2012 (1) TMI 299 - AT - Income Tax

Summary

Issues involved: Application of 'principle of mutuality' in respect of receipt for treatment of industrial effluent for AY 2004-05.

Summary:

Issue 1: Application of 'principle of mutuality'
The appeal by the assessee challenges the order of the CIT(A) for AY 2004-05, focusing on whether the 'principle of mutuality' applies to the receipt for treatment of industrial effluent. The Tribunal noted a similar issue for AY 2005-06, where the Assessing Officer and CIT(A) had decided the claim of deduction u/s 80IA but did not adjudicate on the principle of mutuality. The Tribunal remanded the issue of mutuality back to the Assessing Officer for proper consideration and adjudication in accordance with the law.

The Tribunal considered various arguments and legal positions regarding the deduction u/s 80IA, emphasizing that the relief is restricted to enterprises owned by a company or consortium of companies. The Assessing Officer rejected the deduction claimed by the assessee under u/s 80IA, stating that the enterprise must meet specific qualifications as per the statute. The CIT(A) upheld the Assessing Officer's decision on the deduction u/s 80IA, confirming the disallowance made. However, both the Assessing Officer and CIT(A) did not address the issue of the principle of mutuality raised by the assessee. Therefore, the Tribunal directed the Assessing Officer to reconsider and decide on the principle of mutuality in the case.

In conclusion, the Tribunal allowed the appeal filed by the assessee for statistical purposes and remanded the issue of the principle of mutuality back to the Assessing Officer for proper consideration and adjudication in accordance with the law.

Order pronounced in the open court on the 11th day of January 2012.