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2013 (11) TMI 1327 - AT - Income TaxDeduction u/s 80IC of the Income Tax Act - Interpretation of the word and in item no.12 given in Schedule 14 - Assessee produces an article or things, prescribed in the Schedule 14, the assessee s claim is that his case falls in item 12 of Schedule 14, as the assessee is engaged in the business of processing of black tea - . The contention of the assessee is that the word and between processing and raising should be read as or - Assessee basically relies on item nos. 1,2 and 4 of Schedule 14 Held that - In items no. 1,2 and 3 of schedule 14, the nomenclature of the article or things has been mentioned first and activity is given subsequently while in item no.12, it is the activity which has been mentioned first. An article and things has been mentioned subsequently to that - Activities in item no.1 between the activities, the word or has been used as is apparent in the case of fruit and vegetable , processing industries, manufacturing or producing . Similarly in item no.2 also, between the activities, the word or has been used, manufacturing or producing. Similarly, in item no.4 also, the word or has been used between the activities, while in item no.12, the word and has been used between activities. It clearly denotes that both the conditions, i.e., processing and raising of plantation crops must be specified by an undertaking eligible for deduction under section 80IC(2)(b). This is the settled law that a fiscal statute shall have to be interpreted on the basis of the language used therein and not de hors the same. No words ought to be added and only the language to be used or considered so as to ascertain the proper meaning and intent of the legislation. The Court is to ascribe the natural and ordinary meaning to the words used by the legislature and the Court ought not, under any circumstances, statute to its own impression and ideas in place of the legislative intent as is available from a plain reading of the statutory provisions. The Hon ble Supreme Court in the case of Orissa State Warehousing Corpn v. CIT 1999 (4) TMI 3 - SUPREME Court has clearly held that an exemption is an exception to the general rule and since the same is opposed to the natural tenure of the statute, the entitlement for exemption, ought not to be read with any latitude to the taxpayer of even with a wider connotation to restrict its application to the specific language used depicting the intent of the Legislature. The decision of the Hon ble Supreme Court is binding - This decision is delivered subsequent to the decision of the Hon ble Supreme Court in the case of Bajaj Tempo Ltd. 1992 (4) TMI 4 - SUPREME Court on which the ld. A.R. has vehemently relied on. This is the settled law in view of the decision of Bhika Ram v. Union of India 1998 (9) TMI 48 - DELHI High Court that even there is a conflict between the two decisions of the Supreme Court, the one decided by a Larger Bench is binding. If both decisions are rendered by the Bench consisting of equal number of Judges, the latter decision is binding - In view of our aforesaid discussions, until and unless complied with the conditions of engaging in processing and raising of the plantation of tea, the assessee cannot be allowed deduction under section 80IC(2)(b) Decided in favor of Revenue.
Issues Involved:
1. Allowability of deduction under section 80IC(2)(b) of the Income Tax Act. 2. Interpretation of the word "and" in item 12 of Schedule 14. 3. Eligibility for deduction under section 80IB as an alternative claim. Detailed Analysis: Issue 1: Allowability of Deduction under Section 80IC(2)(b) The assessee claimed deduction under section 80IC for the assessment years 2005-06 and 2006-07. The Assessing Officer (AO) disallowed the deduction on the grounds that the assessee was engaged only in the processing of tea and not in the raising of plantation crops, which he interpreted as a requirement for the deduction. The Commissioner of Income Tax (Appeals) [CIT(A)] reversed the AO's decision, allowing the deduction by interpreting the phrase "processing and raising of plantation crops" to mean that either activity would suffice for the deduction. The CIT(A) emphasized that the provision should be interpreted liberally to fulfill the legislative intent of granting benefits to industries involved in either processing or raising plantation crops. Issue 2: Interpretation of the Word "and" in Item 12 of Schedule 14 The AO interpreted the word "and" in item 12 of Schedule 14 to mean that both processing and raising of plantation crops must be carried out by the assessee to qualify for the deduction. The CIT(A) disagreed, stating that the word "and" should be read as "or," thereby allowing the deduction if the assessee was engaged in either activity. The tribunal examined the language of Schedule 14 and noted that in other items, the word "or" was used between activities, but in item 12, the word "and" was explicitly used. The tribunal concluded that the legislature intended for both activities to be carried out by the assessee to qualify for the deduction under section 80IC(2)(b). This interpretation was supported by the principle that fiscal statutes should be interpreted based on the language used, without adding or altering words. Issue 3: Eligibility for Deduction under Section 80IB as an Alternative Claim The assessee alternatively argued that if the deduction under section 80IC was not allowed, the deduction should be permitted under section 80IB, as it had been allowed in previous years. The tribunal acknowledged that the assessee was entitled to the deduction under section 80IB in earlier years and noted that this issue was raised for the first time during the appeal. Consequently, the tribunal remanded the matter back to the AO to examine the eligibility for deduction under section 80IB. The AO was directed to allow the deduction under section 80IB if the assessee met the relevant conditions, after providing a reasonable opportunity for the assessee to present supporting evidence. Conclusion: The tribunal allowed the appeals filed by the Revenue for statistical purposes. The deduction under section 80IC(2)(b) was disallowed based on the interpretation that both processing and raising of plantation crops were required. However, the tribunal remanded the case to the AO to determine if the assessee was eligible for the deduction under section 80IB, ensuring that the assessee had the opportunity to present evidence in support of this alternative claim.
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