2014 (2) TMI 33

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....llant was not a manufacturer/producer of Mathia and Chorafali and therefore, was not entitled to sec.10B relief in respect of profits therefrom?" This appeal concerns the assessment year 2008-09. The assessee was engaged in the business of manufacturing and exporting of food items such as mathia, chorafali, paratha and other tandoor items. The assessee claimed benefit under section 10B of the Income Tax Act, 1961. The Revenue contested the claim on various grounds including that the assessee cannot be stated to be manufacturing or producing an article or thing. Ultimately when the issue reached the Tribunal, by the impugned judgment, the Tribunal split the issue in two parts. Insofar as the majority of the claims of the assessee for d....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....t it appears that in the case of "mathia" and "chorafali" the assessee does repackaging. Further from the details of sales submitted by the assessee we find that the sales includes sale of "coriander leaves", "chorafali", "custard apple pulp" "magaj ladu", "IQF shredded coconut" and "misc. items". From the details it appears that the aforesaid items are sourced ready made and not manufactured in the factory of assessee. The total sales of such items as per the summary is Rs.85,68,942/-. We are of the view that for the aforesaid items which have been outsourced and not manufactured in the premises of the assessee but have only been repackaged with some other connected activities at the assessee's premises cannot be considered to be a manufac....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....s not manufactured by the assessee but the manufacturing activity was outsourced. The question therefore is whether for export of such items, deduction under section 10B of the Act would be available. Section 10B of the Act applies to any industrial undertaking which manufactures or produces articles or things and exports it. Admittedly, in the present case, the snacks were manufactured by the suppliers of the assessee and no manufacturing activity was done by the assessee till the stage of preparation of such items. If some follow up action is taken for packing and storing the same would not partake the character of activity amounting to manufacturing or producing an article or thing. The decision of this Court in the case of Prabhudas ....