By C. N. Vaze, Shailesh Kamdar, Chartered Accountants
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Part A — Reported Decisions
41 (2008) 300 ITR (AT) 182 (Mumbai)
Sumaraj Seafoods Pvt. Ltd. v. ITO
A.Y. 2001-02 to 2003-04.
Dated : 26-6-2007
U/s.80-IB — Profit out of processing, selling and exporting
marine products is profit attributable to cold storage and hence entitled to
deduction u/s. 80IB.
The assessee company was engaged in the business of marine
products, storing it in the cold storage and exporting it. The AO denied the
deduction u/s.80-IB on the ground that processing of fish could not be held as
an industrial undertaking. The Appellate Authority denied the deduction on the
ground that separate computation of profit from cold storage was not provided by
the assessee.
On appeal to ITAT, it allowed the deduction u/s.80-IB and
referred to the following :
(1) The only activity conducted by the assessee is to
purchase, process, store (fish and other sea foods) in its cold storage plant
and then export the same.
(2) Thus, the operation of its cold storage plant is a very
essential and critical element in this activity of undertaking.
(3) The operation of a cold storage plant would definitely
result in certain value addition to a product and such value addition should
be considered as profits derived from operation of a cold storage plant.
(4) The profits derived from the industrial undertaking
have a close and proximate nexus with the operation of its cold storage plant.
Cases referred to :
(i) CIT v. Asian Marine Products Pvt. Ltd., (1999)
239 ITR 349 (Mad.)
(ii) CIT v. George Marjo Exports Pvt. Ltd., (2001)
250 ITR 446 (Mad.)
(iii) CIT v. Relish Foods, (1999) 237 ITR 59 (SC)
(iv) CIT v. Sterling Foods, (1999) 237 579 (SC)
(v) National Thermal Power Corporation Ltd. v. Addl.
CIT, (2004) 91 ITD 101 (Delhi)
(vi) Pandian Chemicals Ltd. v. CIT, (2003) 262 ITR
278 (SC)
