2014 (12) TMI 932 - HC - Income Tax

Deduction u/s 80IA - Whether the Tribunal was right in holding that the deduction u/s 801A, if not claimed in the initial year, can be claimed in the subsequent years when the conditions therein are fulfilled Held that - In Commissioner Of Income-Tax Versus Seeyan Plywoods 1991 (2) TMI 89 - KERALA High Court it has been held that if the assessee does not satisfy the conditions in the initial year and if he satisfies the conditions in subsequent years, then the benefit must be given from the year in which it satisfies the conditions and as per section 80I the assessee is entitled for deduction only for 10 years and not more than that - the Tribunal was rightly of the view that the assessee has satisfied all the conditions in order to avail benefit of Section 80IA the order of the Tribunal is upheld Decided against revenue.

Summary

Issues:
Challenging common order of ITAT, deduction under Section 80I of Income Tax Act, 1961, substantial question of law regarding deduction under Section 80IA.

Analysis:
The judgment pertains to multiple appeals arising from a common order of the Income Tax Appellate Tribunal (ITAT). The appellant-revenue challenged the ITAT's order dated 28.02.2006, where the appeals filed by the revenue were dismissed. The facts and legal questions in all appeals were similar, so the court discussed the facts of one appeal for convenience. The respondent-assessee, engaged in forging and manufacturing auto parts, claimed deduction under Section 80I for the Assessment Year 2001-02. The Assessing Officer rejected the claim, leading to appeals before the Commissioner of Income Tax and subsequently before the ITAT.

The substantial question of law formulated by the Court was whether deduction under Section 80IA, if not claimed initially, can be claimed in subsequent years upon fulfilling the conditions. The appellant-revenue contended that the ITAT erred in allowing the claim, arguing that the material on record was not properly considered. Conversely, the respondent-assessee's advocate supported the ITAT's decision, stating that there was no need for interference given the concurrent findings of the CIT(A) and the ITAT.

The ITAT, in its observations, considered the value of old and new machinery over specific assessment years and cited relevant judicial pronouncements to support its decision. It noted that the assessee had fulfilled the conditions for claiming deduction under Section 80IA in subsequent years, entitling them to the benefit. The Court found the ITAT's reasoning cogent and agreed that the assessee had met all conditions for availing the deduction under Section 80IA.

Ultimately, the Court dismissed the appeals, finding no error in the ITAT's order. It held that the ITAT's conclusion was justified, and the appellant-revenue failed to demonstrate any legal or factual flaws in the ITAT's findings. Consequently, the question of law was answered in favor of the assessee and against the revenue.