INDIAN POULTRY Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is a reference under Section 256(1) of the Income-tax Act at the instance of the assessee and the following questions of law have been referred by the Tribunal for answer by this court :

(2.) THE brief facts giving rise to this reference are that the assessee established an industrial unit in the backward area duly registered with the District Industries Centre, Rajnandgaon. For establishment of the unit, the assessee invested substantial amount in building, plant, machinery and equipment, etc. THE unit was also granted subsidy by the State Government. THE assessee's business was rearing of chicks to broilers, a saleable product, by applying scientific process and technology. THE assessee claimed deduction under Sections 80HH and 80-I of the Income-tax Act in the return filed by it. THE assessee, for the purposes of getting benefit under Sections 80HH and 80-I of the Income-tax Act, also filed an auditor's report in the prescribed form along with the return. THE Assessing Officer rejected the claim of the assessee under Sections 80HH and 80-I of the Income-tax Act. Against this, the assessee approached the appellate authority. THE Commissioner of Income-tax (Appeals) allowed the appeal of the assessee. Hence, the Revenue approached the Tribunal in appeal and the Tribunal set aside the order of the Commissioner of Income-tax (Appeals) and affirmed the order of the Assessing Officer. THE assessee, therefore, approached the Tribunal for making a reference to this court and accordingly the aforesaid questions were referred by the Tribunal for answer by this court,

(3.) IT is true that even if the chicks which develop into broilers and they are dressed and sold in the market, they still continue to be chicks only. Therefore, there is no substantial change in the matter. "Manufacture" implies a change, but every change is not manufacture and yet every change in an article is the result of treatment, labour and manipulation and does not necessarily mean that on account of certain treatment and manipulation, a new identity has come to be acquired.