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TMI Blog2014 (11) TMI 512X X X X Extracts X X X X X X X X Extracts X X X X ..... . The chicks of one day old, are supplied to the owners of poultry farms. In the returns submitted for the two assessment years referred to above, the respondent included the income, not only from the sale of chicks and other material, but also the income from the services rendered to the purchasers of the chicks. Section 80JJ of the Income Tax Act (for short the Act), as it stood then, provided for deduction of 1/3rd of the profits and gains derived from the business of poultry farming. For the assessment year 1993-94, the respondent claimed the benefit under Section 80JJ of the Act in respect of the income derived from the sale of chicks as well as the services rendered therefor. The Assessing Officer however restricted the benefit under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds that the rendering of after sales services is no part of the transaction or contractual obligation and the income derived therefrom does not qualify to be a component for extending the benefit under Section 80JJ of the Act. Placing reliance upon the judgment of the Honble Supreme Court in Commissioner of Income Tax vs. Pandian Chemicals Ltd. 262 ITR 278, learned counsel submits that the view taken by the Commissioner and the Tribunal cannot be sustained in law. Sri Y.Ratnakar, learned counsel for the respondent on the other hand submits that the hatcheries supply the chicks of one day old to the poultry farmers and the condition of the chicks so supplied is so delicate and precarious that unless specialized services are rendered, and pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chicks need to be guided by the hatchery itself, in the context of providing feed, administering medicines and taking various precautionary measures, so that optimum result is procured. If chicks are egg yielding, the growth is required to be in a particular way and if they are grown for yielding meat, steps are to be taken to ensure that it gains more weight in the least possible time. These are the techniques, which involve lot of scientific research, and administration of the relevant products, from time to time. In his order, dated 07.08.1996, the Commissioner has taken note of some salient features in this process and enlisted them as under: 1. Vaccination 2. Training in Debeaking & Vaccination 3. Technical advice through our doct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Its use in the definition indeed demands an enquiry into the genealogy of the product. But the enquiry should stop as soon as the effective source is discovered. In the genealogical tree of the interest land indeed appears in the second degree, but the immediate and effective source is rent, which has suffered the accident of non-payment. And rent is not land within the meaning of the definition." In the instant case, if we commence an enquiry into the genealogy of the income in question, the enquiry stops at the answer to the first question itself. To be precise, if the question is as to what is the source of income, the answer would be remuneration for the services rendered to the chicks that were sold to the poultry farms. Thus the link ..... X X X X Extracts X X X X X X X X Extracts X X X X
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