COMMISSIONER OF INCOME-TAX TRIVANDRUM versus RELISH GOODS

Citation: [1999] 1 S.C.R. 992 · Decided: 11-03-1999 · Supreme Court of India · Bench: S.P. BHARUCHA · Disposal: Appeal(s) allowed

Judgment (excerpt)

\ 
!) 
I~ 
A 
COMMISSIONER OF INCOME-TAX TRIVANDRUM 
..... 
v. 
RELISH GOODS 
MARCH 11, 1999 
( 
B 
[S.P. BHARUCHA, S.S. MOHAMMED QUADRI 
AND R.C. LAHOTI, JJ.) 
~ 
Income Tax Act, 1961 : 
c 
S. 80HH-Peeling and freezing of shrimps-Held, does not involve 
production-Assessee not ellfitled to allowance. 
The respondent-assessee was engaged in the business of shrimps. 
The assessee, after buying shrimps, peeled and froze them. In the assess-
D 
ment year 1977-78, the assessee claimed the allowance under Section 80HH 
of the Income Tax Act, 1961 on the ground that it was an industrial 
undertaking engaged in manufacture/production. The Income-Tax Officer 
negatived the claim but the Commissioner of Income Tax (Appeals) and 
the Income Tax appellate Tribunal held in favour of the assessee. Ag-
grieved, Revenue filed the present appeal. 
E 
Allowing the appeal, this Court 
HELD : 1.1. There is nothing on record indicating the description of 
what the assessee does to the shrimps it buys, except the bald statement 
F 
that it peels and freezes them. The High Court was, therefore, not rigt.t in 
holding that buying and processing of shrimps by the assessee involved 
<' 
production to entitle the assessee to the allowance that it claimed. 
[994-D; 993-H] 
.___ 
Sterling Foods v. The State of Kamataka and Another, (1986} 63 S.T.C. 
G 239, relied on. 
Commissioner of Income-Tax v. Sterling Foods (Goa), (1995) 213 
I.T.R. 851, approved. 
,(_ 
r
· Commissioner of Income-Tax v. Marwell Sea Foods, (1987) 166 I.T.R. 
H 624, distinguished. 
992 
L
C.I.T. v. RELISH GOODS [S.P. BHARUCHA, J.) 
993 
.... 
1.2. As regards assessee's submission that the matter should be A 
remanded to appropriate authority to enable the assessee to lay before it 
evidence in detail of what the purchased shrimps were subjected to, it is 
too late for the assessee to do that in relation to the relevant assessment 
year, viz. 1977-78. [995-A] 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3255 of B 
1995. 
From the Judgment and Order dated 16.3.89 of the Kerala High 
Court in l.T.R. No. 310 of 1982. 
B. Krishna Prasad for the Appellant. 
E.M.S. Anam for the Respondent. 
The Judgment of the Court was delivered by 
c 
S.P. BHARUCHA, J. The only question with which we are concerned D 
in this appeal by the Revenue, relating to the Assessment Year 1977-78, 
reads thus: 
"Whether, on the facts and in the circumstances of the case :-
i) the assessee's business involves 'production' ? 
ii) the assessee is entitled to exemption under Section 80HH 
of the l.T. Act, 1961 ?" 
E 
The assessee claimed the allowance under Section 80HH of the 
Income-Tax Act, 1961, on the ground that it was an industrial undertaking F 
that manufactured/produced articles. It would appear from the judgment 
of the Tribunal that the assessee bought shrimps, peeled them and froze 
them. There is. no other material on the record which indicates what was 
done by the assessee and how it was done. The Income-Tax Officer 
negatived the ciaim. The Commissioner of Income-Tax (Appeals) and the G 
Tribunal upheld the claim. 
From the order of the Tribunal the question aforementioned was 
referred to the High Court for its opinion. The High Court held that bu)'.ing 
and processing of shrimps involved production and, therefore, the assessee 
was entitled to the allowance that it claimed. It followed its judgment in H 
994 
SUPREME COURT REPORTS 
(1999] 1 S.C.R. 
A Commissioner of Income-Tax v. Marwe 11 Sea Foods ((1987) 166 I.T.R. 
624]. 
We find from the judgment of the Kerala High Court in the case of 
Maiwell Sea Foods (supra) that Harwell Sea Foods had placed before the 
B taxing authorities a detailed description of the process by which prawns 
were prepared for export and that the appellate authorities had understood 
the various stages through which the prawns passed as processes involving 
production or manufacture. The High Court was of the view that the 
Tribunal having affirmed the finding of the A.AC., it should be extremely 
slow to doubt the correctness of the finding unless it was perverse. 
c 
As has been pointed out, there is upon the record before us no 
detailed description of what the assessee does to the shrimps it buys, other 
than the bald statement that it peels and freezes them. We cannot accept 
the statement at the Bar that the process to which the assessee puts the 
D shrimps is the process that Marwell Sea Foods used in regard to its prawns. 
Apart therefrom, there is the 

Excerpt shown. Read the full judgment & AI analysis in Lexace.