TaxTMI 
TaxTMI 
2009 (10) TMI 37
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.... Tax Appellate Tribunal was right in holding that the manufacturing of "roasted groundnut" from "groundnut seed" was not by a manufacturing process but was the same salable commodity with variation in demand. ii) Whether the assumption of the Income Tax Appellate Tribunal that the appellant was a trading unit and not a manufacturing unit within the meaning of Section 80IA (80IB after the amendment of 2000-2001) is sustainable in law and is in complete disregard to the binding interpretation given by the Hon'ble Supreme Court in the case (2001) 251 ITR 323 Aspinwal & Company Ltd. Versus Commissioner of Income Tax. iii) Whether in the facts and circumstances of the case, the ITO, Nurpur and the Income Tax Appellate Tribunal were justifi....
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....ocessed or frozen shrimps, prawns and lobsters are commercially regarded the same commodity as raw shrimps, prawns and lobsters. When raw shrimps, prawns and lobsters are subjected to the process of cutting of heads and tails, peeling, deveining, cleaning and freezing, they do not cease to be shrimps, prawns and lobsters and become another distinct commodity. They are in common parlance known as shrimps, prawns and lobsters. There is no essential difference between raw shrimps, prawns and lobsters and processed or frozen shrimps, prawns and lobsters. The dealer and the consumer regard both as shrimps, prawns and lobsters. The only difference is that processed shrimps, prawns and lobsters are ready for the table while raw shrimps, prawns and....
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....dras High Court held as follows:- "The fact that the chicory powder is used for consumption in combination with coffee powder does not make the chicory powder any different in so far as its identity is concerned, as chicory. Chicory powder is chicory in powder form and nothing else. Mere change in the form of the same commodity does not necessarily involve change of identity. The pineapple fruit when plucked from the tree and even after it is cut into pineapple slices retains the same identity as pineapple. Chicory powder and chicory root have the common identity of being chicory. The change in the form to powder in the case of chicory and to slices in the case of pineapple does not result in a change of identity." It would be pertinent ....
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....red the question whether the process of manufacturing coffee beans from raw berries amounts to manufacture. The Apex Court after making reference to the Encyclopedia Britannica held that coffee is a beverage made from roasted seeds (beans) of the coffee plant and found that the process of coffee into roasted coffee went through nine processes. Firstly the coffee was dried in the sunlight. Then the outer husk of the coffee been was removed, if necessary, by mechanical operation. The coffee seeds were then extracted and polishing was done. Thereafter, gradation was done where the good coffee was separated by mechanical as well as manual grading. The Court held that net product is absolutely different and separate from the input. The Apex Cour....
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....ced reliance on the latest judgment of the Apex Court in Computer Graphics Ltd. v. Commissioner of Income Tax, 2009 (308) ITR 98 wherein the Apex Court has made reference to a large number of earlier decisions and held that in Section 80-I, the word 'manufacture' had been used in juxtaposition with the word 'produce' and came to the conclusion that if by the process of production something is produced and brought into existence which is different from that, out of which it is made, in the sense that the thing produced is by itself a commercial commodity capable of being sold or supplied, the same will amount to manufacture. 13. After considering all the aforesaid judgments, it is apparent that during 'manufacture' a new material should b....
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....nd character and changed into roasted coffee beans. 16. In Computer Graphics' case, the Apex Court was dealing with a matter in which jumbo film rolls were converted into smaller film rolls. Indisputably the jumbo film rolls could not be used in cameras. They are cut and splied into requisite sizes making them useable in cameras. This was held to be manufacture. The film rolls now produced have a totally different identity from the jumbo rolls which could not be used in cameras. 17. Coming to the case in hand, groundnut is an edible item even without roasting. After roasting, it remains an edible item. It is still called groundnut. Just by adding salt or roasting groundnut, it cannot be said that the process of manufacture has t....