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The Tax Publishers Intergarden (India) (P) Ltd. v. Asstt. CIT [I.T.A No. 1292/Bang/2010, I.T.A. Nos. 287 & 968//Bang/2013, dt. 18-3-2016] : 2016 TaxPub(DT) 1689 (Bang-Trib) TP adjustment on ECB Grading, packing, fermenting, labelling of Gherkins whether manufacture/production eligible for section 10B exemption. *Facts:* Assessee had taken ECB - External commercial borrowings from AE on which it was paying an interest @ 5% which was found excessive bereft local internal CUP on loans taken by it in India being available at 6.62%. The TPO applied an interest of 3.7% to be correct thus made addition of 1.3% as TP adjustment. Assessee was in the business of buying Gherkins under contract farming, then subjected it to cleaning, washing, fermenting, packing, grading and labelling. These were not found to fit in the meaning of manufacture or production by assessing officer. Commissioner (Appeals) negated the said view. On further appeal: Held in favour of the assessee: No adjustment for TP was warranted. The activity of the assessee was production as it brought out distinct product vs raw gherkins also thereby giving marketability to the product. Thus eligible for section 10B deduction.

The Tax Publishers

Intergarden (India) (P) Ltd. v. Asstt. CIT [I.T.A No. 1292/Bang/2010, I.T.A. Nos. 287 & 968//Bang/2013, dt. 18-3-2016] : 2016 TaxPub(DT) 1689 (Bang-Trib)

TP adjustment on ECB

Grading, packing, fermenting, labelling of Gherkins whether manufacture/production eligible for section 10B exemption.

Facts:

Assessee had taken ECB - External commercial borrowings from AE on which it was paying an interest @ 5% which was found excessive bereft local internal CUP on loans taken by it in India being available at 6.62%. The TPO applied an interest of 3.7% to be correct thus made addition of 1.3% as TP adjustment.

Assessee was in the business of buying Gherkins under contract farming, then subjected it to cleaning, washing, fermenting, packing, grading and labelling. These were not found to fit in the meaning of manufacture or production by assessing officer. Commissioner (Appeals) negated the said view. On further appeal:

Held in favour of the assessee:

No adjustment for TP was warranted.

The activity of the assessee was production as it brought out distinct product vs raw gherkins also thereby giving marketability to the product. Thus eligible for section 10B deduction.