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2014 (7) TMI 872 - HC - Income TaxDeduction u/s 80I Income from expansion of dispersion unit Held that - Unless the deduction is withdrawn or rejected in the initial assessment years, it cannot be withdrawn in the subsequent AYs Following the decision in Commissioner Of Income-Tax Versus Paul Brothers 1992 (10) TMI 5 - BOMBAY High Court - Tribunal merely applied the principle laid down in the decision and rightly concluded that the denial of deduction by the AO on the reason of legality cannot be sustained thus, the Tribunal did not commit any error of law apparent on the face of the record Decided against Revenue.
Issues:
Challenge to order under section 260 A of the Income Tax Act, 1961 on the allowability of deduction under section 80I for income from expansion of dispersant unit. Analysis: The appeal challenged the Tribunal's order on the allowability of deduction under section 80I for income from the expansion of a dispersant unit. The appellant contended that the deduction was disallowed in the assessment year 2000-01, even though it was allowed in previous years. The Commissioner of Income Tax (Appeals) dismissed the appeal, leading to further challenge before the Tribunal. The appellant argued that the denial of deduction in subsequent years was based on a new ground not raised previously, contrary to the principles established in relevant case laws. Analysis: The Tribunal, however, upheld the deduction, citing the principle that unless a deduction is withdrawn or rejected in initial assessment years, it cannot be denied in subsequent years. The Tribunal referred to a Division Bench judgment that reiterated this principle, emphasizing that the denial of deduction based on legality grounds alone was not sustainable. The High Court concurred with the Tribunal's decision, stating that it was in line with the legal precedents and the factual circumstances of the case. The Court found no error of law in the Tribunal's decision and dismissed the appeal, emphasizing that no substantial question of law arose from the case.
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