2013 (4) TMI 941

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.... in the business of sale of ayurvedic products and filed a return admitting total income of Rs. 1,36,14,237/- and claimed deduction under section 80-IB of the Income Tax Act, 1961 ('the Act' for short) to the tune of Rs. 58,34,674/-. The Assessing Officer in the assessment order observed that the assessee is an importer of bulk drug powder. After importing the assessee is filling up the powder into capsules and marketing them in India. The assessee claimed the same as manufacturing activity and claimed deduction u/s 80-IB of the Act. The Assessing Officer rejected the claim of deduction u/s 80-IB on the ground that the activity of the assessee company is filling up of raw material (powder) into gelatin capsules which will not amount....

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....The capsulation involves various stages of production like filling into the capsules, polishing of the surface, sorting, inspection of filled-in capsules, bottling of the capsules, labelling of the bottles, batching of the product, printing, shrink packing and putting the red/blue seal, placing of sleeves and packing the bottles by putting in polythene cover etc. These activities are done by maintaining specific temperature and all these are governed by various Acts of the Government. Hence, according to the assessee, this is said to be manufacturing activity. 19. We have carefully gone through the above activities. In our opinion, all these activities do not bring in any new article or product into existence. The mushroom powder e....

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....xpression 'manufacture' or 'producing' any thing or article under s. 80IB(2)(iii) has been used in a generic sense and within its ambit it does not include any processing of goods, which does not bring out a new or commercially distinct commodity. Accordingly, putting the mushroom powder into the gelatin capsule does not amount to manufacture or production of any commercially distinct commodity. Therefore, we hold that the assessee is not entitled for deduction under s. 80-IB. This ground of the assessee is rejected." 5. It can be seen from the above that the Coordinate Bench of this Tribunal in assessee's case has held that the assessee which is engaged in the activity of putting mushroom powder into the gelatin capsule does not a....