2019 (5) TMI 1729 - AT - Income Tax

Revision u/s 263 - deduction u/s.80IB - HELD THAT - There were no justification of Learned Pr.CIT to hold that assessee has claimed more than ordinary profit as exempt while making claim of deduction u/s.80IB(10) of the Income Tax Act. The supplementary partnership deed is already part of the record of the Revenue in preceding assessment years, therefore, there is no need to file copy of the same again and again in each year. Thus, the Assessing Officer correctly examined the issue in the light of the material available on record and in the light of judgment in ALIDHRA TAXSPIN ENGINEERS 1 2017 (5) TMI 1684 - GUJARAT HIGH COURT . This issue is therefore decided in favour of the assessee. Claim of deduction made u/s.80IB the assessee has explained that copy of Form No.10CCB was filed online along with complete details - HELD THAT - In the present case, the Assessing Officer has taken one of the view possible based on facts and material available on record. The Learned Pr.CIT should not have taken a different view against the assessee. Unless the view taken by the Assessing Officer is unsustainable in Law. We rely upon the judgment of the Supreme Court in the case of CIT Vs. Max India Ltd. 2007 (11) TMI 12 - SUPREME COURT In the present case, all the records of the construction of the project were available to the Assessing Officer not only in assessment year under appeal but in preceding assessment years as well. Therefore, while framing the assessment, the Assessing Officer had access to all the records of the assessee and when Assessing Officer after perusing the record passed the assessment order in favour of the assessee granting deduction u/s.80IB of the Act, the same could not be treated as erroneous and prejudicial to the interest of the Revenue. It is well settled law that principle of consistency apply to the Income Tax proceedings. Therefore, on same set of facts, the Learned Pr.CIT should not have taken a different view in the matter. We, therefore do not find any error in the assessment order so as to revise u/s.263 of the Income Tax Act. There were no justification for Learned Pr.CIT to invoke to jurisdiction u/s.263, we accordingly set-aside the order u/s.263 of the Income Tax Act and restore the order of the Assessing Officer u/s.143(3) dated 18.03.2016. Appeal of the assessee is allowed.

Summary

Issues:
1. Assessment order u/s.263 of the Income Tax Act for assessment year 2013-14.
2. Eligibility for deduction u/s.80IB of the Income Tax Act.
3. Disallowance of interest expenses and violation of sections 80IB(13) and 80IA(10).
4. Exceeding maximum limit for deduction u/s.80IB.
5. Correctness of assessment order and jurisdiction u/s.263.

Analysis:

1. The appeal was against the order of the Principal Commissioner of Income Tax-I, Surat for the assessment year 2013-14 u/s.263 of the Income Tax Act. The assessee firm had filed its return showing total income and claimed deduction u/s.80IB. The Principal Commissioner found errors in the assessment order, leading to a show cause notice being issued to the assessee.

2. The reply from the assessee explained that the partnership deed did not provide for payment of interest on partner's capital, citing relevant judgments. The assessee argued that the issue was covered by previous court decisions and that the department did not challenge those decisions in the Supreme Court. The assessee requested the proceedings to be dropped.

3. The Principal Commissioner noted the lack of details/evidence regarding eligibility for deduction u/s.80IB and interest/remuneration payments. It was observed that the assessee did not provide necessary documents to support the deduction claim. Additionally, a flat sale exceeded the maximum limit for deduction u/s.80IB, leading to the assessment order being deemed erroneous and prejudicial to revenue.

4. The counsel for the assessee reiterated that all required details were submitted online and that the partnership deed explicitly stated no interest would be paid on partner's capital. Previous assessment years' acceptance of similar claims and relevant court judgments were highlighted to support the assessee's position.

5. The Tribunal considered the submissions and material on record, emphasizing the consistency in previous assessment approvals and court decisions. It was concluded that the Assessing Officer correctly examined the issues based on available records and relevant judgments. The order u/s.263 was set aside, restoring the original assessment order u/s.143(3) dated 18.03.2016. The principle of consistency in income tax proceedings was highlighted as justification for the decision in favor of the assessee.

This detailed analysis covers the issues raised in the legal judgment, providing a comprehensive overview of the arguments presented and the Tribunal's decision in each aspect of the case.