LexCOMMISSIONER OF INCOME TAX, BANGALORE versus VENKATESWARA HATCHERIES (P) LTD. ETC. ETC.
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COMMISSIONER OF INCOME TAX, BANGALORE
A
v.
VENKATESWARA HATCHERIES (P) LTD. ETC. ETC.
MARCH 24, 1999
(S.P. BHARUCHA, V.N. KHARE AND A.P. MISRA, JJ.]
B
Income Tax Act 1961, Ss. 32 A and 80 J-Whether the business of
hatchery comes within the meaning of the expression ''manufacture or
produce articles or things '' in Ss. 32 A (2) and 80 J and consequently are
the assessees entitled to investment allowance and deductions-Held, no C
Interpretation of Statutes-Whether words articles or things should receive
same interpretation as when occurring in Fifth Schedule of Act-Held, no;
'Same words, if read in context of one provision may convey one meaning
and another in a different context.
The assessees run hatcheries where eggs are hatched on large scale
by adopting latest scientific methods. In connection with their income tax
assessments, they claimed that they were industrial undertakings engaged
in the business of producing articles or things and therefore entitled to
investment allowance under S. 32A and deductions under Ss. 80 HH, 80
HHA, 80 I and 80 J of the Income Tax Act, 1961 ('Act').
The Bombay High Court following the decision in Commissioner of
Income Tax v. Deejay Hatcheries, 211 ITR 652 negatived their contention.
However, the High Courts of Andhra Pradesh and Karnataka, following the
decision in Commissioner of Income-tax v. Sri Venkateswara Hatcheries (P)
ltd., 174 ITR 231, upheld it. The Revenue then appealed to this Court.
The Revenue contended that even if chicks were to be construed to be
articles or things, they were produced as a natural process of development
of eggs and the assessees could not be said to be producing them. It was
further contended that the assessees were not industrial undertakings.
Allowing the appeals, this Court
HELD : 1.1. The assessees were neither industrial undertakings nor
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did the business of hatchery carried on by them fell within the meaning of
'manufacture or produce articles or things' in Ss. 32A and 80 JJ of the Act.
The assessees were not entitled to investment allowance under s. 32A and H
177
178
SUPREME COURT REPORTS
[1999] 2 S.C.R.
A deductions under Ss. 80 HH, 80 HHA, 80 I and 80 J of the Act.
(186-G; 188-G]
· ·1.2. What the assessee was doing was to help the natural or biological
process of giving birth to chicks. The chicks which otherwise could also be
produced by conventional or natural ~ethod and in that process also, same
B time was taken when the chicks came out from the eggs. What the assessee
by application of mechanical process did in the hatchery was to preserve and
protect the eggs at a particular temperature. But the coming out of chicks
from the eggs was an event of nature. The only difference seems to be that,
the application of mechanical methods, the mortality rate of chicks was less
C and the assessee might get chicks more in number. This, however, would not
mean that the assessee produced chicks and that chicks were 'articles or
things'. (186-E-F)
Commissioner of Income Tax v. Deejay Hatcheries, 211 ITR 652,
approved.
D
Commissioner of Income-tax v. Sri Venkateswara Hatcheries (P) Ltd.,
174 ITR 231, overruled.
The Incubation Book by Dr. A.F. Anderson Brown, Poulrty Hatcheries
Business by Dr. A.L. Bhagawat, Poulrty Science and Production by Robert
E. Moreng and Poulrty keeping in India by P.M.N. Naidu, referred to.
E
[186-A]
2.1. The meaning assigned to word's 'articles or things' in the Fifth
Schedule could not be assigned to the words 'articles or things' used in Ss.
32A and 80J of the Act. The same word, if read in the context of one
provision of the Act, might mean or convey one meaning and another in a
F different context. The Legislature in its wisdom had chosen to place processed
seeds and fish under the heading articles or things in the Fifth Schedule
since it was competent to give artificial meaning to any word. [188-C]
G
Shamrao Vishnu Parulekar v. The District Magistrate, Thana, [1956]
SCR 644, referred to.
2.2. If the expression in.dustrial undertaking for purpose of business
of manufacture or production of an article or thing was read in the context
of the provisions of the Act and with regard to legislative history of the
provisions of the act, it was clear that those who were engaged in the
business of hatcheries were neither industrial undertakings nor engaged in
H the business of producing aricles or things. [188-G]
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