9911796707
TMI Blog1989 (6) TMI 93X X X X Extracts X X X X X X X X Extracts X X X X ..... year 1982-83, the assessment was completed under section 143(3) in the status of a company. The ITO noted that it was assessed as a "non-industrial rate". The income was shown at Rs. 71,600. The ITO computed the income after disallowing some expenses. After considering the depreciation, the amount came to Rs. 1,78,883. 40% thereof came to Rs. 71,553. In addition to a taxable item of Rs. 50, the amount was assessed at Rs. 71,600. There was no further discussion. 3. The assessee took up the matter before the CIT(A) stating that the ITO was not justified in treating the assessee as non-industrial company. The assessee owned tea gardens but did not own a factory. Manufacture of tea was done through other factories but the sale of the manufac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to give the said direction when the assessee has simply grown leaves and manufactured elsewhere and no manufacturing activity was undertaken by the assessee so as to justify the claim. It is urged, therefore, that the order of the CIT(A) being wrong on facts and in law should be reversed and those of the ITO may be restored. On behalf of the assessee, however, the learned counsel for the assessee supports the order of the CIT(A). It is vehemently urged by the counsel that it is immaterial if the green leaves grown by the assessee is manufactured by a sister concern in a nearby factory on behalf of the assessee for which manufacturing charges were paid for by the assessee as per profit and loss account and it was the assessee who sold the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Representative points out that actually there was a delay of lesser number of days after excluding the time taken for obtaining the certified copies and also for obtaining authorisation from the CIT, Shillong, etc. It is submitted at length that having regard to the provisions of the law including the general law, the delay was due to reasonable cause which requires to be condoned. It is pointed out that the assessing officer was sitting at Jorhat and thereby much time was taken on account of postal delay of correspondences between the different authorities. 7. After considering the submissions made by both the sides in respect of the limitation, we are of the opinion that it is true that each day of the delay has to be explained. But i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered as industrial undertaking. We have taken into account the decision relied on by the parties before us also. As pointed out earlier, the submissions of the learned counsel for the assessee is that the assessee continues to be an industrial undertaking even though the manufacturing of the tea was done by sister concern for which manufacturing charges were incurred and after the manufactured tea was received back, the same was sold by the assessee as its products. In reply, the learned Departmental Representative submits that income from tea estate is computed as worked out under Rule 8 of the Income-tax Rules. It is, however, urged that the whole activity right from planting of tea bushes up to the sale of the manufactured tea is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... activity relating to the tea business was entirely an industrial activity and not only 51%. In other words, the contention on behalf of the assessee is that since the portion of 40% is admittedly an industrial activity, then there was no question of further ascertaining 51% of the entire income as assessed before allocation at 40% for granting relief admissible to the assessee. We have given our consideration to the points raised by the parties from different angles. There is force in the submissions on behalf of the revenue, particularly in view of Rule 8 which says that income derived from the sale of tea grown and manufactured by seller in India shall be computed as if it were income derived from business and 40% of such income shall be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the green leaves as well as sale of tea involve an integrated activity. Similar situation has arisen in the case of CIT v. Sutna Stone Lime Co. Ltd. [1982] 138 ITR 37 (Cal.). 10. In the case of Jalannagar South Estate Ltd. v. Commissioner of Taxes [1967] 63 ITR 389, the Hon'ble Assam High Court in a similar background and facts of the case held that the amounts contributed by the assessee to charitable purposes cannot be limited to 60 per cent of the total amount contributed, while computing the assessable income of the assessee under the Assam Agricultural Income-tax Act, 1939, under which only 60% of income from growing, manufacturing and selling of tea was under consideration. 11. Thus having regard to the facts of the case and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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