TaxTMI 
TaxTMI 
TaxTMI 
2024 (10) TMI 997
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....ifferent types of potato based snacks and namkeen. The assessee has filed its return of income for the respective years and claimed deduction u/s 80IB(11A) for each of the year under appeal. The A.O while passing the assessment orders u/s 143(3) of the Act for the Assessment Years 2017-18 to 2019-20 and reassessment orders interalia for the Assessment Years 2012-13 and 2013-14 has disallowed the claim of deduction u/s 80IB(11A) which was challenged by the assessee before CIT(A). The CIT(A) has allowed the claim of the assessee u/s 80IB (11A) on merits however, the grounds raised by the assessee against the validity of reopening of the assessment have been dismissed by the CIT(A). Therefore, aggrieved by the impugned order of the CIT(A) both the department as well as the assessee has filed these appeals and Cross Objections. 4. The revenue has raised common grounds in these appeals as under: "Whether on the facts and circumstances of the case, the Ld. CIT(A) was correct in allowing the deduction u/s 80IB(11A) when there are judicial findings holding that the activities of the assessee would constitute the manufacturing and not processing eligible for deduction." 5. The assessee ....
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....ed its return of income on 30/09/2012 by electronic mode disclosing Gross Total Income and Total Income of Rs. 12,48,93,400/- and Rs. 6,01,46,520/- respectively and deduction under chapter - VIA : Rs. 6,47,46,882/-). The assessee's case was selected for scrutiny by issuing notice u/s 143(2). After selecting the case for scrutiny, the AO conducted a detailed and exhaustive scrutiny by issuing questionnaires dated 19/08/2013, 29/07/2014, 01/10/2014 and requiring information during the assessment proceedings, and requiring the assessee to furnish various details regarding the affairs, income, expenses and deduction of the assessee. The assessee submits that in response to various queries, the assessee has furnished all the desired information and requisite details which were required by AO. Simultaneously the assessee also produced the books of accounts for verification before the assessing authority and thus there is a presumption that the AO who completed the assessment of the assessee had applied his mind to the details and books of accounts furnished by the assessee during the course of assessment proceedings. Finally an order of assessment dated 30/09/2015 was passed by the AO, a....
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....ction 148 or to disclose fully and truly or material facts necessary for assessment for that assessment year. It would thus be clear that the proviso imposes further conditions and fetters on the powers of the AO in case where the assessment is completed u/s 143(3) and a period of four years from the end of relevant assessment year has expired. A combined reading of the main part of section 147 along with the proviso thus shows that in cases covered by proviso, the AO should not only have reason to believe that any income chargeable to tax has escaped assessment but it is also necessary that such escapement must be due to the circumstances mentioned in the proviso i.e non furnishing of return u/s 139 or 142 or 148 or due to failure of the assessee to disclose fully and truly or material facts necessary for assessment. The assessee submits that in the instant case there is neither any escapement within the meaning of section 147 nor it is a case where there is any failure on the part of assessee to disclose fully and truly all material facts necessary for purpose of assessment. h) The Ld. AR for assessee submits that since the present matter relates to assessment year 2012-13 for ....
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....n state that the requirements of the proviso are satisfied in the instant case and the alleged escapement (if at all) is on account of failure on the part of assessee to disclose fully and truly all material facts necessary for purpose of assessment. k) In support of this contention he has relied upon the decision of Supreme Court in the case of Gangasaran & Sons Pvt. Ltd. Vs ITO reported in 130 ITR as well as ITO vs. Lakhmani Mewaldas reported in 103 ITR 437 and submitted that the Hon'ble Supreme Court has held that there should be sufficient and adequate material to justify the formation of belief that income assessable to tax is escaped assessment. He has also referred to the following decisions:- (i) Gujarat High Court in the case of Dishman Pharmaceutical and Chemicals Ltd Vs DCIT reported in 346 ITR 328(Guj). (ii) MP High Court in the cases of Smt. Prabha Rajyalaxmi Vs WTO reported in (1983) 144 STC 180 and Lokendra Sing Rathore v/s WTO (1985) 153 ITR 466. 7. The next contention of the Ld. AR is that the assessment has been reopened by the A.O on the basis of change of opinion as the A.O during the scrutiny assessment u/s 143(3) of the Act has formed the opinion that t....
