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2021 (8) TMI 288 - AT - Income TaxDisallowance u/s 80IA(4) - assessee is a contractor not an industrial undertaking or enterprises engaged in infrastructure development - HELD THAT - The issue raised in the grounds of appeal under consideration is squarely covered in favour of the appellant by the decisions of Hon'ble ITAT, Ahmedabad for the various assessment years,hence, in view of the above, facts the addition made by the AO by disallowance u/s 80IA(4) of the Act, is deleted and the grounds of appeals are allowed.
Issues:
1. Disallowance of claim under Section 80IA(4) of the Income Tax Act. 2. Disallowance on account of deduction claimed under Section 80IA of the Act. 3. Interpretation of explanation to Section 80IA introduced by Finance Act 2009. 4. Upholding the order of the assessing officer. Analysis: Issue 1: Disallowance of claim under Section 80IA(4) of the Income Tax Act The appeal by Revenue challenged the deletion of an addition made by the Assessing Officer amounting to ?12,01,82,331 under Section 80IA(4) of the Income Tax Act. The Revenue contended that the assessee, being a contractor and not an industrial undertaking or engaged in infrastructure development, was not eligible for the deduction. However, the Tribunal noted that the Ld. CIT(A) allowed the deduction under Section 80IA by following the decisions of the Tribunal for assessment years 2003-04 to 2011-12. The Tribunal found that the grounds of appeal raised by Revenue were consistently covered by the Tribunal's decisions in earlier years, leading to the dismissal of the appeal. Issue 2: Disallowance on account of deduction claimed under Section 80IA of the Act The Assessing Officer disallowed the claim of deduction under Section 80IA despite previous disallowances in earlier years. The Tribunal observed that similar deductions were ultimately allowed on appeal before the Tribunal. The Revenue intended to file an appeal before the high court against the Tribunal's decision. However, the Ld. CIT(A) granted relief to the assessee by following the Tribunal's orders for previous assessment years. The Tribunal, considering the consistent decisions of the Tribunal for earlier years, found no merit in the Revenue's grounds of appeal and dismissed the appeal. Issue 3: Interpretation of explanation to Section 80IA introduced by Finance Act 2009 The Revenue argued that the Ld. CIT(A) erred in deleting the disallowance made by the Assessing Officer under Section 80IA of the Act, without appreciating the explanation to Section 80IA introduced by the Finance Act 2009. The explanation stated that the section shall not apply to a business in the nature of a work contract awarded by any person and executed by an undertaking or enterprise. However, the Tribunal upheld the decision of the Ld. CIT(A) based on the Tribunal's consistent rulings for previous assessment years. Issue 4: Upholding the order of the assessing officer The Revenue contended that the Ld. CIT(A) should have upheld the order of the assessing officer disallowing the deduction claimed under Section 80IA. However, the Tribunal, after considering the submissions of both parties and the orders of the authorities below, found that the Ld. CIT(A) correctly followed the Tribunal's decisions for various assessment years, leading to the dismissal of the Revenue's appeal. In conclusion, the Tribunal dismissed the appeal by Revenue, upholding the decision of the Ld. CIT(A) to allow the deduction claimed under Section 80IA based on the Tribunal's consistent rulings for earlier years.
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