2022 (7) TMI 59 - AT - Income Tax

Deduction u/s 80IB - whether freight charges recovered from the customers are eligible for deduction under section 80IB ? - HELD THAT - As Assessee submitted before us the invoices of various parties containing GST number and CST number, on the invoices, in respect of transportation charges, (freight charges received from purchaser). The assessee submitted Form No.10CCB from a Chartered Accountant, balance sheet and profit and loss account - The fresh charges received from purchaser have been shown under the head income from other sources . The assessee also submitted the letter which was submitted before Assessing Officer, showing the details of freight income - The assessee also submitted the details of freight income - Therefore, these facts clearly prove that assessee s claim is genuine and assessee deserves for deduction u/s 80IB As assessee has been claiming deduction under section 80IB of the Act since a long and department has been allowing the claim of the assessee under section 80IB of the Act, in previous years, therefore since the department has allowed the claim of the assessee in previous years, hence the genuineness of the claim should not be doubted. For the current assessment year, the assessee has furnished relevant documents and evidences to fulfill the conditions for claiming deduction under section 80IB of the Act, as noted above, therefore we are of the view that assessee is entitled to claim deduction under section 80IB - Appeal of assessee allowed.

Summary

Issues:
1. Disallowance of deduction u/s 80IB of the Income Tax Act.
2. Charging of interest u/s 234A, 234B, 234C, and 234D of the Income Tax Act.

Analysis:
1. The appeal pertains to the assessment year 2006-07 and challenges the order passed by the Commissioner of Income Tax (Appeals) regarding the disallowance of deduction u/s 80IB of the Income Tax Act. The assessee, a family trust engaged in manufacturing corrugated boxes, claimed a deduction of Rs. 11,32,507 under section 80IB. However, the Assessing Officer disallowed this deduction during the assessment proceedings under section 143(3) of the Act, stating that the exact sub-section was not mentioned, and Form No.10CCB was not submitted. The Commissioner partially allowed the deduction but restricted the addition to Rs. 23,500. The Tribunal remanded the matter to the Assessing Officer for fresh consideration, directing the assessee to provide necessary details to support the claim. Subsequently, the Assessing Officer disallowed the deduction, leading to an appeal before the Tribunal. The Tribunal, after reviewing the submissions and evidence, allowed the deduction of Rs. 11,09,007, emphasizing the genuineness of the claim and the fulfillment of conditions for the deduction.

2. The second issue concerns the charging of interest u/s 234A, 234B, 234C, and 234D of the Income Tax Act. The Assessing Officer rejected the assessee's contentions regarding the treatment of freight charges as profit from industrial undertaking, resulting in the disallowance of Rs. 11,09,007. The Commissioner upheld this decision, prompting the assessee to appeal. During the proceedings, the assessee presented relevant invoices, Form No.10CCB, and other evidence to support their claim. The Tribunal, after considering the submissions and documents, found the claim to be genuine and allowed the deduction under section 80IB of the Act. As a result, the appeal of the assessee was allowed, and the Assessing Officer was directed to permit the deduction of Rs. 11,09,007.

In conclusion, the Tribunal's judgment favored the assessee by allowing the deduction under section 80IB of the Income Tax Act, emphasizing the genuineness of the claim and the fulfillment of conditions. The Tribunal's decision highlights the importance of providing necessary details and evidence to support deductions claimed under the Act.