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....s escaped assessment due to failure on the part of the assessee to disclose fully and truly all materials facts necessary for assessment. The assessment has been reopened by the Assessing Officer on the basis of the scrutiny assessment for the subsequent years i.e. 2017-18 to 2020-21 therefore, the order of the Assessing Officer for the subsequent year is sufficient material to form the belief that the income assessable to tax for not disallowing the claim of deduction u/s 80IB(11A) for the earlier assessment years i.e. 2012-13 and 2013-14 amounts to escapement of income assessable to tax. Therefore, there is direct nexus between the assessment orders passed in the subsequent years and the reason to believe that the income assessable to tax as escaped assessment for the Assessment Years 2012-13 and 2013-14. He has relied upon the order of the CIT(A) on this issue and submitted that the CIT(A) has relied upon various judgments of Hon'ble Supreme Court as well as Hon'ble High Courts on this point. Thus the Ld. DR has submitted that the reopening of the assessment is valid. 10. We have considered rival submissions and perused the relevant materials record. Since the assessee has rais....
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.... time of original assessment proceedings u/s 143(3) of the Act but the A.O has opined that the business of the assessee is of processing and manufacturing and sales of different types of potato based snacks and namkins and therefore, the assessee is not in the business of processing, preservation and packaging of fruits or vegetable. These reason recorded by the A.O do not reveal any new fact or material on the basis the A.O has taken this view that the assessee is not in the business of processing of vegetable but the information on the basis of which this opinion has been formed by the A.O was already available with the A.O and therefore, this is a case of change of opinion on the part of the A.O based on the same facts and record already available with the A.O at the time of passing the scrutiny assessment u/s 143(3) of the Act. Though the A.O has recorded that the income chargeable to tax escaped assessment by reason of failure on the part of the assessee to disclosed fully and truly all material facts necessary for its assessment however, the A.O has not indicated what information or facts were not disclosed by the assessee at the time of original scrutiny assessment. Therefor....
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....sment. Therefore, post 1-4-1989, power to reopen is much wider. However, one needs to give a schematic interpretation to the words "reason to believe" failing which, we are afraid, section 147 would give arbitrary powers to the Assessing Officer to re-open assessments on the basis of "mere change of opinion", which cannot be per se reason to reopen. We must also keep in mind the conceptual difference between power to review and power to re-assess. The Assessing Officer has no power to review; he has the power to reassess. But reassessment has to be based on fulfilment of certain pre-condition and if the concept of "change of opinion" is removed, as contended on behalf of the Department, then, in the garb of re-opening the assessment, review would take place. One must treat the concept of "change of opinion" as an in-built test to check abuse of power by the Assessing Officer. Hence, after 1-4-1989, Assessing Officer has power to reopen, provided there is "tangible material" to come to the conclusion that there is escapement of income from assessment. Reasons must have a live link with the formation of the belief. Our view gets support from the changes made to section 147 of the Act....
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....ent was reopened within 4 years from the end of the assessment year. The Hon'ble High Court has held that even in case of reopening of the assessment based on the assessment of subsequent year the reopening after 4 years is not valid as it is hit by the proviso when there was no failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment and consequently the conditions as provided in the proviso to section 147 is not satisfied. Whereas the reopening within 4 years from the end of assessment year was held to be valid when assessment was reopened on the basis of the assessment year of the subsequent year. The Hon'ble High Court has held in para 10 to 14 as under (324 ITR 48): "10 In dealing with the merits of the rival contentions, it must at the be noted that during the course of the proceedings under section 143(3), the Assessing Officer was duly apprised of the circumstance that the petitioner was acting as an agent for the collection of subscriptions and procuring advertisements for the benefit of its foreign principal. The order of assessment makes a reference to the nature of business of the petitioner in the following terms: ....
