2017 (9) TMI 1652 - AT - Income Tax

Claim of the assessee u/s 80IC - deduction claimed at time of assessment which was not claimed in the IT return or revised return - Held that - Assessee is entitled to raise additional claim which was not made in its return of income in terms of judgment of Hon ble Supreme Court in the case of Jute Corporation of India Ltd. (1990 (9) TMI 6 - SUPREME COURT) wherein it was held that the additional claim of assessee can be admitted by the appellant authority though the same was not made in the income tax return. In the instant case, the deduction was omitted to be claimed by the assessee in its income tax return filed electronically inadvertently. AO has not brought anything on record showing any infirmity in the amount of deduction claim by the assessee by way of filing a separate letter during the course of assessment proceedings. In the background of the above discussions and precedent we do not find any infirmity in the order of Ld. CIT(A) and accordingly we uphold the same. This ground of Revenue s appeal is dismissed. Claim u/s. 80IA computation - Not setting off the loss of a unit eligible u/s. 80IA with another unit eligible u/s. 80IA of the Act - Held that - As relying on Jindal Aluminium Ltd. 2012 (11) TMI 507 - ITAT BANGALORE the AO is directed to compute the deduction u/s.80IA without making any adjustment of loss of one unit with the profit of another unit and allow the deduction accordingly on the profit derived from one eligible unit. - Decided against revenue

Summary

Issues:
1. Entitlement to claim deduction u/s 80IC without filing revised return.
2. Setting off loss of one unit against profit of another unit u/s 80IA.

Entitlement to claim deduction u/s 80IC without filing revised return:
The appeal addressed the issue of whether an assessee can claim a deduction under section 80IC of the Income Tax Act without including it in the original or revised return of income. The Revenue contended that the claim of deduction amounting to ?8,52,27,373 was disallowed by the Assessing Officer (AO) as it was not included in the returns. However, the Commissioner of Income Tax (Appeals) allowed the deduction, citing the appellant authority's power to admit claims not made in the return. The judgment referred to various court decisions, including the Supreme Court's ruling in the case of Jute Corporation of India Ltd., emphasizing the appellate authority's jurisdiction to entertain such claims. The Tribunal upheld the CIT(A)'s decision, stating that the AO cannot restrict the appellant authority from admitting fresh claims not in the return.

Setting off loss of one unit against profit of another unit u/s 80IA:
The second issue revolved around the set-off of losses from one unit against profits of another unit under section 80IA of the Act. The AO allowed the deduction by setting off the loss of one power plant against the profit of another power plant. The assessee challenged this decision, arguing that deductions under section 80IA should be unit-wise without adjusting losses from other units. The CIT(A) ruled in favor of the assessee, following the ITAT Bengaluru Bench's decision in the case of Jindal Aluminium Ltd., which emphasized granting deductions on a unit-wise basis. The Tribunal upheld the CIT(A)'s decision, stating that the deduction should be allowed without setting off losses from one unit against the profit of another eligible unit.

This detailed analysis of the judgment provides insights into the legal principles applied by the Tribunal in addressing the issues raised by the Revenue regarding deductions under sections 80IC and 80IA of the Income Tax Act.