2013 (11) TMI 1327

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....sessee claimed that the assessee is engaged in processing of the tea and therefore, the assessee's case falls under item 12 to Schedule 14, which reads that "Processing and raising of plantation crops-tea, rubber, coffee, coconuts, etc." and the words used and between "processing" and "Raising" represent "Or". The AO was of the view that since the assessee was not engaged in the plantation of the tea and was only engaged in the processing of the tea, therefore, he disallowed the deduction. The assessee went in appeal before the CIT(A). The CIT(A) took the view that the deduction under section 80IC will be available to both the industries which are engaged in processing of tea, coffee, etc. or engaged in raising of the plantation of tea, coffee, etc by holding as under:      "5.2 The way A.O. has interpreted the meaning of the processing and raising that assessee company being only producer of black tea from purchased green leaf is not engaged in processing and raising of plantation crop (in this case tea) and is not entitled to deduction u/s 80IC. Such a narrow interpretation is unwarranted to the fact of the present case. The Part-A of Schedule 14 does not say....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....with the appellant that exemption notifications are beneficial piece of legislation. While interpreting these notifications one must bear in mind that the object being one of granting the exemption. Therefore, an interpretation must be put which does not defeat the whole purpose of the exemption. The present notification/ Schedule is also intended for the benefit of all concerns and deserves a liberal construction. In the manner the meaning of the term 'processing and raising' has been explained in the impugned order by the A.O., it would make it unworkable. The Hon'ble Supreme Court in Collector of Customs vs. United Electrical Industries Ltd. [1999 (108) ELT 609) has rightly held that the notification has to be interpreted to give true import and meaning, not to make it purposeless and nugatory. It is thus submitted that the ground on which the order-in-original has been passed denying the benefit of deduction is not a tenable ground in view of the wordings of impugned notification/schedule.      5.6 As per Rule of beneficial interpretation, if there exists more than one interpretation, the interpretation, which is most favourable to the assessee, shall preva....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....cision of the Hon'ble Supreme Court in the case of Bajaj Tempo Ltd. v. CIT 196 ITR 188 (SC). Reliance was also placed on the decision of the Hon'ble Supreme Court in the case of Mysore Minerals Ltd. v. CIT 239 ITR 775 (SC) where it was held that if there are two possibilities of taxing provisions, the one which is favourable to the assessee should be preferred. Alternately, it was submitted that in case the deduction is not allowed under section 80IC, it should be allowed under section 80IB. The ld. DR relied on the order of the AO. 5. We have carefully heard the rival submissions and perused the materials on record along with the orders of the taxing authorities. It is not denied by the ld. DR that the assessee was entitled for the deduction in the earlier years under section 80IB and deduction under section 80IC claimed by the assessee for the first time in assessment year 2005-06. We also noted that in view of the proviso (3) inserted by the Finance Act, 2003 w.e.f. 01.04.2004 under section 80IB(4), an assessee is not entitled for the deduction under section 80IB(4) in case, the assessee is fallen within the provisions of section 80IC(2). The main issue involved in both these a....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....place of the legislative intent as is available from a plain reading of the statutory provisions. The Hon'ble Supreme Court in the case of Orissa State Warehousing Corpn v. CIT 237 ITR 589 (SC) has clearly held that an exemption is an exception to the general rule and since the same is opposed to the natural tenure of the statute, the entitlement for exemption, ought not to be read with any latitude to the taxpayer of even with a wider connotation to restrict its application to the specific language used depicting the intent of the Legislature. The decision of the Hon'ble Supreme Court is binding on us. This decision is delivered subsequent to the decision of the Hon'ble Supreme Court in the case of Bajaj Tempo Ltd. (supra) on which the ld. A.R. has vehemently relied on. This is the settled law in view of the decision of Govinda Niak v. West Patent Press AIR 1980 kar. 92 (FB) and Bhika Ram v. Union of India [1999] 238 ITR 113 (Delhi) that even there is a conflict between the two decisions of the Supreme Court, the one decided by a Larger Bench is binding. If both decisions are rendered by the Bench consisting of equal number of Judges, the latter decision is binding. 5.1 We have a....