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....nt was passed under section 143(3). That however would not give a valid reason to reopen the assessment beyond a period of four years, even assuming that the Assessing Officer had erred in not doing so, unless there was a failure on the part of the assessee to fully and truly disclose all material facts necessary for assessment. Absent the existence of the jurisdictional condition precedent, the assessment cannot be reopened beyond a period of four years after the expiry of the relevant assessment year, as has been done in the present case. In the circumstances, the notice for reassessment is liable to be quashed and set aside solely on the ground that the Revenue has failed to establish the existence of the jurisdictional condition precedent to the exercise of the power to reopen an beyond a period of four years of the expiry of the relevant assessment year. 13 The petition would accordingly have to be allowed. Rules is made absolute in terms of prayer clause (a), by quashing and setting aside the notice dated March 25, 2009 and the order dated September 29, 2009. 14 The facts of this writ petition, it is common ground between both the learned counsel, are the same as in Writ ....
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....position or integral structure of the vegetable which would be classified as manufacturing as it brings into existence a new product. As per provisions of section 80IB(11A), the assessee was entitled to claim deduction under the said provisions if it fulfils all the conditions specified therein which was not justified in the assessee's company case. However, in the assessee's company case, the assessee company was engaged in the business of manufacturing and sales of different types of potato based snacks and namkeen and not in the eligible business of processing, preservation and packaging of fruits or vegetables. Since the assessee company was not deriving its profit from the eligible business as per provisions of section 80IB(11A) of the Act. He has relied upon the order of A.O as well as the decision of Mumbai Bench of Tribunal dated 05.03.1995. 11.1 On the other hand Ld. AR of the assessee submitted that the beneficent intention or scheme of the legislature while enacting the Section 80 IB (11A) of the Act which was initially brought into the statue book by the Finance Act of 2001 w.e.f 01.02.2002 by granting deduction in a case of the integrated business of handling,....
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....the Hon'ble Supreme Court and other Hon'ble Courts have also defined the processing in their judgments which are mentioned below: a) Delhi Cold Storage Pvt. Ltd. vs. CIT (1991, 191 ITR P.656), the Supreme Court was concerned with the question whether the assessee company running a cold storage could be held to be an industrial company for the purposes of Section 2(7)(c) of the Finance Act, 1973. An industrial company has been defined to mean a company which is mainly engaged in the manufacture or processing of goods and other activities specified therein. The question was whether the cold storage of the appellant can be said to be engaged in the processing of goods? The Supreme Court answered the question in the negative for the reason that the stored articles cannot be said to have undergone a process mainly because there was reduction of moisture content as a result of long storage. At the same time, the Supreme Court observed that processing "is a term of wide amplitude and has various aspects and meanings". It was pointed out that in common parlance 'processing' is understood as an action which brings forth some change or alteration of the goods or material which is subjected....
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....nt to manufacture. c) In the case of Commissioner of Wealth Tax vs. Mohini Rai (1999, 240 ITR pg. 636), the Gujarat High Court observed that in order to characterize an operation as processing, it is necessary that the commodity must, as a result of the operation, experience some change. The clear principle that runs through the above decisions is that notwithstanding the extent of processing and the changes that occur to the original commodity by reason of series of operations, it could still amount to processing of that original commodity. 11.6 The Ld. AR submits that potato-chips are manufactured by processing the Potatoes. It involves various steps which are shown in below mentioned chart: (i) Potato sorting (iv)Blanching (vii) Frying (ii) Potato input in elevator (v) Slicing and washing (viii)Flavour Application (iii) Destoning (vi) Peeling That as a first or initial step, the potatoes are sorted as per their size and then put into elevator. After that it goes through de-stoning to remove foreign particles like stones and clay etc. and the outer skin of the potato is removed to give it a smooth spherical shape. Then it is sliced using slicers with s....
