INCOME TAX OFFICER Vs. NAVBHARAT SEEDS P LTD
LAWS(IT)-1989-11-7
INCOME TAX APPELLATE TRIBUNAL
Decided on November 29,1989

Appellant
VERSUS
Respondents

JUDGEMENT

R.M. Mehta, Accountant Member - (1.)THE following effective ground is raised in this appeal preferred against the order of the CIT(Appeals):
THE learned CIT(A) has erred in law in holding that the assessee company satisfies the conditions prescribed under Section 80HHA(2) and under Section 80-1 (2) of the I.T. Act.

(2.)The respondent in this case is a Private Limited Company and the asst. year involved is 1983-84 with the previous year ending 30th September, 1982. The ITO in the course of the assessment proceedings rejected the claim for deduction under Sections 80-1 and 80HHA of the I.T. Act, 1961. In doing so he recorded the following reasons:
The company has claimed deduction Under Section 80-1 and 80HH of I.T. Act. The company has claimed that their business is of processing of seeds and therefore they are eligible for deduction. The company has given a detailed note about its activities. It is stated that the company purchase foundation seeds and sell it to farmers for growing hybrid seeds. The company renders technical advice and managerial guidance. After the produce is harvested, the samples are collected and tested for purity, viability and moisture content If samples are approved, the seeds are purchased. If seeds are than graded and claimed by mechanical process and sorted out in three categories, they are then treated with mixture of chemicals and mixed mechanically as a result of which chemical mixed is coated on seeds. The seeds are then packed.

(3.)IT is claimed that their work is covered by processing of goods and therefore they are eligible for deduction under Section 80-1.


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