2016 (4) TMI 475 - AT - Income Tax

Deduction u.s 80IC - Held that - Merely because the industrial undertaking earned higher profits does not call for an inference that claim of deduction is to be wily nily reduced on presumption. The Tribunal also held that the provisions of section 80IC of the Income-tax Act, 1961 have been introduced by Legislature to promote the industrial activity and their profitability.Therefore, it is vividly clear from the above that the issue stands covered in favour of the assessee

Summary

Issues:
Allowance of deduction u/s 80IC of the Income-tax Act, 1961 on market brand value, market value of services, and profit attributable to branches.

Analysis:
The appeal pertains to the allowance of deduction u/s 80IC for A.Y. 2007-08. The Tribunal noted that the issue was previously decided in favor of the assessee for A.Y. 2008-09. The ld. CIT(A) allowed the appeal based on specific reasoning. The AO's contention that expenses were not accounted for in the eligible unit was refuted. It was highlighted that the law does not restrict all activities to be carried out exclusively from the notified area. The Tribunal emphasized that the provisions of section 80IC aim to promote industrial activity and profitability. The Tribunal also referenced a judgment supporting the deduction claim.

The Tribunal carefully analyzed the findings of the ld. CIT(A) and the previous Tribunal order. It was established that the issue was conclusively settled in favor of the assessee by the Tribunal and the High Court. The Tribunal reiterated that higher profits from the industrial undertaking do not automatically reduce the deduction claim. The legislative intent behind section 80IC was underscored to promote industrial activity and profitability. The Tribunal upheld the decisions of the lower authorities and dismissed the Revenue's appeal.

In conclusion, the Tribunal confirmed the impugned finding of the ld. CIT(A) and dismissed the Revenue's appeal, as the issue was decisively settled in favor of the assessee by previous Tribunal and High Court decisions. The order was pronounced on 11.03.2016.