2010 (2) TMI 1314 - AT - Income Tax

Summary

Issues involved: Appeal against deduction u/s.80IA of the Income Tax Act, 1961.

Issue 1: Justification of deduction u/s.80IA

The appeal raised the issue of justification in allowing deduction u/s.80IA of the Income Tax Act, 1961, based on a previous order of the ITAT Mumbai. The department had not accepted the referred order and had appealed to the High Court, Mumbai against the same.

Details: The Assessing Officer denied the deduction u/s.80IA to the assessee, considering them solely as a contractor in a water supply project, not engaged in infrastructure development. The CIT(A), however, reversed this decision, citing the decision of a Larger Bench in a similar case. The Tribunal, following the precedent, set aside the CIT(A)'s order and reinstated the Assessing Officer's decision, denying the deduction u/s.80IA.

Key Takeaways:
- The issue was decided based on the nature of the assessee's work and their eligibility for the deduction u/s.80IA.
- Precedents and decisions from higher authorities played a crucial role in determining the outcome of the appeal.
- The Tribunal's decision aligned with the interpretation of the law and previous judgments, leading to the denial of the deduction in this case.