2015 (12) TMI 24 - AT - Income Tax

Eligibility for deduction under section 80IB for Unit-II - CIT(A) allowed claim - Held that - As could be seen from the impugned order of the learned Commissioner (Appeals), the Tribunal, while deciding assessee s appeal for the assessment year 2003-04, allowed assessee s claim of deduction under section 80IB, by holding that Unit-II, is a separate industrial undertaking. This decision was again followed in assessee s own case for the assessment year 2004-05 Thus the Tribunal holding that Unit-II, is a separate industrial undertaking has allowed assessee s claim of deduction under section 80IB of the Act. The learned Commissioner (Appeals), having allowed assessee s claim of deduction following the aforesaid decision of the Tribunal, there is no reason to interfere with the same which is hereby upheld. - Decided in favour of assessee

Summary

Issues:
1. Allowance of deduction under section 80IB for Unit II
2. Integration of old and new units as a single unit
3. Disallowance of deduction based on previous assessment orders

Analysis:

Issue 1: Allowance of deduction under section 80IB for Unit II
The appeal filed by the Department challenged the order allowing a deduction of &8377; 8,24,335 claimed by the assessee under section 80IB for Unit II. The Department argued that Unit II was not entitled to 100% deduction under section 80IB as it was considered an extension of Unit I. The Tribunal reviewed the history of the case, noting that in previous assessments, the deduction for Unit II had been disallowed. However, the Tribunal referred to previous orders where it was established that Unit II was a separate industrial undertaking eligible for the deduction. The Tribunal upheld the decision of the Commissioner (Appeals) to allow the deduction for Unit II, citing previous Tribunal rulings in favor of the assessee.

Issue 2: Integration of old and new units as a single unit
The Department contended that the new unit (Unit II) and the old unit (Unit I) should be considered an integrated single unit, thus not qualifying for the deduction under section 80IB. The assessee argued that Unit II was a separate industrial undertaking eligible for the deduction. The Tribunal referred to previous orders where it was established that Unit II was indeed a separate industrial undertaking entitled to the deduction. The Tribunal upheld the decision of the Commissioner (Appeals) to allow the deduction for Unit II based on the previous Tribunal rulings in favor of the assessee.

Issue 3: Disallowance of deduction based on previous assessment orders
The Assessing Officer had disallowed the deduction for Unit II based on previous assessment orders that considered Unit II as an extension of Unit I. However, the Tribunal, in previous orders, had ruled in favor of the assessee, establishing that Unit II was a separate industrial undertaking eligible for the deduction under section 80IB. The Tribunal upheld the decision of the Commissioner (Appeals) to allow the deduction for Unit II, citing the previous Tribunal rulings in favor of the assessee.

In conclusion, the Tribunal dismissed the Revenue's appeal, upholding the allowance of deduction under section 80IB for Unit II based on the established separate industrial undertaking status of Unit II.