INCOME TAX ACT, 1961

Section 80JJA

Deduction under section 80JJA - Profits and gains from business of collecting and processing of bio-degradable waste - Whether product manufacture by assessee qualify for deduction -

Assessee had set up a new business claiming deduction under section 80JJA for producing bio fertilizers. Noting the fact that assessee till 2014-15 assessment year claimed to have engaged in the production and sale of bio pesticides on account of which tax exemption under section 80JJA had been sought and had been granted the claim for producing bio fertilizers after setting up a new unit was questioned. Referring to the fact that there was an earlier certificate claiming that assessee was manufacturing fertilizers AO and CIT(A) questioned the evidence relied upon by assessee on the ground that said certificate did not declare specific period, i.e., for how many years assessee was stated to be engaged in specific business. Held: Assessee as per its claim had stated that organic fertilizers were being produced. It was seen that raw material utilized as per record was waste collected from various industries like Maggi, Chocolates, Milk Powder, sugar, etc. Assessee was also using agricultural waste like wheat straw, rice straw, kitchen waste etc. It was necessary for assessee also to clarify whether along with original production of 'bio-pesticides' had assessee supplemented it with an additional production of organic manure or bio-fertilizers or is the assessee carrying on the very same activity which was now being shown as bio-fertilizers. Report of a Chemical Expert certifying the contents of the two separate and distinct products namely 'bio-pesticides' and 'bio-fertilizers' or 'organic manure' was to be brought on record. Accordingly, matter was remanded to AO with direction to pass a speaking order in accordance with law.

REFERRED :

FAVOUR : In assessee's favour by way of remand

A.Y. : 2015-16

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