TaxTMI 
TaxTMI 
2021 (6) TMI 419
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....owed the claim of deduction u/s 80lB (11A) of Rs. 82,72,150/- as it satisfied all the requirements of Scc.80lB(11A) of the I.T. Act. 4) The learned Commissioner of Income Tax (Appeals) ought to have seen that the Assessing Officer relied on the order of the appellate commissioner instead of considering the claim u/ s 80lB (11 A) on merits. 5) Any other ground or grounds that may be urged at the time of hearing." 2. Brief facts of the case are that the assessee, engaged in the business of purchase and sale of sweet corn besides preparation and sale of frozen food items like sweet corn samosa, spring rolls etc., filed its return of income for AY 2016-17 on 17/10/2016 declaring total income of Rs. 82,90,150/- and by claiming deduction of Rs. 82,72,150/- u/s 80IB(11A), the income declared by the appellant was at Nil. Further, the assessee company declared deemed total income u/s.115JB at Rs. 1,67,07,493. In this case a survey ii] s.133A was conducted on 30-12-2015. at Registered office at D.No.7-2-4/D, Old Canteen Building, IDA, Sanath Nagar, The case was selected for scrutiny and the A.O. completed assessment u/s 143(3) of the IT Act on 21.12.2018 by making additi....
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.... business turnover. Further, no bills/vouchers were maintained in support of expenditure claimed under Various heads in the P&L account for the said period. In the post survey proceedings, the director of the company Sri A.Sri Nagaveer, in his statement also confirmed the fact that no books of account were maintained. In this back ground, you are requested to explain as to how the audit report in form No.10CCB for claiming deduction u/s 80IB was issued especially when no books of account were maintained by the assessee. Your explanation should reach this within a week from the date of receipt of this letter". 4.1. In response to the tetter issued, the Chartered Accountant submitted a letter dated 16-12-16 wherein certain information was given on nature of business activity of the company and the deduction claimed u/s.80IB(11A). The relevant excerpts regarding deduction u/s.80IB are reproduced as under: "M/s. Tanvi Foods (India) pvt. Ltd has produced accounts in tally Including Trail Balance, Balance Sheet, P&L, sales and other ledgers. It has also produced Income tax returns filed, audit reports, note on business activity & business process and other rele....
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....l year 2009-10, the company ordered for supply of processing unit on a turn key basis from Raghu Marketing Agencies. Accordingly, Raghu Marketing Agencies supplied the following machinery used in the various stages of procuring, processing and packing of Sweet Corn. A copy of the invoice raised by the said concern for supply of machinery is submitted for perusal. The invoice itself is known as "Turn Key supply of Corn processing Unit". The invoice raised for Rs. 1,10,31,954j- include the following machinery. (1) The first stage of the activity is purchase of fresh corn directly from the farmers and local markets. The assessee needs weighing machines and purchased eight weighing machines for weighment of corn cob purchased. (2) The second stage is removal of husk and corn silk and peeling of cobs to corn kernels. For this purpose the assessee purchased three working tables of 2500 kg/hour (page No.2 of annexures)and were used for removal of husk. (3) The next stage is cleaning of raw kernels. For this purpose the assessee purchased three numbers of Air bubbled cleaning machines of the capacity of 2500 kg/hour (page No.2 of annexu....
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....wing amounts were paid towards storage and freezer charges. a) Asst. year 2014-15 _ Rs. 57,81,232/- ( page No.85 of the paper book as per details of other expenses under Note-"V") b) Asst. year 2015-16 ( page No.128 of the paper book as per details of other expenses under Note-"W") 6. It can be seen from the above that the appellant possessed the required machinery for procurement, processing, cleaning, boiling and packing the material at the place of production. It has its own deep freezers and blast rooms at the place of production. At the places of sale ( i.e., at various outstations) it hired freezing chambers and paid rent as mentioned above. The above facts would indicate that the appellant is in the activity of purchase, processing, preservation and packing of sweet corn which is a vegetable product. Therefore, it is entitled for deduction u/s 80IB(11A) of the LT. Act." 14.5 During the course of hearing, the ld. AR of the assessee strongly submitted that the business of the assessee is eligible for deduction u/s 80IB(11A) of the Act because assessee is engaged in the business of corn processing & packaging. In this regard, the assessee has....
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....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 tough and starchy. Income Tax Act APVAT ACT According to the AP Vat Act also Sweet Corn considered as a Vegetable. Entry 18 of Schedule I of the APV AT Act, 2005 is "Vegetables & fruits other than those cured frozen, preserved, processed, dried, dehydrated or canned." According to the Entry 18 of schedule I of the APVAT Act, vegetables are exempted from \'A! To conclude weather Sweet Corn in vegetable or not we applied for advance ruling from the AI V AT department. Mis Sri Sai Agencies, Proprietor - A.Sri Nagaveer, was applied for advance ruling from Commercial tax department for taxability and classification of Sweet corn. He is Mancl~lI1; Director of Mis Tanvi Foods Pvt Ltd Question: Whether the Sweet Corn I Maize I Corn is exempted or fall under Schedule IV of the I\PVA 1 Act? ; AP Vat Act: Under AP VAT Act 2005, Schedule IV of the AP Vat Act contains taxable goods @4/5%, whereas ....
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....ot 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 undertaking engaged in the business of processing, preservation and packaging of meat or meat products or poultry or marine or dairy products if it begins to operate such business before the 1st day of April, 2009." 14.8 Whether the business of the assessee falls under this section for claiming the deduction U/s 80IB (11A) or not , therefore, it has to be decided first that the corn is vegetable or a fruit or it does not fall under any of these categories. In this regard we are concurred with the submissions made by the ld. AR (supra) which is extract from paper book page no. 155 & 156 . So far as our considered opinion "Although corn falls into the grain category, it also fits into the definition of a starchy vegetable. "The definition of a vegetable is 'a usually herbaceous plant grown for an edible part that is usually eaten as part of a meal,'" Gorin says. Yep, corn definitely fits the bill. Plus, the 2015-2020 U.S. Dietary Guidelines for Am....