2015 (1) TMI 245 - HC - Income Tax

Entitlement for deduction u/s 80IA - plant and machinery used by earlier owner or not - Whether the Tribunal has substantially erred in holding that the assessee is entitled to deduction u/s 80I Held that - The Tribunal was rightly of the view that there is no case for the AO to denying the the benefit of deduction u/s. 80I - The new unit in the name of Harsidh Detergents had not set up any business by the previous owner M/s. Harsidh Specific Family Trust who had only purchased some amount of the new plant and machinery intending to start a new undertaking for manufacture of detergent power in the city of Ahmedabad - deduction u/s. 80I is available to the industrial undertaking and not the the assessee and prior to having been over by the assessee, the plant and machinery valuing ₹ 6,92,397/- was in fact never used by the earlier owner viz. Harsidh Specific Family Trust thus, the Tribunal has rightly observed that the plant and machinery were never used by the earlier owner, therefore, the assessee is entitled to grant deduction u/s 80I the order of the Tribunal is upheld Decided against revenue.

Summary

Issues involved:
- Appeal filed by the appellant-revenue against the order of the Income Tax Appellate Tribunal.
- Identical facts and legal questions in all appeals.
- Disputed deduction under Section 80I of the Income Tax Act.

Analysis:

Issue 1: Appeal against Tribunal's Order
The appellant-revenue filed appeals against the orders passed by the Income Tax Appellate Tribunal. The Tribunal partly allowed the appeals filed by the assessee for different assessment years. The primary contention was regarding the deduction under Section 80I of the Income Tax Act.

Issue 2: Identical Facts and Legal Questions
All appeals had similar facts and legal issues, leading to a common judgment. The respondent-assessee had filed returns for different assessment years, showing varying total incomes. The Assessing Officer made additions after scrutiny, which were partly allowed by the CIT(A). Subsequently, the assessee appealed before the Tribunal, which also partly allowed the appeals.

Issue 3: Disputed Deduction under Section 80I
The core question of law in all appeals was whether the assessee was entitled to deduction under Section 80I of the Income Tax Act. The appellant-revenue argued that the Tribunal erred in allowing the deduction and that the material on record was not properly considered. Conversely, the senior advocate for the assessee supported the Tribunal's decision, stating that there was no need for interference given the concurrent findings of the CIT(A) and the Tribunal.

Judgment Analysis:
The High Court analyzed the Tribunal's observations and the arguments presented by both parties. The Tribunal had considered the evidence and concluded that the assessee was entitled to the deduction under Section 80I. The Court agreed with the Tribunal's reasoning, emphasizing that the plant and machinery were never used by the earlier owner, justifying the assessee's eligibility for the deduction. The Court found no legal or factual errors in the Tribunal's decision and dismissed the appeals. Consequently, the question of law was answered in favor of the assessee and against the revenue.

In conclusion, the High Court upheld the Tribunal's decision, affirming the assessee's entitlement to the deduction under Section 80I. The judgment highlighted the importance of factual considerations and supported the Tribunal's well-founded conclusion, ultimately ruling in favor of the assessee and dismissing the revenue's appeals.