2017 (8) TMI 115 - AT - Income Tax

Deduction u/s 80IB - Held that - For claiming the deduction u/s 80IB of the Act, the assessee has to fulfill the conditions contained in sub-section(2) of the section. These conditions has been enumerated/dealt with by the Ld. Commissioner of Income Tax (Appeal) in the order along with the factum of establishing the factory set-up on Daman. There is uncontroverted finding that new industrial undertaking was formed at Daman by transferring more than 20% of the plant and machinery previously used by the assessee in its industrial premises at Bombay. So far as, the contention of the Revenue that the order of the Tribunal has been challenged before the Hon ble High Court, is concerned, no contrary decision was brought to our notice, therefore, the order of the Tribunal as on date, stands. The assessee setup the industrial undertaking in industrially backward the state, wherein, certain benefits are extended to the assessee. The operation of Mumbai unit continued during the Financial Year-2003-04 at the normal scale. In the new unit, at Daman, new plant and machinery was installed during the first year of operation and further new additions were made during the Financial Year 2004-05. It is also noted that for Assessment Year 2005-06, the order of the CIT (Appeal) was affirmed by the Tribunal and the appeal of the Revenue was dismissed. Against the said order, the miscellaneous application filed before the Tribunal against the said order was also dismissed. Appeal of the Revenue is dismissed

Summary

Issues:
Appeal against deduction u/s 80IB of the Income Tax Act, 1961 for Assessment Year 2005-06 and 2006-07.

Analysis:
The Revenue challenged the deduction u/s 80IB allowed by the Ld. First Appellate Authority for the assessee in the impugned order dated 31/07/2014. The Revenue contended that the deduction was granted without appreciating the provisions of the Act and the claim of earlier years (2005-06 and 2006-07) was also challenged before the High Court. During the hearing, the Department argued that the deduction granted to the assessee for those years had been challenged previously. Despite registered notices, no one appeared for the assessee, and no adjournment petition was filed. The Tribunal considered the submissions of the Department and reviewed the relevant findings recorded by the Ld. Commissioner of Income Tax (Appeal). The Ld. Commissioner had allowed the deduction based on establishing a new industrial undertaking in Daman and fulfilling the conditions of section 80IB. The Tribunal noted that the Mumbai unit continued operations normally, while new plant and machinery were installed at the Daman unit. The Ld. Commissioner had relied on previous decisions and dismissed the appeal of the Revenue due to lack of merit.

The Tribunal emphasized that the assessee had set up an industrial undertaking in an industrially backward state, fulfilling the conditions of section 80IB. The Ld. Commissioner's decision was affirmed by the Tribunal for Assessment Year 2005-06, and the Revenue's appeal was dismissed. The Tribunal found no contrary decision brought to its notice regarding the order challenged before the High Court. The Tribunal upheld the Ld. Commissioner's reliance on previous orders and dismissed the Revenue's appeal, as it lacked merit. The Tribunal concluded that the claimed deduction was rightly allowed, and the appeal of the Revenue was dismissed. The order was pronounced in the presence of the ld. DR on 18/04/2017.