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2018 (2) TMI 1704 - AT - Income TaxEligibility to deduction u/s 80IB - Vishesh Krishi Upaj Yojana and Drawback Duty - Held that - In the case in hand, the assessee was not denied the eligibility of deduction u/s 80IB but only a particular receipts/income has been held as not eligible for deduction u/s 80IB on the ground that it is not an income derived by the industrial undertaking. A particular receipt which is found to be not income/profit derived from the business of the eligible undertaking has to be excluded for the purpose of computing the deduction u/s 80IB. The case of the assessee does not fall in the category where the AO has accepted the business of the assessee undertaking as eligible for deduction u/s 80IB in the initial year but has taken a difference stands in the subsequent years. A year before us is not the first year in which the claim of the assessee u/s 80IB in respect of Vishesh Krishi Upaj Yojana and Drawback Duty has been denied but this was denied in the earlier years and for the Assessment Year 2008-09, the matter has been carried to the Hon ble Jurisdictional High Court but the assessee could not succeed. - Decided against assessee.
Issues Involved:
1. Validity of the impugned order of the Ld. CIT(A). 2. Deduction u/s 80IB on Vishesh Krishi Upaj Yojana and Drawback Duty. 3. Consistency in allowing deductions in subsequent years. Issue-wise Detailed Analysis: 1. Validity of the Impugned Order of the Ld. CIT(A): The assessee contended that the order passed by the Ld. CIT(A) was illegal, as it did not discuss the decisions relied upon by the assessee, such as the case of Topman Exports vs. CIT and the decision of the Bombay High Court in the case of Art and Craft Export. The assessee argued that non-adjudication of grounds raised renders the order illegal, citing the Jurisdictional High Court's decision in CIT Vs. Ramesh Chand Modi. The Tribunal acknowledged that while the CIT(A) should consider all decisions and arguments, the CIT(A) was bound to follow the decision of the Hon’ble Jurisdictional High Court in the assessee’s own case, which had already decided the issue against the assessee. Hence, the CIT(A) was not required to discuss each contention but to follow the binding precedent. The Tribunal found no merit in the grounds challenging the validity of the CIT(A)’s order. 2. Deduction u/s 80IB on Vishesh Krishi Upaj Yojana and Drawback Duty: The AO disallowed the deduction u/s 80IB on Vishesh Krishi Upaj Yojana and Drawback Duty, citing the Supreme Court's decision in Liberty India Vs. CIT. The assessee argued that the decision in Topman Exports vs. CIT should be followed, and that deductions allowed in earlier years should be consistently allowed in subsequent years. The CIT(A) upheld the AO’s decision, following the Supreme Court's ruling in Liberty India and the Jurisdictional High Court’s decision in the assessee’s own case for AY 2008-09. The Tribunal affirmed that the CIT(A) correctly followed the binding precedent, and the assessee’s contentions based on Topman Exports were not applicable as that decision pertained to section 80HHC, not 80IB. 3. Consistency in Allowing Deductions in Subsequent Years: The assessee argued that deductions allowed in the initial year cannot be denied in subsequent years without disturbing the earlier year’s order. The Tribunal clarified that the issue was not about the eligibility of deduction u/s 80IB but about specific receipts (Vishesh Krishi Upaj Yojana and Drawback Duty) not being eligible for deduction as they were not derived from the industrial undertaking. The Tribunal noted that this issue had been consistently decided against the assessee in earlier years, including by the Jurisdictional High Court. Thus, the AO’s denial of deduction on these receipts in subsequent years was justified. Conclusion: The Tribunal dismissed the appeals, emphasizing that the CIT(A) was correct in following the binding precedent set by the Jurisdictional High Court and the Supreme Court. The Tribunal also noted that the assessee’s approach seemed more focused on criticizing the impugned order rather than addressing the merits of the issue. Consequently, the appeals were dismissed with a cost imposed on the assessee for misusing the process of law.
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