Law: Income Tax Act, 1961

Section: 10,10(27),32A80HH,80HHA,801,80J

[Indian Income Tax Act 1961]......Sections 10(27), 32A 80HH, 80HHA, 801 and 80J Development allowance - Grant of Hatching of eggs in poultry farm - Claim of development allowance and deduction disallowed Challenge to Production of chicks by application of mechanical methods Nature of business Whether assessee engaged in production of articles and things and could be deemed industrial under taking - Question of law - Determination of - Whether business of hatchery comes within meaning of expression manufacture or produce articles and things - Held no. Section 14D of the Income-tax Act deals with one part of the total income, namely, profits and gains of business. Section 29 of the lncome-tax Act, deals with deductions from the profits and gains. Section 32A is one of the sections dealing with such deduction. Therefore, the income from poultry farming being outside the scope of, total income by virtue of the omitted section 10(27) of the Act, there was no question of application of sections 32A and 80J to it at least when we find that section 80JJ was consciously simultaneously re-enacted on the omission of section 10(27) of the Act specially for those who were engaged in the business of poultry farming. Lf omitted section 10(27) and sections 32A, BOJ and 80JJ are read together along with the legislative history, it is evident that the provision giving benefit to those who were engaged in running poultry farms was separate and distinct from the provisions which provided incentive to industrial undertakings engaged in the business of manufacturing or producing articles. Thus, if the expression industrial undertaking for the purpose of business of manufacture or production of an article or thing is read in the context of the provisions of the Act and with regard to the legislative history of the provisions of the Act, it is abundantly clear that those who are engaged in the business of hatcheries are neither industrial undertakings nor engaged in the business of producing articles or things. From a perusal of the self-stated steps taken by the assessee for the alleged production of chicks it is clear that the assessee does not contribute to the formation of chicks.…

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