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.... ITA No.2325/2006 order dated 01.10.2010. 11.8 Ld. AR for assessee further submitted that the assessee company has claimed deduction u/s 80IB(11A) and this claim is made on the ground that potatoes (vegetable) based snacks are exempted from taxes u/s 80-IB (11A) being profits derived from the business of processing of vegetables which are evident from the Form No. 10CCB (Audit Report), Food processing Policy 2008 of Department of Horticulture and Food Processing and copy of Tenth Plan Schemes of Ministry of Food Processing Industries, Govt. of India. are attached herewith. Kindly refer to Para 1 on page 2 with the main heading "Scheme for Technology up gradation/Establishment/Modernization of Food Processing Industries". It clearly says that the scheme will cover setting up/expansion/modernization of Food Processing industries covering all segments viz. Fruits & Vegetables, milk products, meat, poultry, fishery, cereal, pulses, oil seeds and such other agri-horticultural sectors leading to value addition and shelf life enhancement including food flavours and colours, oleoresins, spices, coconut, mushroom, hops, etc. It says that the scheme will cover the following activities i.e s....
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....e steps in the process of making the chips, namkins and other snacks in the chart as under: 12.1 Thus, the process undertaken by the assessee involves storing of potato, destoning of potato, peeling, slicing and washing, blanching, frying and flavour application. Each step is also explained that the potato is stored as per size and put into the elevator for removing the foreign particles like stone, clay etc. Thereafter the outer skin of the potato is removed to give it a smooth spherical shape before it is sliced into chips using slicer so as to get consistent thickness essential for giving correct size and texture to the chips. The slices are then washed to remove the starch to avoid stickiness during cooking and to prevent starch from entering the cooker and becoming carbonized. The resultant potato slices are fried. All these process is under strict control of temperature and conditions so as to get desired potato based chips and other snacks. The packaging is done in the manner to preserve this processed potato chips for a longer life and the individual packs are filled with nitrogen gas to preserve the chips. The end product is also potato based chips and snacks and therefor....
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....nd has various aspects and meanings". It was pointed out that in common parlance 'processing' is understood as an action which brings forth some change or alteration of the goods or material which is subjected to the act of processing. Another case which deserve reference is the case of Chowgule & Co. (P). Ltd. v. Union of India [1981] 47 STC 124. The three-judge Bench of Supreme Court held that the blending of iron-ore in the course of loading through the mechanical ore handling plant amounted to processing of ore within the meaning of section 8(3)(b) of the Central Sales Tax Act and the mechanical ore handling plant fell within the description of machinery, plant, equipment used in the processing of ore for sale. The following pertinent observations were made while explaining the connotation of the word 'processing' : ". . .The nature and extent of processing may vary from case to case; in one case the processing may be slight and in another it may be extensive; but with each process suffered, the commodity would experience a change. Wherever a commodity undergoes a change as a result of some operation performed on it or in regard to it, such operation would amo....
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....orm of slices. In other words, the expression should not be confined to minimal processing that would not change the identity of the fruit. If processing and preservation is to be confined only to fruits as such and not to be derivaties from the fruits, the benefit intended to be given to agro-processing industries will operate in a very limited sphere, thereby defeating the very object of the provision. The extraction of juice and oil from the fruits or further converting the homogenized juice into fruit powder and adding the substances meant for preservation would legitimately fall within the sweep of the expression 'processing'. The fact that the fruit assumes a different form or that a series of operations are involved in preparing the mixed juices and concentrates which could be preserved for long does not take it out of bounds of processing. Processing in its wider sense would still be aptly applicable. 11. I am therefore of the view that the applicant is entitled to the benefit of deduction contemplated in sub-section (11A) of Section 80-IB and the question has to be answered in the affirmative subject however to the clarification that the conditions laid down in sub-secti....
