TMI Blog2021 (6) TMI 419X X X X Extracts X X X X X X X X Extracts X X X X ..... . Appeal of the assessee is partly allowed - ITA No. 1578/H/2019 - - - Dated:- 10-6-2021 - Shri Satbeer Singh Godara, Judicial Member And Shri Laxmi Prasad Sahu, Accountant Member For the Assessee : Shri Kiran for Shri S. Rama Rao For the Revenue : Shri Rohit Mujumdar ORDER PER L.P. SAHU, AM: This appeal filed by the assessee for AY 2016-17 is directed against the CIT(A) - 2, Hyderabad s order, dated 26/08/2019 involving proceedings u/s 143(3) of the Income Tax Act, 1961 ; in short the Act on the following grounds of appeal: 1. The order of the learned Commissioner of Income Tax (Appeals) is erroneous both on facts and in law. 2) The learned Commissioner of Income-tax (Appeals) erred in confirming the action of the Assessing Officer in not allowing the claim of deduction u/ s 80lB (11A) of the l.T. Act inspite of explaining in detail that the appellant is processing sweet corn which is vegetable. 3) The learned Commissioner of Income Tax (Appeals) ought to have allowed the claim of deduction u/s 80lB (11A) of ₹ 82,72,150/- as it satisfied all the requirements of Scc.80lB(11A) of the I.T. Act. 4) The learne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was claimed stating that the company is engaged in the business of processing, preservation and packaging of vegetables. The audit report in Form No. 10CCB signed by C.A. was also filed. In this connection, vide this office letter dated 13-12-16, a letter was addressed the assessee s auditor, which is reproduced, by AO in his order at para No. 4, which is extracted as under: During the assessment proceedings In the above mentioned case for the A. Y.2014-15, it is noticed that the company made a fresh claim of deduction uls 80IB. The Audit report in Form No. 10CCB was prepared and uploaded by you on 30-03-2016 which was revised on 18-08-2016. In this connection, your attention Is drawn to the fact that a survey uls.133A was conducted In this case on 30-12-2015 and during the survey proceedings, it was noticed that the assessee did not maintain any books of account for the A. Yrs.2013-14 to 2015-16 and for the period 01-04-2015 to 30-12-2015, in support of purchases and sales made in respect of sweet corn which constituted 90% of assessee's business turnover. Further, no bills/vouchers were maintained in support of expenditure claimed under Various heads in the P L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocumentary evidences cannot hold any water and the flnanclal statements prepared based on such accounts are baseless and untenable. under these circumstances, the books of account in the instant case were rejected and profits were estimated. 4.4. Therefore, the audit certificate issued by the Chartered Accountant simply basing on the figures maintained in tally package without any supporting documentary evidences, is nothing but a piece of paper which do not have any weight in the eyes of law. Accordingly, the assessee's fresh claim in the form of revised return claiming deduction uls 80IB is not maintainable and deserves to be rejected summarily. 14.3 On appeal, the CIT(A) confirmed the action of the AO. 14.4 Before us, the ld. AR of the assessee filed written submissions in this regard, which are as under: 2. The appellant submits that the company was incorporated on 30.3.2007. Till May 2009 it carried on the activity mostly manually without using much of the machines. 3. During the financial year 2009-10, the company ordered for supply of processing unit on a turn key basis from Raghu Marketing Agencies. Accordingly, Raghu Marketing Agenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d vide invoice dated 5.6.2009 and provided alongwith Cold room equipment of the capacity of 15TR in three units(page N03 of annexures). (9) At the time of transport, the processed com is required to be carried in air conditioned carriers and the assessee owns two Air-conditioned carriers during the financial year 2012-13. Later during the FY 2013-14, 2014-15 2015-16, more vehicles were purchased (pages No.54 to 75 of annexures. The availability of above equipment clearly indicate that the appellant has all the necessary equipment for procurement, processing, packing and preservation of sweet corn. '5. During the previous year relevant for the assessment year 2013-14 the appellant incurred expenditure ₹ 57,16,485/- ( page No.38 of the paper book as per details of other expenses under Note- U ) towards storage freezer charges. The charges were paid at out stations where the sweet corn is preserved and sold, Similarly for the period ended 31.3.2014 and 31.3.2015, the following amounts were paid towards storage and freezer charges. a) Asst. year 2014-15 _ ₹ 57,81,232/- ( page No.85 of the paper book as per details of other expenses under No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh corn is considered a starchy vegetable. Its nutrient content differs from dry corn, and it is eaten in different ways -- often on the cob, as a side dish, or mixed with other vegetables. A grain is defined as the harvested dry seeds or fruit of a cereal grass, or the term can refer to the cereal grasses collectively. Field corn that is harvested when the seeds are dry would thus be considered a grain. Sweet corn when harvested before maturity is usually considered a vegetable. Wikipedia Sweet corn (Zea mays convar. saccharata var. rUfiosa;l'J also called sugar corn and pole corn) is a variety of maize with a high sugar content. Sweet com is the result of a naturally occurring recessive mutation in the genes which control conversion of sugar to starch inside the ENO of the com kernel. Unlike field com varieties, which are harvested when the kernels are dry and mature (dent stage), sweet corn is picked when immature (milk stage) and prepared and eaten as a vegetable, rather than a grain. Since the process of maturation involves converting sugar to starch, sweet corn stores poorly and must be eaten Fresh, canned, or frozen, before the kernels become ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he CIT(A) is justified in enhancing the income of the assessee, which may be upheld. 14.7 We have considered the rival submissions and perused the material on record as well as gone through the orders of revenue authorities. The provisions of section 80IB(11A) read as under: 80IB(11A) The amount of deduction in a case of an undertaking deriving profit from the business of processing, preservation and packaging of fruits or vegetables or meat and meat products or poultry or marine or dairy products or from the integrated business of handling, storage and transportation of food grains, shall be hundred per cent of the profits and gains derived from such undertaking for five assessment years beginning with the initial assessment year and thereafter, twenty-five per cent (or thirty per cent where the assessee is a company) of the profits and gains derived from the operation of such business in a manner that the total period of deduction does not exceed ten consecutive assessment years and subject to fulfilment of the condition that it begins to operate such business on or after the 1st day of April, 2001 Provided that the provisions of this section shall not apply to an underta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he AO @ 10% on the revenue from operations as per Note No. O of the financial statements. Hence, we set aside the order of the CIT(A) in this regard and direct the AO to allow the assessee s claim of deduction u/s 80IB(11A). In the result, the ground raised by the assessee on this issue is allowed. 7.1 As the issue under consideration is materially identical to that of assessee s case cited supra, following the decision therein, we hold that the assessee is eligible for deduction on the profit derived from processing, preservatives and packing of fruits and vegetables as contemplated in section 80(B(11A) of the IT Act. However, on perusal of computation of income placed in paper book at page No. 2, the entire net profit has been taken, whereas, on examination of financial statements, the assessee has shown gross receipts in Trading and Profit Loss Account, as under: Notes forming part of Financial Statements as at 31/03/2016 Note Particulars For the year ended 31st, March, 2016 For the year ended 31st March, 2015 22 Note: Revenue from operations: ..... X X X X Extracts X X X X X X X X Extracts X X X X
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