I.S. NIGAM, A.M.: This is appeal filed by assessee against order of CIT, Bombay City VI Bombay, under s. 263 of IT Act, 1961. assessee is registered firm and appeal relates to asst. yr. 1978-79. We were given to understand at time of hearing of appeal that business of assessee-firm was to purpose milk from various sources, which was brought to Bombay in refrigerated tankers and was subjected to chilling and pasteurization before being bottled and sold under brand name 'Doodh Amrut . It was claimed before ITO in course of assessment proceedings that this activity amounted to production or manufacture of article or thing and consequently assessee was entitled to investment allowance on machinery and plant used in business. ITO while making assessment by order by 25th March, 1981, allowed this claim of investment allowance. Subsequently, however, CIT was of view that order of ITO was erroneous and prejudicial to interests of revenue. He was not satisfied with assessee s submission that since assessment order was subject matter of appeal before CIT(A) CIT had no jurisdiction under s. 263 and, alternatively, assessee s activities amounted to manufacture or production of article or thing and, therefore, assessment order allowing investment allowance on machinery and plant used in this business cannot be said to be erroneous or prejudicial to interest of revenue. CIT, therefore, by order under s. 263 dt. 7th Feb., 1983 set aside assessment with direction to ITO to make fresh assessment after giving assessee opportunity of being heard, to withdraw investment allowance and to take all ancillary action which may be required at time of making fresh assessment. assessee is aggrieved and has, therefore, come up in present appeal before us. assessee s ld. counsel, Shri Haribhakti, submitted to us that at time of making assessment, i.e., 25h March, 1981, there were two decisions, one of Hon ble High Court of Kerala in case of CIT vs. Castlrock Fisheries (1980) 18 CTR (Ker) 200: (1980) 126 ITR 382 (Ker) and another of Hon ble High Court of Calcutta in case of CIT vs. Radha Nagar Cold Storage (P) Ltd. (1980) 18 CTR (Cal) 166: (1980) 126 ITR 66 (Cal) wherein their Lordships laid down that even if plant was temporarily let out to sister- concern, income derived by such letting out was business income and assessee was entitled to development rebate while working out business income and business of keeping potatoes in could storage was activity, which falls within meaning of processing of goods. He, therefore, submitted that, as laid down by Hon ble High Court of Calcutta in case of Russell Properties (P) Ltd. vs. Addl. CIT (1977) 109 ITR 229 (Cal), assessment cannot be said to be erroneous simply because ITO had followed decisions of Hon ble High Courts, which he was bound to follow. It was also point out by him that since at time of proceedings under s. 263, appeal against assessment order was pending before CIT(A), it was open to ITO to request for enhancement and CIT had no jurisdiction under s. 263. In this connection, he pointed out that reasoning in decision of Special Bench of Tribunal in case of Dwarkadas & Co. (P) Ltd. vs. ITO (1983) 15 TTJ (Bom) 61: (1982) 1 SOT 495 (Bom) was applicable here. Summng up, Shri Haribhakti vehemently argued before us that exercise of jurisdiction under s. 263 by CIT was ab initio void. Shri Haribhakti referred to number of decisions of Tribunal in case of ITO vs. Elite Sea Foods (1983) 3 ITD 348 (Coch) where Tribunal held that investment allowance was admissible in business of purchase of shrimps, etc., which after de-heading, peeling, de-veining and freezing, were exported Universal Spices vs. ITO (1983) 4 ITD 367 (Hyd) where Tribunal held that business of accommodating tumeric dolls in factory shed and carrying on process of polishing as result of which final product underwent substantial vibration and wear and tear amounted to support of manufacturing process, ITO vs. Dr. P.V. Bhat (1983) 6 ITD 560 (Rang) (SB) where Tribunal held that X-ray photographs produced from X-ray unit could be said to be production of article or thing and Nishit Synthetics (P) Ltd. vs. ITO (1984) 7 ITD 486 (Ahd) where Tribunal held that conversion of flat yarn into twisted yarn would amount to manufacture of new article within meaning of s. 32A, in support of contention that assessee s business activity of converting milk purchased from various sources into branch product 'Doodh Amrut amounted to manufacture or production of article or thing. On this basis, Shri Haribhakti submitted that assessee-firm was entitled to investment allowance on new machinery and plant used in this business and investment allowance was rightly allowed by ITO. Summing up, Shri Haribhakti vehemently contended before us that in first place CIT had no jurisdiction under s. 263 and alternatively assessment order was not erroneous and, therefore, order of CIT under s. 263 should be cancelled. On other hand, ld. Departmental Representative, Shri Vohra submitted to us that on date of order of CIT under s. 253, i.e., 7th Feb., 1983, appeal against assessment order before CIT(A) was still pending and, therefore, there was no question of merger of assessment order in order of CIT(A) at time CIT exercised his powers under s. 263. He, therefore, submitted that Special Bench decision of Tribunal in case of Dwarkadas & Co. Pvt. Ltd. vs. ITO (supra) will not be applicable here. Reference in this connection was also made by him to decision of Hon ble High Court of Bombay in case of CIT vs. Sekseria Cotton Mills Ltd. (1980) 124 ITR 570 (Bom) where their Lordships of Hon ble High Court of Bombay laid down that principle of merger of order of subordinate authority only applies to that part of order, which was subject matter of consideration and decision by appellate authority and entire order does not merge in order of appellate authority. Viewed in this context, according to Shri Vohra, when even appeal had not been decided by CIT(A), there was no question of any merger of assessment order in order of appellate authority, i.e., CIT(A) on date of exercise of powers under s. 263 by CIT Referring to ruling of Hon ble High Court of Kerala in case of CIT vs. Castlerock Fisheries (supra), Shri Vohra pointed out that issue in this case was whether development rebate