Production of Paratha, Samosa, Dhokla etc is manufacture U/s. 10B

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IN THE ITAT AHMEDABAD BENCH ‘A’

Deepkiran Foods (P.) Ltd.

v.

Assistant Commissioner of Income-tax

IT Appeal No. 1451(Ahd.) of 2012

[Assessment year 2008-09]

December 14, 2012

 

In the present case, we find that the assessee uses various materials like flour, ghee, oil etc. for the production of various items. The production is done by following a particular set process. The various raw materials when consumed lose their individual and independent identity and a different and new product comes into existence. The new product manufactured has a different name and characteristics and is commercially distinct. Even for the purpose of Excise duty, final product is considered as a different product than the individual items of raw materials. The produced goods was not sold to the customer as floor, ghee etc but with the change in the form and it attained a different identity and was recognised as a new and distinct article and was sold as a different and distinct commodity. Accordingly, the manufacturing of chappati, parath, samosa, dhokla constitutes manufacturing activity.

Hon’ble J.K. High Court in the case of Pankaj Jain (supra) after distinguishing the Hon’ble Apex Court in the case of Indian Hotels (supra) has held the manufacture of bread to be a manufacturing activity.

Thus, in view of the totality of facts of the case, we hold that the issue before us is covered with the decision of Hon’ble J.K. High Court in the case of Pankaj Jain Prop Aagan Food Industries (supra) in favour of the assessee and we are of the view that the assessee is an industrial undertaking and the activity of production of the foodstuff is a manufacturing activity (except for the items outsourced from other parties).