2014 (1) TMI 1846 - AT - Income Tax

Claim of deduction u/s 80IA/80IB - Held that - The issue before us stands decided in the case of the assessee for preceding Assessment Year 2005-06 2012 (5) TMI 793 - ITAT NEW DELHI wherein it was held that issue raised by the revenue has been repeatedly and consistently held in favour of the assessee from Assessment Years 1998-99 to 2004-05. Addition of excise duty on exports made during the year - Held that - As decided in assessee s own case the drawback does not immediately accrue on export. Drawback is payable post actual export. It requires submission of an application, completion and compliance with formalities and acceptance. After exports are affected, for claiming drawback the assessee has to file application within the prescribed time before the authorities in terms of various rules and regulations. The said Rules/regulations stipulate conditions when drawback is payable or not payable. Application claiming drawback is merely a claim. The amount claimed has to be verified, quantified and determined by the authorities who are empowered under the statutory provisions - decided against assessee Disallowance of depreciation on computer accessories and UPS - Held that - Claim allowed as relying on COMMISSIONER OF INCOME TAX VERSUS ORIENT CERAMICS & INDS. LTD 2011 (1) TMI 26 - DELHI HIGH COURT and COMMISSIONER OF INCOME TAX VERSUS BSES YAMUNA POWERS LLD. / BSES RAJDHANI POWERS LTD. 2010 (8) TMI 58 - DELHI HIGH COURT

Summary

Issues:
1. Claim of deduction u/s 80IA/80IB
2. Addition of excise duty on exports
3. Disallowance of depreciation on computer accessories

Claim of deduction u/s 80IA/80IB:
The appeal pertains to the disallowance of a deduction claim under section 80IA of the Income Tax Act, 1961 for the Assessment Year 2006-07. The Assessing Officer disallowed the claim on the grounds that the investment in plant and machinery exceeded the limit for small scale industries. However, the CIT(A) allowed the claim based on previous orders favoring the appellant. The ITAT upheld the CIT(A)'s decision, stating that the requirement for being a small scale industry undertaking is only for the initial year of the claim. The ITAT referred to earlier years' orders where the appellant was held eligible for the deduction, and hence, allowed the claim of deduction amounting to Rs. 38,74,04,947.

Addition of excise duty on exports:
The second issue concerns the addition of Rs. 3,72,29,219 representing excise duty on exports made during the year. The CIT(A) deleted the addition based on the appellant's submissions and legal propositions. The CIT(A) considered that the excise duty refund claim was subject to uncertainties and required approval by the authorities. Referring to previous judgments and the procedural requirements for claiming export benefits, the CIT(A) allowed the appeal and directed the deletion of the addition. The High Court upheld the CIT(A)'s decision, emphasizing that export benefits do not accrue automatically upon export but are subject to formalities and compliance with regulations. Consequently, the ITAT dismissed the revenue's appeal, following the High Court's order.

Disallowance of depreciation on computer accessories:
The final issue pertains to the claim of depreciation on computer accessories. The CIT(A) deleted the addition based on the judgments of the jurisdictional High court in relevant cases. Citing binding judicial precedents, the ITAT upheld the CIT(A)'s decision and dismissed the revenue's appeal. The ITAT pronounced the order in favor of the respondent, thereby dismissing the appeal of the revenue.

In conclusion, the ITAT upheld the CIT(A)'s decisions on all three issues, allowing the deduction claim under section 80IA/80IB, deleting the addition of excise duty on exports, and disallowing the depreciation on computer accessories based on relevant legal precedents and interpretations of the Income Tax Act.