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2021 (11) TMI 263 - AT - Income TaxDisallowance of deduction u/s 80IC - rule of consistency - Whether CIT(A) was correct in deleting the addition made by the AO on account of disallowance of deduction u/s 80IC of the I.T. Act on the basis of deduction allowed in earlier years as per the directions of the Hon ble ITAT on a single issue ignoring other issues which were also attributable to the said disallowance? - HELD THAT - As it appears that the claim of deduction has been denied from A.Ys 2007-08 to 2010-11 and pursuant to the directions of the Tribunal, the Assessing Officer allowed the claim of deduction. Since the Assessing Officer had allowed the deduction pursuant to the directions of this Tribunal from A.Ys 2007-08 to 2010-11, the ld. CIT(A) allowed the claim of deduction following the earlier orders. In our considered opinion, if the deduction has been allowed in earlier years on the same set of facts and on similar claim the Assessing Officer cannot take a fresh view. We, therefore, do not find any error or infirmity in the findings of the ld. CIT(A). - Decided against revenue.
Issues Involved:
Allowability of deduction u/s 80IC of the Income Tax Act for Assessment Year 2011-12. Analysis: The appeal by the Revenue challenged the order of the Commissioner of Income Tax [Appeals] regarding the deletion of an addition made by the Assessing Officer on account of disallowance of deduction u/s 80IC of the Income Tax Act. The Revenue raised three main grievances questioning the deletion of the addition. Firstly, they contested the deletion of the addition based on the deduction allowed in earlier years as per the directions of the ITAT, focusing on a single issue while ignoring other related issues. Secondly, they disputed the deletion of the addition by asserting that the unit was engaged in assembling only, which they argued did not qualify as manufacturing or production. Lastly, they objected to the deletion of the addition by highlighting that the value of plant and machinery did not align with the production output from the unit. The Tribunal noted that the deduction u/s 80IC had been allowed in previous assessment years, and the CIT(A) had followed the orders of those years. The primary issue in this appeal revolved around the allowability of deduction u/s 80IC of the Income Tax Act. It was observed that the current assessment year was the fifth year of the claim for deduction u/s 80IC, indicating that the claim had been allowed from previous assessment years. The Assessing Officer had initially denied the claim for deduction in those years, but following the directions of the Tribunal, the claim was eventually allowed. Consequently, the CIT(A) allowed the deduction in the present assessment year in line with the earlier orders. The Tribunal opined that when deduction had been allowed in previous years based on the same facts and similar claims, the Assessing Officer could not take a fresh view on the matter. Therefore, they found no error or flaw in the CIT(A)'s decision to allow the deduction following the precedent set by earlier orders. As a result, the appeal filed by the Revenue was dismissed, affirming the decision of the CIT(A) regarding the allowability of deduction u/s 80IC for the Assessment Year 2011-12. In conclusion, the Tribunal upheld the order of the CIT(A) and dismissed the Revenue's appeal, emphasizing the importance of consistency in allowing deductions based on past decisions and factual circumstances. The judgment highlighted the significance of adhering to established precedents and not revisiting settled matters unless there are substantial grounds to warrant a fresh examination.
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