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....when there is a specific entry, the tax applicable to that entry alone has to be applied and it is not expected to go to the residuary item. 6. From the perusal of the judgment of the first Division Bench of this Court, it is very clear that the chips will fall under the category 'processed vegetable' and accordingly, the same is liable to be taxable under Entry 107 in Part B of the first Schedule to the TNVAT Act. Therefore, it cannot be taxed under Entry 69 at the rate of 12.5%. 1 respectfully follow the judgment of the Hon'ble First Division Bench and conclude that the impugned order passed by the respondent is not sustainable. Further, the clarification issued by the Commissioner of Commercial Taxes is not accepted by the Hon'ble Division Bench. Once it is decided that the clarification is not sustainable, it cannot be followed in other cases on similar issues". 12.3 Thus, it is clear that the Hon'ble High Court has held that the products (chips) sold by the assessee are to be classified as processed vegetable and not to come under the residuary entry for the purpose of commercial tax. Once the chips is classified as processed vegetable for the purpose of com....
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.... classified under the residuary heading at all. This position is clearly laid down in rule 3(a) of the Interpretative Rules set out above. As per the said interpretative rule 3(a), the heading which provides the most specific description shall be preferred to the heading providing a more general description. This position is also well-settled by a number of judgments of this court. Reference may be made to Bharat Forge & Press Industries (P) Ltd. Collector of Central Excise 1990 1 SCC 532.". Similar view was reiterated in Mauri Yeast India Pvt. Ltd. Vs. State of U.P. & another, 2008 U.P.T.C. 729 11. In the light of the aforesaid, unless the department can establish that the goods in question can by no conceivable process of reasoning be brought under any of the tariff items, resort cannot be had to the residuary category and if there is a conflict between entries, then, the residuary category should not be taken into consideration. others. A Division Bench of the Gauhati High Court, by the judgment dated 29.04.2009, held that the sale of potato chips made by Pepsico India Holding Pvt. Ltd. is covered by Entry 80 of Part A of Schedule II to the Assam Value Added Tax Act, 2003 ....
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....d are used as fodder, especially in Europe. In the United States, annual per-capital consumption is 19 kg (42 lb) of fresh potatoes and 13 kg (30 lb) of processed potatoes, such as frazen French fries and potato chips." 17. The New Encyclopedia Britannica, Volume 19, 15th Edition classifies vegetables on the basis of parts of the plant, such as. root, stem, tuber, i.e., used for food. Potato is a tuber and states about potatoes as under :- "Potato. Potatoes should be smooth, shallow-eyed, and clean. Varieties differ as to shape, size, colour of skin, and cooking qualities. Suitability for processing requires such qualities as high dry matter content good texture and colour low homemakers used potatoes in, various processed forms, particular frizer Freuchfried and dehydrated, or instant, mashed types. Potato chips have long been established as a major processed product. Instant mashed potato, in both potato granules and potato flake form, sliced and diced potato, and potato flour comprise the principal dehydrated products now in commercial production. One of the principal uses for dehydrated potato dice is as an ingredient in the manufacture of canned meat products." 18. The M....
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....me for any purpose would not be held to be included in the other and in particular the residuary." 22. In the light of the aforesaid, the court finds from a reading of entry no.6 of Schedule-II (B) of the Act to be an inclusive entry. The use of word 'all' and 'including' makes it apparently clear that it is an inclusive entry. The effect of the words 'all' and the words "including fruit jams, jellies, fruit squash, paste, fruit drinks and fruit juices and achar (whether in sealed containers or otherwise)" under entry no.6 of Schedule-II(B) of the Act and the absence of any exclusion of potato chips within the said entry gives a clear legislative intent of inclusion of potato chips under entry no.6 of Schedule-II(B). To support this view of ours, the court finds that entry 10, 32, 40, 101 & 114 specifically excludes a Schedule-II (B). For facility, the said entries are quoted hereunder:- "10. Aluminum, Aluminum alloy, their products (excluding extrusions)" 32. Coir and coir products excluding coir mattress 40. Declared Goods as specified in Section 14 of the Central Sales Tax Act, 1956 except coarse gain. 101. Silk fabrics excluding handloom silk unl....
