9911796707
TMI Blog2011 (12) TMI 718X X X X Extracts X X X X X X X X Extracts X X X X ..... rs of the authorities below on the impugned issues are that the assessee is engaged in the manufacturing of Implantable Surgical Devices. During the course of assessment proceedings, it was noticed by the Assessing Officer that the assessee was engaged in the manufacturing of Implantable Surgical Devices and have also claimed that it had started business of Food Division in which the Company has started manufacturing of Ready to Cook Foods. The Assessing Officer has also noticed from form No.3CD giving statement of particulars required to be furnished under section 44AB of the Income-tax Act, 1961 (hereinafter in short the Act ) filed by the assessee that against column No.8, the assessee has furnished information that it was engaged in manufacture of Implantable Surgical Devices and Disposable Drops and Dressup and there was no change in the nature of business or profession. From these details, the Assessing Officer has observed that no business of Food Division was carried on during the year. Similar was the position with respect to the profit and loss account of the assessee and the details of raw-materials consumed. Nowhere the assessee has made any reference with regard to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the name of the assessee. It is not understandable why an organization which is establishing a food division plant by purchasing machinery worth several crores of rupees would purchase such small raw material and that too from a small grocery shop. Further enquires were made regarding the sale of Dal etc from M/s Sahai Traders and there was nothing to establish that the said purchases was authentic as the grocery shop owner did not remember any such sales. Moreover, the sale of food product to M/s Raju General Store, Shahjahanpur could not be established as on enquiry from ITO, Shahjahanpur, the existence of such firm was not established. The assessee has now came forward with a different explanation that it had arranged a Display Meet before launching the product in the market in the month of March, 2008 and in this meet it had distributed free sample and in the said meet owners of M/s Raju General Stores had also participated and had purchased the material from the company and had made cash payment for their purchases. No other sales has been made by the assessee. The cash sale voucher is computer generated and there is no mention of any Commercial Tax/Trade Tax Registration ove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... machineries were used for the purpose of research of various Food Products and after conducting in-house research, the production of Food Products was started on 25.3.2008. He placed heavy reliance upon the Certificate issued by the Commercial Tax Department in which it was stated that the Company has started production of Food Products on 25.3.2008. He has also placed reliance upon the survey conducted by the Commercial Tax Department on 14.1.2008 in which they have mentioned that the Plant is almost ready and production is expected by March/April 2008. In VAT Return, the assessee has declared sale of Food Products and this stand of the assessee was accepted by the Commercial Tax Department in VAT assessment. He has also explained the process of manufacturing of Food Products. 5. Being convinced with the explanations of the assessee, the ld. CIT(A) has accepted the claim of the assessee and held that the business of the assessee commenced during the period under consideration. Accordingly, the Assessing Officer was directed to allow deduction under section 35(1)(iv) of the Act and also depreciation on Machineries and building of Food Division. 6. Aggrieved with the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arch in Food Products. Therefore, the details furnished by the assessee clearly show that the assessee has not started any production before the end of the financial year under consideration and the assessee has simply fabricated evidence to claim benefit of provisions of section 35(1)(iv) of the Act and also depreciation on Machineries. The ld. CIT (DR) further contended that it is for the assessee to place relevant evidence on record to substantiate its claim that the production was started before the end of the financial year. 7. The ld. counsel for the assessee besides placing heavy reliance upon the order of the ld. CIT(A) has contended that the assessee has furnished all the relevant evidences in support of its claim. The Commercial Tax Department have also issued a Certificate that production by the Food Division was started on 25.3.2008. Besides, VAT Return was also submitted to the Department for the month of March 2008 in which sale of Food Products have been shown. Since the assessee has placed all the relevant evidences in support of its claim, the same was duly examined by the ld. CIT(A) before allowing the same. 8. Having heard the rival submissions and from a c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The copies of these invoices are available at pages 20 to 25 of assessee s compilation. We have also carefully examined the copy of Stock Register placed on record wherefrom it is noticed that some of these purchases were shown to have been made in January 2008 on different dates, but the entire products were sold between 25.3.2008 and 29.3.2008. The details of the purchases of raw-materials and its issuance are available at pages 18 to 38 of the assessee s compilation. From these details, it appears that whatever purchases made were issued for its utilization upto 28.3.2008 whereas according to the own statement of the assessee, the production was started from 25.3.2008. The assessee itself has also stated that before start of production, the assessee has utilized its Machineries for making research in Food Products meaning thereby whatever raw-material was issued by the assessee in the months of January and February 2008 were utilized for making research. If that be the case, the entire quantities purchased would not be available with the assessee for sale as a final product in the market. But the assessee has declared that the quantity of finished product sold in the market is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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