ORDER SHEET ITA 442 of 2004 IN HIGH COURT AT CALCUTTA Civil Appellate Jurisdiction ORIGINAL SIDE STEWART HOLL (INDIA) LTD. Versus COMMISSIONER OF I.TAX, KOLKATA II BEFORE: Hon'ble JUSTICE GIRISH CHANDRA GUPTA Hon'ble JUSTICE ARINDAM SINHA Date : 23rd March, 2015. Appearance : Mr.J.P.Khaitan,Sr.Advocate ..for appellant. Mr.S.Mookherjee,Advocate for respondent. Court : appeal arises out of judgement and order dated 20th February, 2004 relating to assessment year 1998-99. questions formulated at time of admission of appeal are as follows : i) Whether Tribunal was justified in law in holding that deduction under Section 33AB of Income Tax Act, 1961 as claimed by appellant and accepted by Assessing Officer and Assessment Order dated March 27, 2001 for assessment year 1998-99 was not in accordance with provisions of said section and said 2 order of assessment was erroneous and prejudicial to interest of Revenue and thereby upholding order passed by Commissioner of Income Tax under Section 263 ? ii) Whether and in any event and on true and proper interpretation of section 33AB of Act, Tribunal was justified in law in holding that income from tea purchased by appellant and blended with tea, manufactured by it did not form part of profit of business of growing and manufacturing tea for purpose of section 33AB ? iii) Whether and in any event Tribunal was justified in law in upholding computation of profit from activity of purchase of tea for blending with tea manufactured by appellant for purpose of export as made by Commissioner of Income Tax without considering and/or dealing with appellant s contentions in that behalf and as highlighted in appellant s letter dated March 12, 2003 filed before Commissioner of Income Tax ? iv) Whether in respect of one and same activity income can be subjected to two different provisions and treated as loss under one and profit under other ?" Mr.Khaitan, learned Senior Advocate appearing for appellant/assessee submitted that question nos. (i) and (ii) are already covered by judgement of this Court in case of Goodricke Group Ltd. v. Commissioner of Income-tax (No.1) reported in (2011) 338 ITR 97 wherein following views were expressed : 3 In case before us, assessee has utilized his entire tea grown by it in its garden and by blending same with some other amount of tea purchased from outside has manufactured final product and, thus, entire profit arising out of such manufacture will get benefit of section 33AB notwithstanding fact that for purpose of blending, some small amount was purchased from outside. It appears that purchased amount is very trifling in comparison to amount grown by assessee and thus, it is not case where it can be alleged that purpose of maintenance of garden by growing insignificant amount of tea in comparison to final product is only device to get benefit of section. In our opinion, purposive interpretation of aforesaid provision should be made instead of literal construction of same otherwise, legislative purpose will be frustrated and in rare cases, where very few fortunate assessees who grow and manufacture different varieties of tea and consequently, do not require purchase of any tea for blending with final product, can only get benefit of section 33AB of Act. Mr.Mookherjee, learned advocate appearing for revenue/respondent submitted that in case of Goodricke Group Ltd. relied upon by Mr.Khaitan, Division Bench was of opinion that purchase from outside was trifling in comparison to quantity grown by assessee. In case before us, Mr.Khaitan submitted that quantity purchased from outside is 11%. By using expression trifling what did Division Bench mean is not very clear to us 4 but 11% is also in sense nominal compared to balance 89% which was admittedly grown and manufactured by assessee himself. added difficulty is that in event we dissent from judgement for which no proper reason had been advanced before us matter has to be referred to larger Bench. That exercise, being necessary, may be resorted to in appropriate case. question nos. (i) and (ii) are answered in negative in favour of assessee and question nos. (iii) and (iv) need not be answered. appeal is, thus, allowed. (GIRISH CHANDRA GUPTA, J.) (ARINDAM SINHA, J.) ssaha AR(CR) Stewart Holl (India) Ltd. v. Commissioner of I.Tax, Kolkata - II