9911796707
TMI Blog2000 (1) TMI 143X X X X Extracts X X X X X X X X Extracts X X X X ..... confirmed the order of the Assessing Officer in view of the facts that the processes employed by the assessee did not result in converting the primary agricultural commodity into a different commodity. 2. The facts of the case are briefly as under: The assessee filed the return admitting total income of Rs. 1,04,260 on 5-11-1985 for the assessment year 1985-86. The assessment was completed on 13-10-1987 under section 143(1) of the Act. Subsequently, it was noticed that the assessee claimed deduction under section 80HHC amounting to Rs. 3,53,999 at 1% of the turnover and 5% of the incremental turnover. The claim was on items like turmeric, Kipoorkacholi, Kolinjan etc. which are primary agricultural commodities on which, no deduction is al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed by the Assessing Officer wherein he had concluded that ginger, turmeric, Kolinjan, Kapurkachili, Methi seeds etc., are primary agricultural commodities and therefore, they are not entitled to the relief under section 80HHC. 3. On merits the Assessing Officer held that the process narrated by the assessee would only indicate that there was no process as alleged by the assessee. The only process carried out was general in nature which are done in order to make a product marketable such as cleaning, washing, drying and fumigating. According to the Assessing Officer there is no mechanical process involved in none of these processing, if at all. Therefore, he held that what the assessee sold was primary agricultural commodities and hen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... takes place by exposure to the sun and also by other manual and mechanical process. After this process green ginger is treated by mechanical as well as manual process and gain it is washed, dried and once again cleansed, removing the skin. Thereafter the process of fumigation is done. As far as turmeric is concerned, the skin is removed, then washed. Thereafter, it is boiled in big pans and dried in the open yard. Once again it is washed, dried and the dust particles are removed. Thereafter the commodity is garbled and fumigated. Coming to Kapurkachli the same process is carried on. Therefore, the case of the assessee was that these are goods processed and as a result they become distinct from the primary agricultural commodities. Therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing all these processes, the commodity remians the same as it retains its original character. Accordingly to him, dry ginger and green ginger are the one and same commodity. In the dry ginger only the water clement comes down. Peeling and removing dust particles do not make the commodity different from primary agricultural commodity. So also the case with other items like, turmeric, Kapurkachli, Kolinjan and Methi seeds. Relying on the decision of the Supreme Court in the case of CIT v. Relish Foods [1999] 237 ITR 59/103 Taxman 392, the learned departmental representative submitted that the order of the CIT(Appeals) is liable to be set aside. The learned departmental representative further relied on the following observations of the Apex Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rimary agricultural produce, and by a few days fermentation like process, the character of the seeds had not undergone any change, either in its quality or nature or form. The learned counsel for the assessee further submitted that under the Kerala Agricultural Sales-tax Act, green ginger is exempted whereas dried ginger is taxed, at the last purchasing point, because it has undergone considerable change and it has become a commercially viable commodity. 9. In reply to the above, the learned departmental representative reiterated that the commodity remained the same after the process mentioned by the assessee and hence the relief is not available to the assessee. For this proposition, the learned departmental representative relied on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther than those specified in clause (b)] if the sale proceeds of such goods or merchandise exported out of India are receivable by the assessee in convertible foreign exchange. (b) The goods or merchandise referred to in Clause (a) are the following, namely:--- (i) agricultural primary commodities, not being produce of plantations;" A reading of the above section makes it clear that this section applies only to primary agricultural commodities, not being produce of plantation. The word 'primary' is defined in the Concise Oxford Dictionary, (Seventh Impression) as "earliest", "original", "of the first rank in a series", "belonging to first stage of development" etc. It cannot, therefore, be said that dried ginger is a primary agricultura ..... X X X X Extracts X X X X X X X X Extracts X X X X
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