PhD funding agency, and conflict of research and development I am doing PhD which is funded by Science and technology department. Those coming to check progress (first time) are mainly software engineers, while in PhD the work is research based. So far I have published some papers in initial years including a review, early experiments. Another Journal paper is ready for submission and one paper submitted which I co-authored. BUT these things are something only a PhD understands and they are coming mainly to check the software (still under development). What I expect from them is that they will definitely say that it should have been developed by now without realizing the research progress.

How should I justify the research part and the development part both so they get satisfied with the work? Because my advisor also told me that they don't know anything about research and they are mainly interested in the software.
Just try to explain that you cannot spend all your time on software development. Consider having your advisor present during the meeting to support this.

Show them the software, and ask them what they think about it, how they would hypothetically further develop it, what tips they can give you. Try to change the discussion to a constructive conversation where they help you and you can exploit their expertise. People generally appreciate when you value their knowledge, and are often happy to help.