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....onsequently, the impugned order of the assessing authority, the order of the Joint Commissioner (Appeals) as well as the order of the Tribunal cannot be sustained and are quashed. The revision is allowed. The assessing authority is directed to levy tax on the revisionist with respect to the potato chips @ 4 per cent instead of @ 12.5 percent." 12.4 The CIT(A) has decided this issue in para 7.3 to 7.8 as under: 7.3 I have gone through the assessment order and submission made by appellant during the course of proceeding. The following points emerge from above: - AO has raised the contention that appellant is not deriving income for 'eligible business for the purpose of deduction u/s 80IB(11A) as it is a mere manufacturer of different kind of potato based snacks and namkeen and hence it cannot be termed to be engage in business of processing, preservation and packaging of fruits or vegetables. - Section 80IB(11A) of the Act provides deduction in respect of profits derived from undertakings engaged in the business of processing, preservation and packaging of fruits or vegetables or meat and meat products or poultry or marine or dairy products. The provisions of section 80IB(....
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....ing; (ii) preservation; and (i) packaging of vegetables. 7.4 In this regard it is respectfully submitted, that the phrase processing. preservation and packaging' as contemplated under section 80IB(11A) of the Act has a very wide connotation and include within its ambit all activities incidental to bringing the eligible product potato (a vegetable) in the instant case, to its final consumable form namely chips and/or namkeen. The words 'processing, preservation and packaging' have not been defined in the Act, nor explained in the CBDT circular. However, for the purpose of interpretation reference may be made to judicial pronouncements and dictionaries, where the meaning of the said term has been explained in common parlance. (A) Processing In various dictionaries, the expression 'Processing' is defined as under. - The term 'processing' has been defined in the Oxford English Dictionary as "the treatment of raw material, food, etc. in order to change it, preserve it, etc - Collins Dictionary defines 'processing' as 'the act or process of treating or process of treating or preparing something by a special method". - Cambridge Dictio....
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....s, the benefit intended to be given to agro- processing industries will operate in a very limited sphere, thereby defeating the very object of the provision. The extraction of juice and oil from the fruits or further converting the homogenized juice into fruit powder and adding the substances meant for preservation would legitimately fall within the sweep of the expression processing" The fact that the fruit assumes a different form or that a series of operations are involved in preparing the mixed juices and concentrates which could be preserved for long does not take it out of bounds of processing. Processing in its wider sense would still be aptly applicable 11. I am therefore of the view that the applicant is entitled to the benefit of deduction contemplated in sub-section (11A) of section 80-IB and the question has to be answered in the affirmative subject however to the clanification that the conditions laid down in sub-section (2) of section 80-IB should be satisfied, I may add that the Commissioner in his comments has very rightly taken the stand that the profit of the proposed business "seems to be eligible for deduction provided the assessee satisfies the other condit....
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....inding on the persons other than the applicant before it and the department when it is dealing with the case of that applicant, as held by the Hon'ble Supreme Court in the case of Columbia Sportswear Co. (supra) the principle and the ratio laid down by the AAR is persuasive in the cases with similar facts. In the case of the assessee before us also, the question involved was whether the extraction of oil from the FFBs of oil palm is processing or not, and the AAR has held similar activity in the case of mango pulp or powder, to be so and hence the principle and ratio of decision of the AAR in the case of Mrs. DelnaRustum Boyce (supra) is, definitely. applicable in other similar cases also and we have to hold that the activities carried on by the assessee for extraction of oil from FFB's of oil palm, will amount to processing u/s 80IB(11A) of the Act.......... 26. The last objection of the Revenue is that the end product is not a fruit but it is edible oil or kernels and shells which are not consumable goods, and hence it does not satisfy the condition of section 80IB(11A). In the case of Delna Rustum Boyce Inre, the AAR has also held that the end product need not remain i....
