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TMI Blog2022 (2) TMI 1209X X X X Extracts X X X X X X X X Extracts X X X X ..... that the steam entering the conditioning section is released slowly into the material for good conditioning. Thereafter, there are two other conditioning processes in which the poultry feed comes into contact with steam which is stated to ensure that the starch contained in the feed is gelatinised which is better for the growth of the chicken and at that level the feed attains a temperature of 850C thereby all the bacteria like E Coli, salmonella and other microbes get destroyed. After conditioning, the product goes in the pelleting section, then to the cooling section, then to the crumbling section, then to the sieving section and after passing the quality control test, it is ready for bagging. The assessee had also furnished details as to what are the raw materials required to make the poultry feed. We would be well-justified in following the decision in Sona Vets Pvt. Ltd. [ 2020 (3) TMI 130 - CALCUTTA HIGH COURT] which had considered the same product as that of the product produced by the assessee. Therefore, we hold that the tribunal was right in confirming the order of the CIT(A) and granting relief under Section 80IB of the Act. In the result, the substantial question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le or thing for the purpose of Section 80IB(5) of the Income Tax Act, 1961? (3) Whether in the facts and circumstances of the case, the learned Tribunal was justified in holding that disallowance under Section 14A of the Income Tax Act, 1961 read with Rule 8D of the Income Tax Rules, 1962 will not apply where no exempt income is received or receivable during the relevant previous year or by ignoring the provisions of Rule 8D that provides for computation of expenditure in respect of not only those investments, income from which does not form part of total income, but also those investments, income from which shall not form part of total income? We have heard Ms. Sucharita Biswas, learned standing counsel assisted by Mr. Soumen Bhattacharyya, learned advocate appearing for the appellant/revenue and Mr. J.P. Khaitan, learned senior counsel assisted by Ms. Swapna Das, Mr. Siddharth Das and Mr. Sourav Chunder, learned advocates appearing for the respondent/assessee. The order passed by the tribunal, impugned in this appeal, is a composite order covering six assessment years, i.e., 2008-09 to 2013-14. It is not disputed by the revenue that in so far as the appeals filed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich generates steam at 10 kgs/cm2 pressure and they also have insulated pipeline which carries the steam to the pellet section. The pressure reducing valve (PRV) is fitted before the pellet section which is reducing the pressure from 10 kgs to 1.5 kg/cm2 which will ensure that the steam entering the conditioning section is released slowly into the material for good conditioning. Thereafter, there are two other conditioning processes in which the poultry feed comes into contact with steam which is stated to ensure that the starch contained in the feed is gelatinised which is better for the growth of the chicken and at that level the feed attains a temperature of 850C thereby all the bacteria like E Coli, salmonella and other microbes get destroyed. After conditioning, the product goes in the pelleting section, then to the cooling section, then to the crumbling section, then to the sieving section and after passing the quality control test, it is ready for bagging. The assessee had also furnished details as to what are the raw materials required to make the poultry feed. This has been noted by the CIT(A) in paragraph 2.7.3 onwards of the order. The list of micro ingredients, list ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we have no hesitation to hold that the process undertaken by the assessee in producing the poultry feed amounts to manufacture. The simple test which can be applied is to examine as to whether the individual ingredients which are mixed together to form the poultry feed can be recovered and brought back to its original position. After the process is completed, if such reversal is not possible then it goes without saying that the final product has a distinct and separate character and identity. The learned senior standing counsel submits that the process involves only mixing of all the ingredients which ingredients are capable of being consumed as such even by human beings. In our view, this may not be the right test because though the individual ingredients are capable of being consumed by human beings, the end product, namely, the poultry feed obviously cannot be consumed by human beings. Therefore, the individual ingredients loose them its identity and get merged with the final product which is a separate product having its own identity and characteristics. Therefore, we are of the view that the CIT(A) and the tribunal were right in holding that the process undertaken by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... confirming the order of the CIT(A) and granting relief under Section 80IB of the Act. In the result, the substantial questions of law framed on this issue are decided against the revenue. The next substantial question of law is with regard to the disallowance under Section 14A of the Act. The tribunal after noting several decisions has directed the assessing officer to compute the disallowance as per Rule 8D by taking into consideration only those shares which have yielded dividend income in the year under consideration. Though the Tribunal has noted the decision of the Tribunal in REI Agro Ltd. Vs. DCIT (2013) 35 taxmann.com 404, there are several other decisions on the said point and the machinery provision under Rule 8D can be applied only with regard to the shares which yielded dividend income in the year under consideration. Therefore, we find that the tribunal rightly applied the legal principle and granted relief. Accordingly, the substantial question of law framed on the said issue, namely, the deduction under Section 14A of the Act is decided against the revenue. Thus, we are left with the substantial question of law no.1 which arises only for the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X
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