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TMI Blog2012 (10) TMI 620X X X X Extracts X X X X X X X X Extracts X X X X ..... improve odour and the taste, free from undesirable flavours. The lowering of temperature prevents undesirable fermentation and provide better palatability to milk. Thus these activities result into restricted microbial growth and inactivation of enzymes. The next process is blending, which results in preservation of vitamins and nutrients with standard uniform contents of fat, which also improves flavour of the milk.All this process result into change in the physical and chemical properties of the milk as dairy milk, which can be consumed directly without any further processing. Thus it cannot be equated with simple processing of raw milk for the purpose of final consumption. The processes of treatment of milk amounts to manufacturing p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 378 of 2007 under Section 260-A of is directed against the judgment dated 30.10.2001 passed by the Income Tax Appellate Tribunal, Agra Bench, Agra in ITA Nos. 3774, 3775, 5339, 7889, 8285/Del/90 and No. 3286/Del/94, relating to the assessment years 1985-86 to 1990- 91. The Appeal was admitted on the following substantial questions of law:- (i). Whether on facts and circumstances of the case, the Tribunal was legally correct in holding that chilling of milk by keeping with ice to keep it as low temperature involve manufacturing during the period relevant to assessment year 1985-86 to 1988-89? (ii). Whether on the facts and in the circumstances of the case, relating to the assessment year 1989-90 and 1990-91, the process involved for k ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... carries on the business of purchase and sale of milk. The assessee has not carried out any activities of manufacturing of any item during the year under consideration, hence the claim u/s 80 HHA and 80 I are not admissible. The assessee vide order sheet, entry dated 16.6.93 was required to justify the claim in the light of not carrying any manufacturing activities. The assessee during the course of hearing it is stated that during the year under consideration assessee has started the manufacturing of cream and sale thereof. Accordingly, the claim is allowable under the section mentioned above. It is also stated, vide reply dated 12.07.1993 that the assessee is carrying on Industrial Undertaking, in which dairy milk is produced and sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hereby disallow the claim of the assessee u/s 80 HHA and 80 I. 5. In Appeal filed by the assessee, the CIT (Appeals) found that the appellant is entitled to deductions on the ground that firstly for the year 1988-89, the claim was rejected by CIT (Appeals), Agra. On production of fresh facts, the appeal was allowed by CIT (Appeals), by his order dated 10.01.1994 for the assessment year. In the earlier assessment years 1985-86 to 1990-91 also, the assessee's case for deductions were allowed. The CIT (Appeals), summarized the activities of the appellant as follows:- 8.2 The appellant; submissions in this regard are that the said ground of appeal has been thoroughly examined in his case for the earlier assessment years starting from 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acting cream of the milk for which separate process altogether is required to be carried out and he has shown sale of cream and skimmed milk separately. All this discussion goes to prove that the asessee is engaged in industrial activity, which entitles him for the deductions claimed under these two heads. The same should be allowed subject to satisfaction of prescribed conditions in both the sections in this regard. 6. The A.C.I.T., Circle 2 (1), Agra filed an appeal in the Income Tax Appellate Tribunal, Agra Bench, Agra. The Tribunal discussed the assessee's explanation, and found that since the facts were identical with that of the earlier years, the assessee was entitled to deductions under sections 80 HHA and 80 I. The Tribunal obser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt explained the meaning of manufacturing activity and held that unless a new commercial commodity is resulting out of the manufacturing activity, it cannot be treated as manufacturing activity. 8. Sri Govind Krishna submits that since the assessee is not carrying out any manufacturing activity, he is not entitled to deductions under Sections 80 HHA and 80 I of the Act. 9. We have considered the submissions and find that the assessee established before the CIT (A) that the process undertaken by him is not simply chilling of the milk but involves various stages of straining, filtration for improving the appearance of the milk as also for reducing microbial counts and decrease in pathogen and substances which are injurious to health. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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