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Issues involved:
The judgment involves a common issue regarding the claim of deduction u/s.10B of the Income-tax Act, 1961. Details of the Judgment: Issue 1: Claim of Deduction u/s.10B - The cross appeals by the assessee and the Revenue arose from a common order of the Commissioner of Income-tax (Appeals)-VIII, Ahmedabad. - The assessment for the year 2003-04 was framed by the Income-tax Officer, Ward-4(1), Ahmedabad u/s.143(3) of the Income-tax Act, 1961. - The assessee contended that second-hand library books purchased from a sister company were not considered "plant" u/s.43(3) of the Act for the purpose of claiming exemption u/s.10B. - The Revenue challenged the direction to allow eligible deduction u/s.80HHC in view of the denial of the claim u/s.10B. - The Tribunal considered the distinct nature of the appellant's business from that of the sister concerns engaged in computer training, emphasizing the eligibility for deduction based on the formation of a new unit not constituted by the transfer of old machinery. - Relying on precedents and the Supreme Court's decision, the Tribunal upheld the claim of the assessee on merits, emphasizing that once the deduction is allowed in the initial year, it cannot be denied in subsequent years on the same ground. - The Department Representative acknowledged that the deduction was allowed in the earlier year, leading to the Tribunal's decision to dismiss the Revenue's appeal and allow the assessee's appeal. Conclusion: The Tribunal ruled in favor of the assessee, highlighting the eligibility for deduction u/s.10B based on the distinct nature of the business and the formation of a new unit not involving the transfer of old machinery. The decision was supported by legal precedents and the principle that once a deduction is allowed in the first year, it cannot be denied in subsequent years.
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