1984 (10) TMI 84

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..... . CIT vs. M/s A. Mukherjee & Co. (1978) 113 ITR 718 (Cal). 4. The assessee is a partner of a firm styled M/s Balh arsah Timber Depot whose business activities consisted of purchasing logs and converting them with the held of sawing machines planks and sized boards as per specifications of its clients. The case of the assessee was that the firm was engaged in the processing of goods and so it became under the Explanation to s. 5(1)(xxxii) so that it becomes entitled to the relief under s. 5(1)(xxxii) of the Act. The WTO did not agree with the claim of the assessee and rejected the same. 5. The assessee appealed to the AAC and reiterated his claim relying on the decision in the case of Noka Navashimbulu 2 Taxman 141 and CIT vs. Radha Naga .....

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..... er the activities carried on by the assessee before us can be said to be processing of goods. The term "process" has not been defined in the Act. However, it is well-settled that "processing" has a wider meaning than the term "manufacture". At some point processing and manufacture may merge but a certain activity may amount to processing even though it may not amount to manufacture vide the decision in the case of Mahabir Prasad (1973) 31 STC 628 (Cal) wherein the powdering the whole black paper and turmaric was held to be processing of goods. Similarly, in the case of Sri Om Prakash Gupta, the mere converting of camphor powder into camphor cubes was held to be processing of goods. In the case of Chowgule & Co. (P) Ltd. & others vs. Union o .....

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..... ad given an opinion that the answer to the question posed would depend on the nature of the activity of the forest lessees; however, if the process involved is not merely conversion of standing trees into fire-wood but also manufacture of new saleable commodities, the benefit of deduction under ss. 80J and 80HH would be available." It is clear that the Circular issued says that mere conversion of standing trees into firewood will not amount to manufacture. The circular is not concerned with the meaning of "processing of goods" as it refers to ss. 80J and 80HH only. But this circular indirectly helps the case of the assessee because the assessee was not engaged merely in producing firewood and the case of the assessee was not that the firm .....

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