2016 (7) TMI 188 - AT - Income Tax

Disallowance u/s 80IC - Held that - The objections of the Assessing Officer that the new business is by transfer of earlier business and no production has been actually made by the assessee are contrary to the record. Hence, we do not see any reason to interfere with the order of the ld. CIT(A) and the same is hereby upheld. Thus, the ground raised by the Revenue is rejected. - Decided in favour of assessee.

Summary

Issues:
1. Disallowance of deduction claimed under section 80IC of the Income Tax Act.
2. Admission of additional evidences during appellate proceedings.
3. Upholding the order of the Assessing Officer by the Commissioner of Income-tax (Appeals).

Analysis:

Issue 1: Disallowance of deduction claimed under section 80IC:
The Revenue appealed against the deletion of disallowance of a deduction claimed under section 80IC of the Income Tax Act. The Assessing Officer rejected the claim, alleging that the assessee did not meet the requirements of the law for claiming the deduction. The Revenue argued that the assessee's actions indicated a transfer of existing business to a new one, making them ineligible for the deduction. However, the assessee contended that all legal requirements were fulfilled, and the claim was disallowed based on presumptions. The Commissioner of Income-tax (Appeals) allowed the claim after considering detailed submissions and evidence provided by the assessee. The Tribunal upheld the Commissioner's decision, stating that the Revenue failed to provide contrary evidence to challenge the appellate findings, concluding that the disallowance was unjustified.

Issue 2: Admission of additional evidences during appellate proceedings:
The Revenue also raised concerns about the admission of additional evidences during the appellate proceedings, alleging a violation of Rule-46A of the Income Tax Rules. However, the judgment did not delve into this issue further, focusing primarily on the substantive matter of the disallowance under section 80IC.

Issue 3: Upholding the order of the Assessing Officer:
The Revenue contended that the Commissioner of Income-tax (Appeals) should have upheld the Assessing Officer's order. The Tribunal, after examining the facts and submissions, found that the Assessing Officer's conclusions were based on presumptions and lacked factual support. The Commissioner, on the other hand, provided a detailed analysis of the establishment of the new unit by the assessee, meeting all conditions for claiming the deduction under section 80IC. As the Revenue failed to present contrary evidence, the Tribunal upheld the Commissioner's decision, rejecting the Revenue's appeal and dismissing it.

In conclusion, the Tribunal dismissed the Revenue's appeal, upholding the Commissioner's decision to allow the deduction claimed under section 80IC of the Income Tax Act for the Assessment Year 2008-09. The judgment highlighted the importance of factual evidence in tax assessments and emphasized the need for meeting legal requirements to claim deductions successfully.