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2015 (10) TMI 250 - AT - Income TaxClaim of deduction u/s 80IAB disallowed - assessee has not made the claim in its original return of income, has not filed Form 10CCB alongwith the return of income and has not maintained separate books of accounts - Held that - As regards the first objection, we find that it is not sustainable as the assessee had filed a revised return of income in which the claim u/s 80IAB was made. According to the AO, the revised return was barred by limitation, but the fact that he has acted upon it by accepting the income returned therein belies his contention that it is not a valid return. Having accepted the revised return in part, he cannot ignore the claim of the assessee u/s 80IAB of the Act. As regards the second objection that Form 10CCB was not filed along with the return of income, we find that Rule 18BBB required that Form 10CCB be filed along with the return of income, we are of the opinion that it would also fulfil the requirement if it is filed before completion of the assessment proceedings. In the case before us, the the assessee has filed Form No.10CCB on the last date of hearing due to which AO could not have verified the same to appreciate the correctness of the claim. As regards the third objection, we find that the CIT (A) has relied on section 80IA(10) dealing with similar provisions as section 80IAB to hold that the AO in computing the profit and gains of the eligible business for the purpose of the deductions u/s 80IA, can take the amounts of profit as may be reasonably deemed to have been derived therefrom. Thus, it is clear that even if the assessee is not maintaining separate books of accounts for eligible units, the AO shall compute the deduction on a reasonable basis provided the business transacted between eligible business and any other person produces to the assessee more than the ordinary profits which might be expected to arise in such eligible business. In the case before us, the CIT (A) has simply applied the said provision without examining whether the assessee satisfies the conditions prescribed thereunder. Therefore, for verification as to whether the assessee satisfied the conditions u/s 80IA(10) of the Act and for computation of deduction u/s 80IAB of the Act, we deem it fit and proper to remand the issue to the file of the AO. - Decided in favour of assessee for statistical purposes. Disallowance of the interest paid to NTPC u/s 40(a)(ia) - non deduction of TDS - CIT(A) deleted the disallowance - Held that - At the time of hearing the ld Counsel for the assessee filed before us copies of the orders of the Tribunal at Agra in the case of Satish Chand Agarwal Vs JCIT 2014 (6) TMI 430 - ITAT AGRA and Rajeev Kumar Agarwal Vs ACIT 2014 (6) TMI 79 - ITAT AGRA both dated 29.05.2013, wherein after discussing the issue at length, the Tribunal has held that insertion of provisos are treated as declaratory and clarificatory in nature and therefore, it has retrospective effect from 1.4.2005 i.e. from the date from which sub clause (ia) of section 40(a)(ia) was inserted by the Finance Act, 2004. Respectfully following the said decision of the Tribunal on the legal issue about the retrospective effect of the amended provisions of section 40(a)(ia), we see no reason to interfere with the order of the CIT (A)who has taken note of amendment to section 201 and section 40(a)(ia) made by the Finance Act of 2012 w.e.f. 1.4.2013 to the effect that the said provisions would not apply, if the payee has taken the amount in computing its income and paid tax thereon. We find that the CIT (A) has observed that the proiviso that was inserted w.e.f. 1.4.2013 are to remedy unintended consequences and therefore, the same are treated as clarificatory in nature and retrospective in operation - Decided in favour of assessee.
Issues:
1. Disallowance of deduction u/s 80IAB for failure to make the claim in the original return of income, and not filing Form 10CCB along with the return. 2. Disallowance of interest expenditure u/s 40(a)(ia) for non-deduction of tax at source. 3. Maintenance of separate books of accounts for eligible units for claiming deductions. Analysis: Issue 1: Disallowance of deduction u/s 80IAB The assessee, a State Public Sector Undertaking, filed a revised return of income claiming a deduction u/s 80IAB for income from SEZ. The AO disallowed the claim citing non-filing in the original return and lack of Form 10CCB submission. The CIT (A) granted relief, but the Revenue contended that the claim was not valid due to technicalities. The Tribunal held that the revised return was accepted by the AO, making the claim valid. While Form 10CCB was filed late, it was deemed acceptable if submitted before completion of assessment. The issue was remanded to the AO for verification. Issue 2: Disallowance of interest expenditure u/s 40(a)(ia) The AO disallowed interest paid to NTPC under section 40(a)(ia) for non-deduction of tax at source. The CIT (A) granted relief based on retrospective effect of the amended provisions. The Tribunal upheld the decision, considering the payee's tax payment and retrospective applicability of the amendment. Issue 3: Maintenance of separate books of accounts The AO raised concerns about the lack of separate books of accounts for eligible units. The Tribunal noted that while separate books were not maintained, the AO could compute deductions reasonably under section 80IA(10). The issue was remanded to verify compliance with conditions under the Act. In conclusion, the Tribunal dismissed the Revenue's appeals for A.Ys 2009-10 and 2010-11 based on the above analyses, emphasizing the validity of the revised return, retrospective application of tax provisions, and the need for proper verification of claims and compliance with statutory requirements.
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