Case Law Details
CIT Vs M/s. Cavinkare Private Limited (Madras High Court)
Conclusion: Deduction u/s 80IA eligible when herbal product is manufactured from herbs, manually and with the use of some chemicals and small machinery.
Facts: Assessee is engaged in converting herbs into herbal powder which involves processing of drying of herbs, fumigation, grinding & sieving, blending, quality control and packing. Benefit u/s 80IA was denied to the assessee alleging that they were not engaged in any activity of manufacture or production. Further it was also alleged that the electricity consumption was also lower.
Held : The manufacture of herbal product by a manual process with the use of some chemicals and small machinery can also amount to manufacture or production of a different commercial article which is the basic requirement under Section 80IA of the Act. The purpose of the said provision is to encourage industrialization and investment in an industry. The purchase of plant and machinery, and consumption of electricity are not mandatory requirement.
FULL TEXT OF THE HIGH COURT ORDER / JUDGEMENT
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