2010 (9) TMI 1254 - AT - Income Tax

Summary

Issues involved: Appeal against order of Commissioner of Income-tax (Appeals) for assessment year 2006-2007.

Deduction u/s.80-IB:
The appeal raised grounds against granting deduction u/s.80-IB. The Tribunal upheld the deduction for adhesive unit at Bhimpore, Daman, and Epoxy M-Seal unit at Kadaiya, Daman, based on precedent from earlier years where similar deductions were allowed. The grounds related to deduction u/s.80-IB failed.

Deduction u/s.80-IB on DEPB:
The appeal contested the claim of deduction u/s.80-IB on Duty Entitlement Pass Book (DEPB). Citing a Supreme Court judgment in Liberty India Vs. CIT, it was held that no deduction can be made u/s.80-IB for DEPB entitlements. This ground was allowed.

Relief for ad-film expenses:
The appeal challenged the relief granted for expenses of &8377; 84,27,270 incurred on ad-film. The Tribunal upheld the relief based on a previous decision in the assessee's favor. Following precedent, the impugned order on this issue was upheld, and the ground failed.

Addition u/s.14A r.w.r. 8D:
The final ground was against the deletion of addition u/s.14A read with rule 8D. Citing a judgment of the Bombay High Court in Godrej & Boyce Limited Vs. ACIT, it was decided that the disallowance under section 14A should be worked out by the Assessing Officer on a reasonable basis, not rule 8D. The matter was restored to the AO for deciding the quantum of disallowance as per the judgment. The appeal was partly allowed for statistical purposes.