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TMI Blog2015 (7) TMI 903X X X X Extracts X X X X X X X X Extracts X X X X ..... prietor of three concerns and was carrying on business namely; i) M/s. Chinmara Roller Flour Mills; (ii) M/s. Gangabishan Murlidhar & (iii) M/s. Navneet Dairy. In respect of "M/s. Navneet Dairy", the assessee claimed deduction for a sum of Rs. 10,17,492/- u/s. 80IC of the Income tax Act, 1961 (in short 'the Act') being profit & gains derived from aforementioned business. It is claimed that the assessee was carrying on business of production of milk and milk based products in the said proprietorship concern and total sales was at Rs. 84,00,829/- comprised of products namely, Milk, Mawa, Cream, Ghee for the period ended on 31.3.2007. The Assessing Officer rejected the claim of the assessee concluding as under: 'In view of discus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rected the AO to recompute the deduction u/s. 80IC of the Act. The relevant observations made by the ld CIT(A) are as under: "3.4 Before examining the list in Part-A, it is important to know that section 80IC(2)(b) refers to article or thing and operations mentioned in Schedule-14. The expression "any article or thing specified" implies the list contained apart from operations at least two articles or things. Now Sl. No.6 to 18 are industries. There is no scope of arguing that any of the expressions include article or thing. Therefore, it is clear that the Sl.No.1 to 5 are contains some articles or things. It is clear that the items in Sl.No.6 to 12 and 14 to 18 are industries. They are definitely not article or thing. Therefore, it is cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x Act, 1961 and that profit derived from Milk is eligible for deduction u/s. 80IC of the Act subject to other conditions laid down in section 80 IC of the Act. Accordingly, ld CIT(A) directed the AO to recompute the deduction u/s. 80IC in the light of my findings.' 5. We have heard the rival submissions and perused the materials available on record. Ld D.R. heavily relied on the order of the Assessing Officer and on the other hand, ld counsel for the assessee invited our attention to the provisions of section 80IC (2)(b) of the Act and submitted that the assessee is entitled for deduction in respect of profit derived from the manufacture of production of any article or thing specified in the Fourteenth Schedule of the Act. According t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the AO in the assessment order is not in consonance with the settled position of law. In Fourteenth Schedule 'Milk" is expressly specified as an article or thing in the said schedule at SI. No.5. Thus, the said schedule itself evidences beyond any shadow of doubt that Legislature has clearly intended that "Milk" is an article or thing which can be produced by an assessee. 6. At this juncture, it will be worthwhile to refer the decision of Hon'ble Supreme Court in the case of CIT v. Tara Agencies [2007] 292 ITR 444, wherein, the Hon'ble apex Court while explaining the meaning of the word "production" has observed as under: (page 452) 'The expression "produced" was given a wider meaning than the word "manufacture" poin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mines and the like or for example by milching the cow the milkman produces milk though he has not applied any process on any raw material for the purpose of bringing into existence the thing known as milk. 9. In view of above, we hold that the word 'production' includes within its purview the word 'manufacture' and also other activities. In view of above decision of Hon'ble Supreme Court in the case of Tara Agencies (supra), we hold that "Milk" is an article or thing which can be produced by the assessee and, therefore, we fully concur with the views taken by the Commissioner of Income Tax (Appeals) in holding that "Milk" is an article or thing mentioned in Part-A of Fourteenth Schedule of the Act, and that the profit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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