9911796707
TMI Blog2016 (3) TMI 270X X X X Extracts X X X X X X X X Extracts X X X X ..... deleting the addition of Rs. 47,62,030/- made on account of disallowance of deduction u/s 80-IC in respect of this income. 2. Whether Ld. CIT (A) has erred in law in interpreting the provisions of section 80-IC read with Schedule XIV (Part C, Si. No. 4) of the IT Act, 1961 according to his own surmises and belief and holding that the provisions of section 80-IC needs to be interpreted liberally. 3. Whether Ld. CIT (A) has erred in law in adding the word 'preservation in point 4(e) of Part-C of Schedule XIV and accordingly allowing the benefit of deduction u/s 80-IC on rental income. 4. Whether Ld., CIT(A) has erred in law and on facts allowing the benefit of deduction u/s 80-IC on rent income ignoring the decision of the Hon&# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the deduction and held that this is not the business income of the assessee derived from the eligible industrial undertaking as it is on account of storage chares and on which no incentives has been envisaged. 4. The assessee carried the matter before the learned Commissioner of Income tax (Appeals) who allowed the deduction on this income. According to him, the assessee is engaged in the business of processing, preserving and packaging of fruits and vegetables and meat products etc. which is integrated business of handling, storage and transportation of these materials. He held that this rent income is derived from the eligible industrial undertaking. Now against the order of learned Commissioner of Income tax (Appeals) revenue is in ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the integrated activity of processing. For this argument, he relied on several decisions that substance of the transaction must be seen. He further submitted that definition of the "processing" is wide and freezing activity is part of the „processing" of vegetables as defined in various dictionaries. He also submitted that statutory provision governing deductions are to be liberally construed. It was also one of the arguments that even in the case of Job worker and in the case of Works Contact deduction u/s 80IC is allowed. Regarding the decision of the Hon‟ble Supreme Court in the case of Liberty India Vs. CIT 183 Taxmann 349 (SC) raised in one of the grounds of this appeal that Hon‟ble Supreme Court has answered this i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oss account as „rent‟. Undisputedly the claim of the assessee is that processing of vegetables involves receipt of the material loading, unloading, depodding, air cleaning, boiling, processing, freezing and then filing into HDPE bags. It was also submitted that as a part of the above process the peas are required to be freezed in cold room where the temperature is minus 20 degree Celsius or below. Assessee has prepared two types of bills i.e. (1) as processing charges and (2) as freezing charges, instead of one composite bill for processing charges. On perusal of the balance sheet, it is evident that the assessee has shown freezing charges as rent income in the profit and loss account for this year and in the last year too. This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tivity of the assessee. Only reason advanced by AO is that receipt in income is storage charges. Therefore, we do not have any hesitation in in holding that freezing charges earned by the assessee are part of the composite activity of processing of peas. The decision relied upon by the ld. DR of Hon‟ble Supreme Court in case of Liberty India Vs. CIT (supra) does not apply to the facts of this case as in that case Hon‟ble Supreme Court held that the DEPB/ duty Drawback which has received from the Govt. of India to support the assessee are not income derived from the industrial undertaking. Here in this case freezing activity, which is carried out by the assessee is part of the composite activity of processing of vegetables. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