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.... the Assesee before us. 17. We find that the definition of the word "Manufacture" though was not available in the Assessment Years before us upto 2003- 2004, but the said definition embodies the concept of transformation of object or article into different commercial article as was discussed in several judicial pronouncements from time to time. If a different commercial article comes into existence as understood by the persons who deal with those things, a different approach need not be taken by the Courts of law to hold otherwise. The dehusked Paddy and Rice obviously are not sold on the same rate nor can they be consumed for same purpose in the same form. Therefore, the process of dehusking of Paddy into Rice with the aid of labour and machinery is definitely an industry activity undertaken by the Assessee." In view of the aforesaid, it can be said that all the activities which brings forth some change or alteration in the goods or material come under the definition of 'processing'. Such change may not only be visible but may also change in its form. Thus, whenever a commodity undergoes a change as a result of some operation performed on it, such operation would amoun....
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....on the contention of the assessee before the A.O that the crude palm oil requires the least preservation as it is a durable commodity. But this contention of the assessee alone cannot mean that the assessee is not taking any steps for preservation of the oil. It is common knowledge that all items, particularly food items, have an expiry date unless they are preserved in the required conditions. Therefore, we are satisfied that the assessee is also preserving the palm oil extracted from the fresh fruit bunches of oil palm fruits, after the process of 'pressing and extraction of oil. 26. The last objection of the Revenue is that the end product is not a fruit but it is edible oil or kemels and shells which are not consumable goods, and hence it does not satisfy the condition of section 80IB(11A). In the case of DelnaRustum Boyce Inre, the AAR has also held that the end product need not remain in the same form as the raw material. It may be in the form of juice or cut fruits or even oil or powder. As long as the end product is derived from the fruits or vegetables, the assessee is eligible for deduction u/s 80IB(11A) of the Act. In these circumstances, we are satisfied that the ....
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....d the expression Packaging as under. -Further the Hyderabad Bench of Tribunal in the case of 3F Oil Palm Agrotech (P.) Ltd vs. ACIT (supra) examined the condition of packaging in a similar case andheld as under. "25. The third condition to be satisfied is packaging. The assessee is preserving and maintaining the palm oil in large containers/tanks. As rightly pointed out by the learned Counsel for the assessee, packaging can be varied and includes the simple boxes to large container/vessel. Since the assessee is involved in large scale operation, it has to store the extracted oil in tanks. Therefore, we are satisfied that all the three processes necessary for claiming deduction u/s 80IB(11A) are satisfied by the assessee 26 The last objection of the Revenue is that the end product is not a fruit but it is edible oil or kemels and shells which are not consumable goods, and hence it does not satisfy the condition of section 80IB(11A) in the case of Delna Rustum Boyce Inre.the AAR has also held that the end product need not remain in the same form as the raw material. It may be in the form of juice or cut fruits or even oil or powder. As long as the end product is derived from th....
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....ains a vegetable and, consequently, in our opinion, potato chips is a processed vegetable." 7.7 Further, I may like to point out that the Ahmedabad Tribunal in the matter of Ms Delna Rustom Boyce (2009) 185 taxman 180 in paragraph 10 it was held as under: 10. Processing and preservation are two distinct expressions used side by side Processing may be for the limited purpose of preservation of fruits without bringing about much change in the form of the fruit. But, processing' in the context in which it occurs ought not to be confined only to the operations that would ensure the preservation of fruits as they are or in the form of slices. In other words, the expression should not be confined to minimal processing that would not change the identity of the fruit. If processing and preservation is intended to be given to agro processing industries will operate in a very limited sphere, thereby defeating the very object of the provision. The extraction of juice and oil from the substances meant for preservation would legitimately fall within the sweep of the expression 'processing The fact that the fruit assumes a different form or that a series of operations are involved in....