could be denied because plant instead of being used by assessee for its own business was let out to sister-concern and, therefore, there is no decision by Hon ble High Court of Kerala on whether business amounted to manufacture or production of article or thing. We were then taken through ruling of Hon ble High Court of Calcutta High Court in case of CIT vs. Radha Nagar Cold Storage (P) Ltd. (supra) where their Lordships laid down that potatoes kept in cold storage for preservation in original state and prevention of normal decay amounts to processing of goods, which is not same thing as manufacture of goods. Both these decisions therefore, according t o him. Vohra, were not on issue of whether assessee s business of purchase of milk from various sources, which was transported to Bombay and sold after chilling and pasteurization under brand name of 'Doodh Amrut amounted to manufacture or production of article or thing. On this basis, Shri Vohra submitted that there was no question of ITO following decisions of Hon ble High Courts of Kerala and Calcutta in these two cases while allowing assessee s claim of investment allowance on machinery and plant used in business. We were taken through assessment order in order to point out that there was no discussion by ITO on this issue and assessee s claim of investment allowance was allowed without any inquiry or scrutiny. He, therefore, vehemently argued before us that there was no merit on claim made by assessee s ld. counsel, Shri Haribhakti, that CIT had no jurisdiction under s. 263 on date on which he passed order, i.e., 7th Feb., 1983. Shri Vohra then referred to ruling of Hon ble High Court of Kerala in case of CIT vs. Casino (P) Ltd. (1973) 91 ITR 289 (Ker) wherein their Lordships laid down that to consider whether activity amounts to processing or manufacturing of goods, matter has to be viewed in popular sense, i.e., what person will understand in ordinary sense in which English language is understood and viewed in this context, process of preparation of various items of food from various raw materials cannot be said to constitute even processing, what to say manufacture of goods. Two decisions of Tribunal were also cited before us, firs being Cateja Cold Storage vs. ITO (1982)1 ITD 751 (All) where Tribunal held that plant and machinery used in cold storage cannot be said to be engaged in manufacture or production of article or thing and, therefore, assessee is not entitled to investment allowance on new items of plant and machinery in cold storage and second being Budhwar Cold Storage vs. ITO (1984) 10 ITD 357 ((Del) where also Tribunal held that investment allowance was not admissible on machinery and plant installed in cold storage since this did not involve manufacture on production of article or thing. Referring to this decisions Tribunal cited by assessee s learned counsel. Shri Haribhakti, Shri Vohra submitted that these cases were on different facts and were distinguishable on facts and circumstances of present case. Summing up, Shri Vohra argued before us that assessment order accepting assessee s claim of investment allowance on machinery and plant used in business of supply of milk was erroneous and prejudicial to interests of revenue. He, therefore, justified order of CIT under s. 263 and submitted to us that order of CIT should be upheld. We have carefully considered rival submissions. At outset it will be necessary to point out that assessee s business was to purchase milk from various sources, which was brought to Bombay in refrigerated tankers and after chilling, pasteurization and bottling, was sold under brand name. 'Doodh Amrut . fact, however, remains that what was sold by assessee as end product was also milk as commonly understood by any person. various rulings cited by assessee s Learned Counsel, Shri Haribhakti are, therefore, on different facts and cannot be applicable to issue under consideration here. Hon ble Supreme Court in case of Union of India vs. Delhi Cloth & General Mills Co. Ltd. AIR 1963 SC 791, has laid down that processing cannot be equated with manufacture and word 'manufacture means to bring into existence new substance and not merely produce some change in substance, however, minor in consequence change may be. production of article also presupposes that end product should be different from raw materials. Viewed in this context, as laid down by Hon ble High Court of Kerala, in case of CIT vs. Casino (P) Ltd. (supra) applying test of ordinary sense in which language is understood, end product in present case, whatever be brand name, was only milk. Thus while activity of assessee of bringing milk purchased from various centres to Bombay by refrigerated tankers and chilling, pasteurization and bottling of milk may satisfy test of processing of gods, it does not satisfy test of manufacture or production of article or thing. assessee was, therefore, not entitled to claim of investment allowance on new item of plant and machinery used in this business and assessment order allowing this claim was erroneous and prejudicial to interests of revenue. We will now deal with issue raised that since assessment order had merged in order of appellate authority, CIT had no jurisdiction under s. 263. Here it will be necessary to point out that appeal against assessment order was decided by CIT(A) on 31st May, 1983 and thus on date on which CIT passed his order under s. 263, i.e., 7th Feb., 1983, there was no order of CIT(A). Thus it cannot be said that when CIT passed his order under s. 263, assessment order had already merged in order of CIT(A). It is true that ITO could have requested CIT(A) for enhancement of assessment since appeal was pending at time CIT exercised his jurisdiction under s. 263 but then if two remedies are open either to assessee or to Department, it is open to either side to resort to any of two remedies and singly because one remedy was resorted to and not other, will not render remedy resorted to illegal on that ground alone. Considering all these and looking to totality of facts and circumstances, we have no hesitation in coming to conclusion that order of CIT under s. 263 was justified. order of CIT under s. 263 is, therefore, upheld. appeal fails and is hereby dismissed. *** SANJOY DAIRY FARM v. INCOME TAX OFFICER