Income Tax Act, 1961

--Deduction under section 80-IB--Manufacture or production Manufacturing and selling of masala powder--Assessee submitted that he was engaged in the business of manufacturing and sale of curry powder eligible for deduction under section 80-IB from the profit derived from manufacturing unit. According to Departmental representative, assessee was buying different spice powders from different sister concerns, mixing them in its unit and then selling them as masala powders. Referring to provisions of section 80-IB(2)(iii), Departmental representative submitted that for claiming deduction, assessee should manufacture or produce any article or thing, and since the taxpayer was merely mixing the powders, it could not be considered to be a manufacturing activity. Held: Was not justified as the issue was examined by the Mumbai Bench of Tribunal in Empire Spices and Foods Mumbai Ltd., and the Mumbai Bench of Tribunal found that producing different varieties of Masala using different spices as inputs would amount to manufacturing and such a process was eligible for deduction under section 80-IB. The Commissioner (Appeals), after considering the decision of the Tribunal in Dy. CIT v. Sri Sai Roller Flour Mills (P) Ltd. 2010 TaxPub(DT) 327 (Hyd-Trib): (2010) 2 ITR (Trib) 490 (Hyd) and the judgment of the Apex Court in Aspinwall & Co. v. CIT 2001 TaxPub(DT) 1611 (SC) : (2001) 251 ITR 323 (SC) held that manufacturing different masala powders amounted to manufacturing activity. Thus, Tribunal did not find any infirmity in the order of the lower authority.