2022 (12) TMI 1125 - AT - Income Tax

Assessment u/s 153A - disallowance of deduction u/s 80IC - HELD THAT - We note that the assessment was framed u/s notice u/s 153A of the Act. In the assessment order, no specific reason has been given by the Assessing Officer for making disallowance. He has not pointed out the defect if any noted in the books of accounts of the assessee warranting the said disallowance. In our considered opinion, CIT(A) has taken a correct view of that matter. Without pointing out any shortcoming in the claim of the assessee in terms of section 80IC of the Act, no disallowance is sustainable. More so when the AO himself noted that the assessee has furnished complete details and no defect has been pointed out. In this view of the matter, in our considered opinion, there is no infirmity in the order of the Ld. CIT(A), hence, we uphold the same. Whether addition has been made de-hors incriminating material found during search ? - The assessee had also relied upon Hon ble jurisdictional High Court decision in the case of Kabul Chawla 2015 (9) TMI 80 - DELHI HIGH COURT CIT(A) has dismissed this ground of the assessee. We find that the same is only of academic interest. As, we have upheld the Ld. CIT(A) s order on merits and the Revenue s appeals are liable to be dismissed. Accordingly, the Cross Objections of the assessee are also dismissed as infructuous.

Summary

Issues:
Appeal by Revenue and Cross objections by Assessee regarding disallowance of claim under section 80IC of the Income Tax Act, 1961 for Assessment Years 2011-12 to 2015-16.

Analysis:
1. The Revenue appealed against the deletion of disallowance under section 80IC by the Ld. CIT(A). The primary contention was that the assessee did not provide details to support the claim, thus the deduction could not be allowed. The Assessing Officer disallowed the deduction as the assessee failed to explain the claimed amount. However, the Ld. CIT(A) ruled in favor of the assessee, highlighting that the Assessing Officer did not specifically request details during the assessment proceedings and the claim was supported by audit reports and financial statements. The Ld. CIT(A) emphasized that no defects were pointed out in the financial statements, and the deduction had been allowed in previous assessments.

2. The Revenue's appeal was based on the assessment framed under section 153A of the Act. The Assessing Officer did not provide specific reasons for disallowance and did not identify any defects in the assessee's accounts. The ITAT upheld the Ld. CIT(A)'s decision, stating that without pinpointing shortcomings in the claim under section 80IC and considering that complete details were furnished without defects, the disallowance was not justified. The ITAT found no fault in the Ld. CIT(A)'s order and upheld it.

3. The assessee filed Cross Objections challenging the addition made without any incriminating material found during the search. Citing a High Court decision, the assessee contended that the addition was unjustified. The Ld. CIT(A) dismissed this ground, deeming it of academic interest. Since the ITAT upheld the Ld. CIT(A)'s order on merits, the Cross Objections were deemed infructuous and dismissed.

4. The ITAT's decision applied to all the Assessment Years under appeal, resulting in the dismissal of all Revenue appeals and Assessee Cross Objections. The judgment was pronounced on December 23, 2022, upholding the Ld. CIT(A)'s order and dismissing all appeals and objections.