2010 (2) TMI 834 - AT - Income Tax

Deduction under section 10A of the Act which was denied by the Assessing Officer - assessee has also raised an alternative plea that in the event of not granting deduction under section 10A, the assessee should be allowed deduction under section 80HHE of the Act - Held that - assessee cannot claim a double deduction by way of making a claim under section 80HHE also, in addition to deduction under section 10A of the Act, assessee is not eligible for grant of deduction under section 80HHE of the Act.

Summary

Issues:
1. Deduction under section 10A of the Act denied by CIT(A)
2. Alternative claim for deduction under section 80HHE
3. Claim of double deduction by the assessee
4. Decision of ITAT in favor of the assessee regarding claim under section 10A
5. Merits of the assessee's eligibility for deduction under section 80HHE
6. Dismissal of appeals by ITAT as academic exercise

Analysis:
1. The appeals were filed by the assessee-company against the Order passed by the CIT(A)-XXVII, Mumbai, denying deduction under section 10A of the Act. The company claimed deduction for processing revenue accounts of airlines. The ITAT, "B" Bench, Mumbai accepted the claim of the assessee under section 10A in a combined order dated 16th April, 2009. The main contention of the assessee was upheld by the ITAT, leading to the dismissal of the appeals by ITAT as they were deemed academic.

2. The assessee raised an alternative plea for deduction under section 80HHE of the Act if deduction under section 10A was not granted. The CIT(A) rejected the claim under section 10A but referred the matter of deduction under section 80HHE back to the Assessing Officer. The Assessing Officer later concluded that the assessee was not eligible for deduction under section 80HHE. The assessee's representative argued for considering the alternative claim under section 80HHE, even though acknowledging the impossibility of claiming double deduction.

3. The ITAT dismissed the appeals by the assessee, stating that discussing the alternative claim under section 80HHE at that point would be an academic exercise, given the acceptance of the main contention under section 10A by the ITAT. The dismissal was based on the grounds that the appeals were of an academic nature. However, the assessee was granted the liberty to seek legal remedy by filing a Miscellaneous Application (M.A.) or through other means if permissible under the law to revive the dismissed appeals.

4. The learned Counsel for the assessee admitted the inability to claim double deduction under both sections 10A and 80HHE. The Departmental Representative (D.R.) supported the Order of the CIT(A) by stating that the assessee was not eligible for deduction under section 80HHE on merits. The dismissal of the appeals by the ITAT was based on the acceptance of the main contention under section 10A, rendering the discussion on the alternative claim under section 80HHE unnecessary and academic.

5. In conclusion, the ITAT, Mumbai dismissed the appeals filed by the assessee as they were considered academic in nature, following the acceptance of the main contention under section 10A by the ITAT. The dismissal allowed the assessee the option to pursue legal remedies to revive the appeals if permissible under the law, despite the dismissal of the appeals by the ITAT.