TaxTMI 
TaxTMI 
2020 (5) TMI 490
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....eld that the proceedings have been validly initiated under Section 148 of the Income Tax Act, 1961. 4. The brief facts of the cases are that petitioner is engaged in manufacture of flavour essences, mixed seasoning powders (dry mix) and formulated perfumery compounds etc. The petitioner started a new manufacturing unit in State of Jammu & Kashmir in the year 2007 after obtaining all the necessary registrations and approvals with an installed capacity of 5000 MT per annum. The petitioner has claimed deduction under Section 80IB of the Income Tax Act, 1961. In this regard, the respondent had specifically asked for the details of the new undertaking vide separate notices dated 30.11.2012 and 06.12.2012 for the Assessment Year 2009-2010. The petitioner replied to the same vide separate letters dated 19.02.2013. 5. By another notice dated 23.01.2014, the respondent further sought few more details regarding the new undertaking from the petitioner for the Assessment Year 2010-2011. The petitioner also replied to the same. Subsequently, respective assessment orders dated 26.02.2013 & 28.02.2014 were passed. W.P.No.309 of 2016 - Assessment Year 2010-2011 6. The respondent has ho....
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....xed Seasoning powders (dry mix). Liquid flavours and formulated perfumery compounds, commission u/s. 131(1)(d) was issued to ACIT, Circle I, Jammu to examine the facts as applicable to the claim made u/s 80IB(4). The report was received on 12.03.2015 as per which it was ascertained that the assessee is carrying out the process of blending and mixing various natural ingredients to prepare dry mix powders and liquid flavours. Since the activity carried out by the assessee do not amount to manufacture, hence the claim made by the assessee u/s 80IB(4) should be disallowed and brought to tax. 12. The reasons given in communication dated 07.05.2015 for reopening the assessment for Assessment Year 2010-2011 is little more elaborate. It would suffice to re-produce the following paragraph from the communication dated 07.05.2015:- As per the definition of manufacture u/s. 2(29BA), the transformation in the article should result in different name, character and use. In the present case, mixing of these raw materials does not change the character and the use of the product. Since, even the raw material being various powders (flavours) are commercially saleable and consumable, the u....
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....ub-heading 3302 10 10 deals with Synthetic flavouring essences. Relevant Heading and Sub-heading are reproduced below:- 3302 Mixtures of odoriferous substances and mixtures (including alcoholic solutions) with a basis or one or more of these substances, of a kind used as raw materials in industry; other preparations based on odoriferous substances, of a kind used for a manufacture of beverages. 3302 10 - ............... 3302 10 10 --- Synthetic flavouring essences. Thus, the activity undertaken by the petitioner amounts to manufacture. 21. The above notification exempts a "manufacturer" engaged in manufacture of goods specified in the 1st and the 2nd schedule to the Central Excise Tariff Act, 1985 other than the goods specified in Annexure I appended to the said notification and cleared from such unit located in the Industrial Growth Centre, Industrial Infrastructure Development Centre, or Export Promotion Industrial Park or Industrial Estate or Industrial Area or Commercial Estate or Scheme Area as specified in Annexure II from excise duty and additional duty of Excise as is equivalent to the amount of duty paid by the manufacturer of the goods, other than ....
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....new and distinct object or article or thing with a different chemical composition or integral structure; 26. Whether the activity undertaken by the petitioner amounted to manufacture or not, was deliberated upon before the respective assessment orders were passed. In this connection reference may be made to communication of the respondent dated 26.12.2013. In the said letter, the petitioner was specifically asked to explain the process of manufacture in specific and in detail with regard to the flavours produced, essences produced, flavouring essences formulated perfumery compounds and synthetic food colours preparation for claiming the benefit of deduction under Section 80IB of the Income Tax Act, 1961. Details of the plant and machinery installed in Jammu plant along with bills. The Petitioner has furnished all the details. 27. It is only thereafter the assessments were completed for the respective Assessment Years. Therefore, a mere change in opinion of the Assessing Officer subsequent to passing of the assessment orders would be contrary to the law laid down by the Hon'ble Supreme Court in CIT Vs. Kelvinator of India Ltd, (2010) 320 ITR 561 and in Income Tax Officer Vs. T....