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TMI Blog2017 (4) TMI 1316X X X X Extracts X X X X X X X X Extracts X X X X ..... come in question had direct nexus with the business of the assessee. The same was rightly held by CIT(A) to be eligible for the purpose of claiming deduction u/s 80IB(5) of the Act. We do not find any ground to interfere with the order of CIT(A). Consequently the grounds of appeal are dismissed. - IT(SS) A No 131/Kol/2016 - - - Dated:- 5-4-2017 - Hon'ble Sri N.V.Vasudevan, JM Hon'ble Sri M.Balaganesh, AM For the Appellant: Shri.G.Mallikarjuna CIT DR For the Respondent: Shri D.S.Damle, FCA ORDER Per Shri N.V.Vasudevan, JM This is an appeal filed by the Revenue against order dated 27.9.2016 of CIT(A)-20, Kolkata, relating to AY 2010-11. 2. The grounds of appeal raised by the revenue in this reads as follows: (i) That the Ld. CIT(A) has erred in accepting that the term 'manufacture' occurring in the context of section 80-IB does not necessarily require that the end product of the manufacturing process is to be completely different from the ingredients, as regards its chemical composition, integral structure or its use. (ii) That the Ld. CIT(A) has erred in accepting that the process of manufacturing of poultry feeds does not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mrit Feeds in ITA No.1505/Kol/2007 for AY 2003-04 decided the issue in favour of the Assessee holding that the profit derived from the activity of manufacture of poultry feed was entitled to deduction u/s.80IB(5) of the Act. 5. It was the plea of the Assessee that the process of producing poultry feed involved mechanical, chemical electrical processes for which the Assessee used sophisticated Plant Machinery. In the course of production of poultry feed raw- materials which exceeded 30 in number, lost individual identity and the emerging product was distinct and separate in shape, character and end-use. The raw- materials consumed in production of poultry feed could be individually used for different purposes, but the end product at the end of integrated production process was known to trade by its distinct commercial name as 'poultry feed'. It could only be consumed by only one class of consumer i.e. poultry none else. It was the claim of the Assessee the end product was known as poultry feed in the trade, commerce and industry and was considered as separate and distinct from various materials consumed in the process of its production. The Assessee also pleaded tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion with reference to judicial decisions discussed in his order. The test laid down by the Courts is whether the emerging new product is known to the trade, industry and commerce by its own name having its own application use and has a market of its own. Applying the criteria as laid down in these judicial decisions we find that in physical appearance, colour and shape the. Poultry feed vastly differs from the input materials. The poultry feed is manufactured in a scientific and systematic manner with the use and assistance of sophisticated plant and machinery acquired at a substantial cost. Poultry feed is recognised not only by trade and commerce but also by the statutory authorities under Central Excise, Sales Tax etc as independent products Applying the ratio laid down in judicial decisions discussed in the order of CTT(A) we have no hesitation in holding that the assessee is engaged in manufacture or production of an article, contemplated in Sec 801B (2) (iii) . 16. We also find on the identical facts the Bangalore Bench of ITAT in the case of Komrala Feeds --Vs- DCIT 74 ITD 65 held that activity of producing poultry feed amounts to manufacture and therefore eligible for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irmity in the order of CIT(A) holding the assessee to be engaged in manufacture or production of an article We are therefore of the considered opinion that the assessee satisfies the conditions of Sec 80-IB(2) (iii) of the Act and is therefore eligible for deduction u/s 80IB We therefore uphold the order of CIT (A) directing A 0 to allow deduction u/s 80 IB to the assessee. 10. In Assessee s own case this Tribunal in ITA No.2227/Kol/2010 for AY 2007-08 by order dated 20.3.2013 allowed similar claim of the Assessee. From perusal of the said decisions of this Tribunal, it is apparent that this Tribunal has categorically held in the case that the assessee is engaged in manufacturing of poultry feeds and that the assessee is engaged in the manufacture or production of an article. 11. The learned DR however submitted that in the decisions rendered by the Tribunal, the decision rendered by the Hyderabad Bench of ITAT in the case of Venkateswara Feeds -vs- ACIT 22 Taxmann.com 234 (Hyd.) was not properly considered and therefore the decision rendered in Assessee s own case requires reconsideration. In this regard it was submitted that the Tribunal in the case of Venkateswar Feeds (s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue have overlooked this aspect. It was submitted that the decision rendered in Assessee s own case did not consider the decision of the Hyderabad Bench of ITAT in the case of Venkateswara Feeds (supra) and therefore the decision requires reconsideration. 13. The learned counsel for the Assessee while relying on the order of the CIT(A) and decision of the Tribunal in Assessee s own case in AY 2005-06 also submitted that in the case of Amrit Feeds (supra), the Hon ble ITAT had considered and distinguished the decision rendered in the case of Venkateswara Feeds (supra) by ITAT Hyderabad Bench. 14. We have given a careful consideration to the rival submissions. In the case of Amrit Feeds (supra), the Tribunal considered the decision rendered in the case of Venkateswara Feeds (supra) and held that the assessee in that case had claimed deduction under section 80IB on the activity of merely converting poultry mash feed into pellet feed and therefore that Bench has held that there was no change in the basic component or new or different article came into existence. As such, conversion was processing activity not manufacturing. The Tribunal held that the case of the assessee Amrit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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