2017 (4) TMI 523 - AT - Income Tax

Eligible for deduction u/s. 80IA - whether computing provisions of sub-section (5) of Section 80IA would apply to the years earlier than A.Y. 2009-10 or not? - Held that - Section 80IA which has been substituted w.e.f. 1.04.2000 provides that where the GTI of an assessee includes any profits and gains derived by an undertaking from any eligible business referred to in sub-section (4), there shall, in accordance with and subject to the provisions of this section, be allowed in computing the total income, a deduction of an amount equal to 100% of the profits and gains derived from such business for ten consecutive years. Substituted sub-section (2) of Section 80IA provides that an option is given to the assessee for claiming any ten consecutive assessment years out of fifteen years beginning from the year in which the undertaking or the enterprise develops and begins to operate. The fifteen years is the outer limit within which the assessee can choose the period of claiming the deduction. The initial assessment year in the case of the assessee in A.Y. 2009-10, when the claim of deduction u/s. 80IA was made for the first time, and the current A.Y. 2010-11 is the second year of the assessee s claim u/s.80IA. Therefore, we are of the considered opinion the assessee is eligible for deduction u/s. 80IA as claimed, therefore, the Ld. CIT(A) has deleted the addition which does not need any interference on our part. See Satbhav Engineering Ltd 2014 (1) TMI 233 - ITAT AHMEDABAD - Decided in favour of assessee

Summary

Issues:
1. Interpretation of initial assessment year for claiming deduction under section 80IA(5).
2. Eligibility of deduction under section 80IA for the assessment year 2010-11.
3. Application of provisions of section 40(ia) regarding TDS deduction.
4. Admissibility of deductions claimed by the assessee.

Analysis:

Issue 1: Interpretation of initial assessment year for claiming deduction under section 80IA(5)
The case involved a dispute regarding the interpretation of the initial assessment year for claiming deduction under section 80IA(5). The Assessing Officer rejected the assessee's claim based on specific provisions of section 80-IA(5) and relied on a judgment of the Apex Court. However, the Ld. CIT(A) allowed the deduction by considering the judgment of Hon'ble ITAT, Ahmedabad, which referred to the order of the Hon'ble Madras High Court. The Ld. CIT(A) concluded that the appellant was eligible for deduction under section 80IA as claimed, based on the interpretation of the initial assessment year and the provisions of subsection (5) of Section 80IA. The Tribunal upheld the decision of the Ld. CIT(A) and dismissed the grounds raised by the Revenue.

Issue 2: Eligibility of deduction under section 80IA for the assessment year 2010-11
The Assessing Officer made additions to the taxable income of the assessee, including disallowance under section 40(ia) for not deducting TDS. The Ld. CIT(A) deleted these additions and allowed the appeal of the assessee. The Tribunal, after considering the submissions and records, found that the Ld. CIT(A) had elaborately discussed and adjudicated the issues, ultimately deciding in favor of the assessee. The Tribunal upheld the decision of the Ld. CIT(A) to delete the additions, thereby confirming the eligibility of the assessee for deduction under section 80IA for the assessment year 2010-11.

Issue 3: Application of provisions of section 40(ia) regarding TDS deduction
The Assessing Officer added an amount under section 40(ia) for non-deduction of TDS while making payments. However, the Ld. CIT(A) reversed this addition, leading to the deletion of the said amount from the taxable income of the assessee. The Tribunal concurred with the decision of the Ld. CIT(A) and dismissed the appeal filed by the Revenue, thereby upholding the deletion of the addition made under section 40(ia).

Issue 4: Admissibility of deductions claimed by the assessee
The case also involved a review of the deductions claimed by the assessee, particularly under section 80IA of the Income Tax Act. The Assessing Officer had disallowed the deduction claimed by the assessee, but the Ld. CIT(A) allowed the deduction after considering the submissions and relevant legal precedents. The Tribunal, after examining the findings of the Ld. CIT(A) and the legal interpretations provided, upheld the decision to allow the deductions claimed by the assessee, leading to the dismissal of the Revenue's appeal.

In conclusion, the Tribunal affirmed the decisions of the Ld. CIT(A) regarding the eligibility of deductions under section 80IA, the application of section 40(ia) provisions, and the overall admissibility of deductions claimed by the assessee for the assessment year 2010-11.