STANDARD TEA PROCESSING CO.LTD vs. DY. C.I.T.

Facts

The assessee, Standard Tea Processing Co. Ltd., filed appeals before the Gujarat High Court challenging orders of the Income Tax Appellate Tribunal (ITAT) for assessment years 1988-89, 1989-90, 1990-91, and 1991-92. The ITAT's orders were dated December 29, 2000. The appeals before the High Court were admitted on June 20, 2001. The procedural history involved the assessee filing returns, a notice under Section 139(9) for a defect, rectification under Section 154, and appeals to the CIT(A) which were partly allowed. Subsequently, appeals to the ITAT resulted in some being partly allowed and one being dismissed. The amount in dispute is not explicitly stated.

Held

The High Court held that the question of law framed is answered in favour of the Revenue and against the assessee. The reasoning provided is that the issue is governed by the decision of the Apex Court in Commissioner of Income-tax vs. Tara Agencies, reported in 292 ITR 444, a precedent that was not disputed by the assessee's counsel. Consequently, the appeals were dismissed without elaborate reasoning. The operative direction is the dismissal of the Tax Appeals. No issues were expressly left undecided.

Key Issues

1. Whether the process of blending tea can be said to produce an article or thing within the meaning of Section 80I of the Income-tax Act, 1961, so as to bring into existence an article or thing which is a different commercial commodity? (Question of law) Assessee's contention: Not recorded in the judgment. Revenue's contention: The issue is governed by the decision of the Apex Court in Commissioner of Income-tax vs. Tara Agencies, reported in 292 ITR 444. This was not disputed by the assessee's counsel.