TaxTMI 
TaxTMI 
1978 (9) TMI 36
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....s engaged in the activity of production of processed seed and, as such, being a " priority industry " within the meaning of s. 8OB(7) was entitled to a deduction as provided in s. 80-I of the Act. The ITO negatived the claim. In appeal the judgment of the ITO was affirmed by the AAC of Income-tax. The AAC held that the assessee stored the potatoes belonging to others by maintaining the temperature at 35 degrees. It further found that by trying to preserve the seeds in the same condition in which it was placed, it cannot be said that the assessee was engaged in the production of processed seeds. The assessee took up the matter to the Income-tax Appellate Tribunal. The Appellate Tribunal agreed with the view of the AAC and held that the asses....
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....dian company and the hotel is for the time being approved in this behalf by the Central Government." The case of the assessee was that as it was engaged in the production of processed seeds mentioned at item No. 28 of the Sixth Schedule, as such, it was entitled to the benefit of the aforesaid provision. The first question that arises for consideration is whether the assessee is a priority industry. In order to be a priority industry it is essential that it must be engaged in the business of construction, manufacture or production of any one or more of the articles or things specified in the list in the Sixth Schedule. Admittedly, the assessee was neither constructing nor manufacturing any one or more of the articles or things specified ....
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....as engaged in an activity which may lead us to hold that it was engaged in the business of production of processed seeds. The income-tax authorities found that the assessee used to store the potatoes belonging to others and by maintaining the temperature at 35 degrees, it tries to preserve them in the same condition in which it was placed. The benefit of s. 80-I could accrue to a person who was engaged in the production of the processed seeds. Processing of seed is different from the keeping of potato-ware in the cold storage. In the present case, what was established from the record was that the assessee was storing the potatoes in its cold storages and was trying to preserve them in the same conditions. There is no evidence on record t....
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....g to others. There is no finding about the percentage of potatoes kept in the cold storages which were used or meant to be used as seeds in the assessment years 1969-70 and 1970-71, with which we are concerned in the present case. It is clear from the judgments of the income-tax authorities that they also negatived the claim of the assessee on this basis and found that the keeping of potatoes would not amount to the assessee's engagement in the production of processed seeds. The potatoes kept could be used for multifarious purposes but the benefit is confined to the matter of production of processed seed. It cannot be extended or applied to the entire quantity of potatoes which used to be kept by the assessee in cold storages. That being so....