2016 (9) TMI 203 - AT - Income Tax

Deduction u/s 80IC - Held that - As for the year under consideration the assessee is eligible for claim of deduction under section 80IC of the Act at the rate of 100% in view of substantial expansion made in assessment year 2008-09.

Summary

Issues Involved:
1. Deduction under section 80IC for a return filed after the due date under section 139(5).
2. Acceptance of additional evidence under Rule 46A without giving the Assessing Officer (AO) an opportunity to represent the revenue’s view.

Issue-wise Detailed Analysis:

1. Deduction under Section 80IC for a Return Filed After the Due Date under Section 139(5):

The primary contention was whether the assessee was entitled to a 100% deduction under section 80IC of the Income Tax Act for the assessment year 2009-10, despite filing the revised return after the due date specified under section 139(5). The AO had disallowed the claim, arguing that the revised return was invalid. However, the Commissioner of Income Tax (Appeals) [CIT(A)] allowed the deduction, leading to the Revenue's appeal.

The Tribunal noted that the assessee had made substantial expansion in the fifth year of operation (assessment year 2008-09), entitling it to a 100% deduction for five years from that year. This was consistent with the provisions of section 80IC(3). The CIT(A) verified the facts and confirmed the substantial expansion, noting that the total value of plant and machinery before depreciation was ?1,80,36,875/- and the new machinery purchased during the financial year 2007-08 was ?1,14,42,802/-, exceeding 50% of the existing value, thus qualifying as substantial expansion.

The Tribunal upheld the CIT(A)’s decision, emphasizing the consistency in the Department's acceptance of the 100% deduction in subsequent years. The Tribunal also referenced multiple judicial precedents, including the case of Meetu Jain Vs. JCIT, which supported the claim of 100% deduction following substantial expansion.

2. Acceptance of Additional Evidence under Rule 46A without Giving the AO an Opportunity:

The Revenue argued that the CIT(A) accepted additional evidence under Rule 46A without providing the AO an opportunity to present the revenue’s view. However, during the hearing, the Senior Departmental Representative failed to identify any specific documents or evidence accepted under Rule 46A. The Tribunal found no mention of additional evidence in the CIT(A)’s order, thus dismissing this ground of appeal.

General Grounds:

The Tribunal dismissed the general grounds (grounds No. 3 to 5) as they were not required for adjudication.

Conclusion:

The Tribunal dismissed the Revenue's appeal, affirming the CIT(A)’s order that allowed the assessee a 100% deduction under section 80IC despite the revised return being filed after the due date. The Tribunal also found no contravention of Rule 46A, as no additional evidence was accepted without giving the AO an opportunity to respond. The decision was pronounced in the open court on 29th July 2016.