2011 (12) TMI 674 - AT - Income Tax

Summary

Issues involved: Disallowance claim under section 80-IB of the Income Tax Act, 1961 for assessment year 2002-03.

The appellant, an assessee, filed an appeal against the order of CIT(A), Jammu, dated 27.06.2011, concerning the disallowance claim of Rs. 2,29,319/- under section 80-IB of the Income Tax Act, 1961. The appellant claimed deduction u/s 80IB for the assessment year 2002-03, stating that the business activity was video software generation. However, it was found that the appellant's role was limited to editing and supplying sound to films already shot by customers, rather than manufacturing a new article or thing as required by section 80IB. The AO disallowed the claim following a previous order of ITAT, Amritsar Bench (SMC), in the appellant's own case for the assessment year 2001-02.

On appeal, the Ld. CIT(A) upheld the disallowance claim based on the ITAT, Amritsar Bench (SMC) order from 17.10.2005 in the appellant's own case.

During the hearing, it was noted that a similar issue had been decided against the appellant in the assessment year 2011-02 by ITAT, Amritsar Bench (SMC). The Tribunal observed that the appellant failed to explain the exact scope of activities undertaken and could not provide evidence to support the claim of being engaged in video software generation. The Tribunal emphasized that the appellant needed to establish with evidence that the activities amounted to 'manufacture' or 'production', which was not achieved merely by asserting engagement in such business. The Tribunal agreed with the previous decision and upheld the order of the CIT(A), dismissing the appeal of the appellant.

In conclusion, the appeal filed by the appellant was dismissed, and the order was pronounced in the open court on 14th December 2011.