2012 (3) TMI 546 - AT - Income Tax

Disallowance of the assessee s claim of deduction u/s 80IB - Held that - No evidence was furnished by the assessee before the A.O. in respect of putting up of new unit in assessment year 2001-02, we find that as per the assessment order passed by the A.O. u/s 143(3) for the assessment year 2004-05 and assessment year 2006-07, deduction was allowed by the A.O. to the assessee u/s 80- IB. The A.O. himself has stated in the assessment order that for the unit established by the assessee in assessment year 1994-95, assessee was getting deduction u/s 80-IA up to assessment year 2004-05. If this be so, then for new unit only, deduction was allowed by the A.O. u/s 80-IB in assessment year 2006-07. This goes to show that this fact was very much available in the record of the department that the assessee has established a new unit in assessment year 2001-02 and in respect of this unit, deduction was allowed by the A.O. to the assessee u/s 80-IB in assessment year 2006-07 also. Hence, we do not find any merit in the contention of the Ld. D.R. - Decided in favour of assessee.

Summary

Issues:
- Disallowance of deduction claimed under section 80-IB of the Income Tax Act, 1961.

Analysis:
1. The appeal by the revenue challenged the order of the Ld. CIT(A) regarding the disallowance of the assessee's claim of deduction under section 80IB. The A.O. noted discrepancies in the deduction claimed by the assessee under sections 80-IA and 80-I in the return filed. The A.O. observed uncertainty in the assessee's eligibility for the deduction. The assessee claimed to have started manufacturing a new product during the relevant year. However, the A.O. found insufficient evidence to support this claim, leading to the disallowance.

2. The Ld. D.R. supported the assessment order, emphasizing the lack of evidence provided by the assessee regarding the establishment of the new unit. Conversely, the Ld. A.R. of the assessee argued in favor of the Ld. CIT(A)'s decision. The A.R. presented documents showing that the A.O. had previously allowed deductions under section 80-IB for the new unit in previous assessment years, supporting the current claim.

3. The Ld. CIT(A) analyzed the case and found that the A.O. had previously allowed deductions under section 80-IB for the new unit in question. Referring to the judgment of the Hon'ble Gujarat High Court, the Ld. CIT(A) concluded that once relief is granted to a new industrial undertaking, it cannot be withdrawn without valid reasons. The Ld. CIT(A) upheld the assessee's claim based on the evidence provided and the A.O.'s previous actions.

4. The ITAT, after considering the submissions and evidence, upheld the decision of the Ld. CIT(A). The ITAT found that the A.O. had allowed deductions for the new unit in previous assessment years, indicating the establishment of the unit. The ITAT rejected the revenue's appeal, citing the lack of merit in challenging the Ld. CIT(A)'s well-reasoned decision based on available evidence and legal precedent.

5. In conclusion, the ITAT dismissed the revenue's appeal, affirming the decision of the Ld. CIT(A) to allow the deduction claimed under section 80-IB. The ITAT found no grounds to interfere with the lower authority's decision, given the evidence presented and the consistent allowance of deductions in previous assessment years.