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TMI Blog1986 (6) TMI 73X X X X Extracts X X X X X X X X Extracts X X X X ..... be present at the time of hearing if he so chose. Under the circumstances, we do not find any merit in this purely technical ground which was not substantiated. Consequently, we reject this ground. 3. The next ground states that the Commissioner (Appeals) erred in holding that blending of tea amounts to manufacturing or processing. Shri S.K. Lahiri explained before us that the word 'processing' has been typed in the ground of appeal due to inadvertence and the same may be ignored. He stated that the Commissioner (Appeals) has held that blending of tea amounts to manufacturing both for the purpose of allowances under sections 32A and 80J of the Income-tax Act, 1961 ('the Act'). He stated that the Commissioner (Appeals) has not held that blending of tea is an activity of processing of goods because that activity is not relevant for the purpose of sections 32A and 80J. He urged before us that the aforesaid ground might be understood in that sense. Then, he referred to the nature of the business carried on by the assessee which was to buy different types of tea from the market, blend them in different proportions, pack the blended tea and then sell the same. He stated that the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the activity did not amount to manufacture or production. Shri S.K. Lahiri stated before us that in the case before us also the thing bought by the assessee was tea and the thing sold by the assessee was also tea and so the assessee was not engaged in the manufacture or production of any article or thing. 4. Dr. D. Pal, the learned representative for the assessee, on the other hand, supported the order of the Commissioner (Appeals). He referred to the decision in the case of Chrestien Mica Industries Ltd. v. State of Bihar [1961] 12 STC 150 (SC). He took us through the said decision wherein it has been decided that the process of mining mica is a process of production within the meaning of the Bihar Sales Tax Act, 1947. In particular, he invited our attention to the following concluding remarks appearing therein: "Neither of the words 'production' or 'manufacture' is defined in the Bihar Sales Tax Act. But according to Oxford English Dictionary 'production' means amongst other things that which is produced ; a thing that results from any action, process or effort, a product ; a product of human activity or effort. It is obvious that what is described in the report above qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court has categorically stated therein that in Nilgiri Ceylon Tea Supplying Co.'s case, as decided by the Bombay High Court, it did not lay down the correct law. When different brands of tea were mixed producing a different tea mixture of a different kind and quality, there was plainly and indubitably processing of different brands of tea. The point to note at this stage is that blending of tea has been held by the Hon'ble Supreme Court in that case as amounting to processing only. Next, he referred to the decision in the case of G.A. Renderian Ltd. v. CIT [1984] 145 ITR 387 in which it has been held by the Calcutta High Court that the business of purchasing tea of different qualities, blending the same by mixing one type with another and selling it is an operation of processing and so it was entitled to the lower rate of tax under the relevant Finance Act which speaks of processing in addition to manufacture or production. Finally, Dr. D. Pal referred to the decision in the case of Tarai Development Corpn. v. CIT [1979] 120 ITR 342 (All.). In this case, it was held that an undertaking engaged in processing of seeds is an industrial undertaking and the income derived by it is enti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tivities amounted to processing only. In the same judgment, it has overruled the decision of the Bombay High Court in the case of Nilgiri Ceylon Tea Supplying Co. and held that blending of tea amounts to processing only. This is a direct authority on the issue before us which has been decided against the assessee. Similarly, the Hon'ble High Court at Calcutta in the case of G.A. Renderian Ltd. has also decided that blending of tea amounts only to processing. This is also a direct authority on the issue before us which has been decided against the assessee. So far as the case of Tarai Development Corpn. is concerned, we find that the said reported case was one dealing with processing of seeds which has been specifically mentioned in item 28 of the Fifth Schedule. We agree with the learned representative for the department that what has been specifically granted by the statute to particular items of goods cannot be extended to all other items of goods. In this connection, we find support for our conclusion from item 26 of the Fifth Schedule which speaks of tea and not processing of tea. Had the intention been otherwise, processing of tea would have been included in the Fifth Schedule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal has considered the issue and has set aside the matter for fresh consideration and decision by the ITO. We have gone through the aforesaid order of the Tribunal and we are in respectful agreement with the same. The facts and circumstances of the year under consideration remained unchanged. Hence, we vacate the decision of the Commissioner (Appeals) as well as the ITO on this point and restore the matter to the file of the ITO with a direction to dispose of the same afresh in accordance with law and the directions of the Tribunal in the order referred to above after giving a reasonable opportunity of being heard to the assessee. 9. The remaining six grounds in this appeal relate to the assessee's claim for deduction of a sum of Rs. 95,747 as bad debts. From the details filed before us by Shri A.K. Roy Choudhury, the learned representative for the assessee, we find that the assessee advanced a sum of Rs. 44,000 on 30-7-1969 to a person for purchasing a flat. As no flat was delivered to the assessee nor the amount was returned to the assessee, interest was charged year after year from 1969-70 to 1976-77. This interest amounted in all to Rs. 51,746. Those amounts of interest ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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