TaxTMI 
TaxTMI 
2013 (12) TMI 251
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....he order dated 16-11-2005 passed by the Commissioner of Income Tax Appeals (Appellate Authority) in appeal No.ITA/271/CIT(A)/MNG/2003-04. In the appeal before the Appellate Authority the assessee had challenged the order dated 25-2-2004, under Section 143 (3) of the Income Tax Act, 1961 (for short the "Act") passed by the Assistant Commissioner of Income Tax, Circle-I, Bangalore (for short "Assessing Officer"). Thus, all the three authorities negatived the claim of the assessee seeking deduction under Section 80IB of the Act. The assessee had claimed deduction contending that bottling of LPG gas in the cylinders amount to production/manufacturing activity and hence eligible for deduction under Section 80IB of the Act. 3. The present appe....
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....ing of LPG gas amounts to production or manufacturing activity for the purpose of deduction under Section 80HH, 80I/80IA of the Act. After considering its other judgment and the judgment of the Gujarat High Court in Bharat Petroleum Corporation Ltd. vs. State of Gujarat, the Bombay High Court in paragraph-4 observed thus: "4. Since the Tribunal in the impugned order has relied upon the decision of this Court and the consequent order of the Electricity Ombudsman to hold that the activity of bottling LPG Gas is a very specialized process and the same is considered to be an activity of manufacture. The Tribunal in the impugned order had observed to the effect that the word used in Section 80HH, 80I/80IA of the Act is manufactur....
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....r consideration of the Supreme Court was whether the small scale industry which was engaged in bottling of anhydrous ammonia could be said to be entitled to the exemption from payment of sales tax on the ground that it was manufacturing such goods since there was a general exemption offered by the Andhra Pradesh Government by G.O.Ms.No.117 dated 17th March 1993 to the small scale industry. The question in short which the Supreme court considered in that case was whether the assessee could claim exemption on the facts of that case. The Supreme Court took the view that "the authorities have based the interpretation of word 'manufacture' on the law relating to excise and it was erroneous to do so. It was observed that in the State Sales Tax Ac....
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.... viz., production, manufacturing and processing of tea, and observed that "tea is produced in tea gardens. This is first stage called production of tea. The second stage is manufacturing of tea. In this stage, the tea leaves are plucked form the tea bushes and by mechanical process, tea leaves are converted to tea. This second stage is considered manufacturing of tea. The third stage is blending of different qualities of tea in order to smoothen its marketability. This third stage is considered processing tea." 9. Relying on this analogy, Mr.Aravind, vehemently submitted that the assessee is not a manufacturer of either gas or of empty cylinders and the assessee is involved only in processing of gas, viz., filling gas into gas cylinders ....
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....nge, or a series of changes, take the commodity to the point where commercially it can no longer be regarded as the original commodity. The word 'production' or 'produce' when used in juxtaposition with the word 'manufacture' takes in bringing into existence new goods by a process which may or may not amount to manufacture. It also takes in all the by-products, intermediate products and residual products, which emerge in the course of manufacture of goods, The next word to be considered is 'articles' occurring in the said clause. What does it mean? The word is of the defined in the Act or the Rules. It must, therefore, be understood in its normal connotation - the sense in which it is understood in the commercial world. It i....