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2020 (4) TMI 96 - AT - Income TaxDeduction u/s 80IC disallowed - Prohibited product manufactured - assessee is engaged in the business of manufacturing of pesticides which is prohibited item as per the Schedule XIII of the I.T. Act - CIT (A) held that the entry no. 15 of the part B of Schedule XIII includes “insecticides, fungicides, herbicides and pesticides” and since the assessee was manufacturing the article which is mentioned in the prohibited list, he was not entitled for deduction u/s 80I - HELD THAT:- The product manufactured by the assessee as per the license of manufacturing issued by the authorities is a Fungicide namely, “Trichoderma Viride”. This product of Fungicides is also a prohibited item covered under Item no. 15 of Schedule XIII part B of the I.T. Act. Thus, the ld. CIT (A) after examination of the certificates issued by SIIDC, UEPPCB, TNAU, AC Customs & Central Excise, the product manufactured (Trichoderma Viride) and after examining whether this product is eligible or prohibited item, gave a categorical finding that the product manufactured by the assessee is a Fungicide which is a prohibited item for the claim of deduction and accordingly denied the deduction u/s 80IC. Having gone through the entire factum and the material on record, we find no good reason to interfere with the reasoned order of the ld. CIT (A). Disallowance of business expenses - AO held that the assessee has failed even to provide copies of the bills raised by this two parties - HELD THAT:- Both the agreements do not make any mention of the consideration to be paid for rendering the service mentioned in the contract. No contract can be complete without any consideration. Apparently, these two documents therefore are a facade created by the assessee to make the department believe that the payment of commission was genuine. The expenditure is allowed as deduction only if it has been incurred for the purpose of business, payment by way of account payee cheques and deduction of TDS does not prove that the expenses had been incurred for the purposes of business.- We find that the assessee has failed to substantiate the business expenditure as provided u/s 37(1) of the Act. Hence, we decline to interfere with the order of the ld. CIT (A). - Decided against assessee.
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