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2017 (4) TMI 659 - AT - Income TaxClaim of deduction under section 80IC - Held that - Claim of deduction under section 80IC has been allowed by Assessing Officer in the preceding Assessment Years i.e. 2007-08 and 2008-09. So, this is a case where Assessing Officer has not followed rule of consistency. In view of the above discussion and putting reliance on the Tribunal decision in assessee s own case for Assessment Year 2009-10 as discussed above, it was rightly held that assessee is eligible for deduction under section 80IC for its Paonta Sahib Unit, Himachal Pradesh. Hence, the in view of the above discussion, grounds of appeal were rightly allowed in favour of the assessee, which does not need any interference on our part, hence, we uphold the order of the Ld. CIT(A) on the issue in dispute and accordingly, we dismiss the grounds in dispute raised by the Revenue.
Issues Involved:
1. Allowance of deduction under section 80IC of the Income Tax Act by the Ld. CIT(A). 2. Determination of whether the assessee is engaged in manufacturing or assembling activities. Issue 1: Allowance of deduction under section 80IC: The Revenue filed an Appeal against the Ld. CIT(A)'s order allowing deduction under section 80IC of the Act. The Revenue contended that the matter was subjudice as an appeal was pending in the Hon’ble High Court against the ITAT judgment for AY 2009-10. However, the Ld. CIT(A) had allowed the deduction based on the ITAT judgment for AY 2009-10 in the assessee's own case. The Ld. CIT(A) noted that the claim under section 80IC had been allowed in preceding assessment years, indicating inconsistency by the Assessing Officer. The Ld. CIT(A) relied on the ITAT judgment for AY 2009-10 and held that the appellant was eligible for the deduction at the Paonta Sahib Unit. The Tribunal upheld the Ld. CIT(A)'s decision, emphasizing that the High Court had dismissed the Revenue's appeal against the ITAT order for AY 2009-10, citing reasons related to delay and the merits of the case. Consequently, the Tribunal dismissed the Revenue's appeal, affirming the allowance of the deduction under section 80IC. Issue 2: Manufacturing vs. Assembling Activities: The second issue revolved around whether the assessee was engaged in manufacturing or assembling activities. The Assessing Officer had disallowed the claim under section 80IC, arguing that the assessee was involved in assembling and not manufacturing or production activities. However, the Ld. CIT(A) and the Tribunal, based on the ITAT judgment for AY 2009-10, determined that the assessee was indeed engaged in manufacturing of air spring assembly. The ITAT noted that the assessee imported certain components and used local materials in a manufacturing process resulting in a distinct final product. The Tribunal found that the assessee's activities qualified as manufacturing, making them eligible for the deduction under section 80IC. The Tribunal also highlighted the lack of consistency by the Assessing Officer, who had allowed the deduction in preceding assessment years. Therefore, the Tribunal upheld the Ld. CIT(A)'s decision regarding the nature of the assessee's activities and their eligibility for the deduction under section 80IC. In conclusion, the judgment by the Appellate Tribunal ITAT DELHI involved issues related to the allowance of deduction under section 80IC and the classification of the assessee's activities as manufacturing or assembling. The Tribunal upheld the Ld. CIT(A)'s decision, relying on the ITAT judgment for AY 2009-10, and dismissed the Revenue's appeal, affirming the eligibility of the assessee for the deduction under section 80IC based on their manufacturing activities.
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