/s 80IB of the Act and deleted the disallowance made by the AO. The Revenue filed appeal before the Income Tax Appellate Tribunal (hereinafter referred to as "the Tribunal"), which was dismissed upholding the reasoning and the order of the CIT(A). It is against this impugned order, the Revenue has preferred the appeal. Manufacturing or Production:The short question for consideration is as to whether the processes undertaken by the assessee in converting raw fish into tinned fish for consumption amounted to "manufacture" or not. The process involved in converting raw fish into tinned fish as presented by the assessee was examined by the Assessing Officer. Holding the activity to be a "process" and not "manufacture", AO recorded as under: "I am of the considered view that the manufacturing undertaken by the assessee company is at best food processing and cannot be categorized as manufacturing or production which results into creation of the new and distinct commodity, as recognized in the trade circle. The assessee company undertakes: (i) Sorting and quality control of fish (ii) Packaging the raw fish in ice. (iii) Procuring of raw fish from fishing docks (iv) Pre-processing of fish (v) Cleaning, cutting of fish head, tail, fins, tips and removal of skin. (vi) Pre-cooking and packaging of pre-cooked products in cans (vii) Creation of negative pressure for achieving long shelf life. (viii) Sterilization of canned product and inactivation of microbial load (ix) Cooling of packed canes for further inactivation of microbial load (x) Final product - tuna/mackerel fish (xi) Tinned fish kept in ware house. After going through the above stages through which the input raw material - fish is converted into tinned fish, it is clear that, as a result of processing undertaken by the assessee company, no commercially different and distinct commodity has been produced and, hence, it is noticed that the processing undertaken by the assessee company cannot be held to be amounting to manufacturing or production of an article or thing and, therefore, the basic condition for eligibility of 80IB deduction is not found to have been fulfilled and, hence, the deduction claimed u/s 80IB is not found to be allowable." The CIT(A) after going into the minute details of the processes involved in different commodities and also the judgments of different High Courts and the Supreme Court regarding those commodities held the activities involved in conversion of raw fish into tinned fish as "manufacturing" and thus the assessee was held to be entitled to deductions u/s 80IB. The Tribunal recorded its agreement with CIT(A) in the following manner: "Moreover, the claim of the assessee for
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