2010 (12) TMI 737 - AT - Income Tax

Deduction u/s 10A - assessee has placed copy of the Tribunal order dated 27.11.2009 in ITA No.2696/Del/2005 for AY 2001-02 at pages 202 to 210 of the paper book. In that order, the Tribunal has recorded a finding that assessee has fulfilled all the requisite conditions for claiming deduction u/s 10A as discussed by the CIT(A) and assessee was held to be entitled for deduction u/s 10A by the Tribunal vide its earlier order, therefore the ground of the Revenue relating to 10A was rejected. As regards the cross-objection - It was specifically stated by the assessee before the AO that deduction u/s 80HHE was not claimed/allowed in respect of any of the preceding year - No material has been brought on record by the Revenue to show that in any of the preceding assessment years, claim of deduction u/s 80HHE was allowed to the assessee - Therefore, assessee cannot be held to be ineligible for deduction u/s 10A on that ground - Hence, the crossobjection filed by the assessee is allowed.

Summary

Issues:
1. Allowability of deduction u/s 10A for AY 2004-05.
2. Claim of deduction u/s 80HHE in preceding years.

Analysis:
1. The appeal was filed by the Revenue against the order of CIT(A) for AY 2004-05, challenging the allowance of deduction u/s 10A amounting to Rs.9,30,00,275. The AO had disallowed the claim of the assessee u/s 10A, citing previous disallowances for AY 2001-02 and 2002-03. The assessee contended that it fulfilled all conditions for claiming deduction u/s 10A and had not claimed deduction u/s 80HHE in preceding years. The ITAT, referring to a previous order for AY 2001-02, upheld the claim of the assessee for deduction u/s 10A, stating that all requisite conditions were met. The Tribunal rejected the Revenue's appeal, affirming the CIT(A)'s decision based on identical facts of AY 2001-02 and 2004-05.

2. The cross-objection by the assessee pertained to the non-claim/allowance of deduction u/s 80HHE in preceding years. The assessee argued that the deduction u/s 80HHE was never claimed and was only an alternative submission during assessment proceedings in case deduction u/s 10A was disallowed. The Tribunal noted that no evidence was presented by the Revenue to prove allowance of deduction u/s 80HHE in prior years. Consequently, the Tribunal allowed the cross-objection, stating that the assessee was not ineligible for deduction u/s 10A due to non-claim of deduction u/s 80HHE in preceding years.

In conclusion, the Tribunal dismissed the Revenue's appeal regarding deduction u/s 10A for AY 2004-05, upholding the CIT(A)'s decision. Additionally, the Tribunal allowed the assessee's cross-objection concerning the non-claim of deduction u/s 80HHE in previous years. The judgment emphasized the fulfillment of conditions for deduction u/s 10A and the lack of evidence supporting the allowance of deduction u/s 80HHE in prior assessments.