TaxTMI 
TaxTMI 
2000 (1) TMI 143
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.... the Act. Subsequently, it was noticed that the assessee claimed deduction under section 80HHC amounting to Rs. 3,53,999 at 1% of the turnover and 5% of the incremental turnover. The claim was on items like turmeric, Kipoorkacholi, Kolinjan etc. which are primary agricultural commodities on which, no deduction is allowable under section 80HHC. Since in the subsequent years no such deduction was allowed by the Assessing Officer and this was upheld by the first appellate authority, the Assessing Officer reopened the assessment under section 147 obtaining the approval of the competent authority. Notice under section 148 was issued. In response to the notice, the assessee filed the return on 8-3-1991 disclosing the same income as shown earlier. It was the case of the assessee that these items are not primary agricultural commodities though these items have to pass through some more mechanical processes before they are sold in the market. The assessee also objected to the reopening of the assessment relying on the decision of the Kerala High Court in P.K. Mohammed (P.) Ltd. v. CIT [1980] 162 ITR 587/29 Taxman 511. The Assessing Officer held that the decision of the Supreme Court in Indi....
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....It was submitted before the learned CIT(Appeals) that as regards ginger, the commodity dealt with by the assessee was not green ginger but was dried ginger known as 'Chukku' in Malayalam. The quality, appearance and the use of dried ginger are entirely different from those of green ginger. The conversion is through a long process. The green ginger is first peeled to remove the roots and also skins. It is then washed to remove the dust and thereafter it is dried well. Drying process takes place by exposure to the sun and also by other manual and mechanical process. After this process green ginger is treated by mechanical as well as manual process and gain it is washed, dried and once again cleansed, removing the skin. Thereafter the process of fumigation is done. As far as turmeric is concerned, the skin is removed, then washed. Thereafter, it is boiled in big pans and dried in the open yard. Once again it is washed, dried and the dust particles are removed. Thereafter the commodity is garbled and fumigated. Coming to Kapurkachli the same process is carried on. Therefore, the case of the assessee was that these are goods processed and as a result they become distinct from the primar....
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....ss of cutting of heads and tails, peeling, deveining, cleaning and freezing they do not cease to be shrimps and prawns and become other distinct commodities. There is no essential difference between raw shrimps and prawns and processed or frozen shrimps and prawns." 8. Opposing the above, the learned counsel for the assessee submitted that the case law relied on by the learned departmental representative is not to be applied to the assessee's case. He submitted that though the decision went against the assessee in that case, it was only because of the fact that it was too late in the day to send back the matter for fresh appreciation of facts. In that case, the assessment year involved was 1977-78 and the matter came up before the Hon'ble Apex Court after 20 years. In the light of the above facts, the Hon'ble Apex Court declined to remand the matter for fresh appreciation of facts. Therefore, the learned counsel for the assessee submitted that the decision in Relish Foods' case does not lay down any general principle to be followed. Inviting out, attention to the decision of the Cochin Bench of the Tribunal in case of ITO v. M.M. Abdul Hamid & Sons [1993] 46 ITD 149, the learned....
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....) This section applies to all goods or merchandise [other than those specified in clause (b)] if the sale proceeds of such goods or merchandise exported out of India are receivable by the assessee in convertible foreign exchange. (b) The goods or merchandise referred to in Clause (a) are the following, namely:--- (i) agricultural primary commodities, not being produce of plantations;" A reading of the above section makes it clear that this section applies only to primary agricultural commodities, not being produce of plantation. The word 'primary' is defined in the Concise Oxford Dictionary, (Seventh Impression) as "earliest", "original", "of the first rank in a series", "belonging to first stage of development" etc. It cannot, therefore, be said that dried ginger is a primary agricultural commodity. So also the case with cardamom, turmeric and other items. When these commodities are subjected to some process, they do not retain their original character of primary agricultural commodities. In the case relied on by the learned departmental representative viz., Relish Foods' case, the Hon'ble Supreme Court approved the decision of the Hon'ble Bombay High Court in the case of....