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2019 (2) TMI 1324 - AT - Income TaxDisallowance of deduction u/s 80IB(8A) - assessee is not independently carrying on scientific research but is a contract researcher - HELD THAT - Claim has to be examined in each of the years and left a note of caution that the view taken therein may not apply to subsequent years, if there are change of facts. However, as seen from the approval granted, there are no change of facts and assessee is found to be eligible for deduction u/s. 80IB. We find the authorities were renewing the certificates after verifying whether the assessee is fulfilling the requisite conditions. CIT (A), therefore, verified that the prescribed authority has renewed the certificate for the A.Y 2012-13 and thereafter considered the ITAT orders to grant relief to the assessee. We find that the facts and circumstances of the case in this A.Y are also the same as in the earlier A.Ys before the ITAT, and the learned DR has not been able to rebut the findings of the CIT (A). In view of the same, the appeal of the Revenue is dismissed.
Issues:
Appeal against order of CIT (A) for A.Y 2012-13 disallowing deduction u/s 80IB(8A) - Whether assessee independently carried out scientific research - Whether approval from prescribed authority sufficient for claiming deduction. Analysis: 1. The Revenue appealed against the CIT (A)'s order for A.Y 2012-13 disallowing deduction u/s 80IB(8A) claimed by the assessee. The AO disallowed the deduction stating that the assessee, engaged in service activities, was not independently carrying out scientific research but acting as a contract researcher. 2. The CIT (A) dismissed the grounds raised by the assessee, leading to the AO disallowing the deduction u/s 80IB(8A) based on the same reasoning. The assessee appealed, relying on previous ITAT decisions in their favor for A.Ys 2008-09 and 2010-11. 3. The ITAT examined whether the assessee fulfilled conditions for claiming deduction u/s 80IB(8A). The ITAT noted that the assessee had approval from the prescribed authority as a research and development company. The ITAT emphasized that the approval and subsequent renewals indicated the authority's satisfaction with the assessee's eligibility for the deduction. 4. The ITAT held that the CIT (A) cannot override the prescribed authority's approval and deny the deduction merely based on lack of evidence. The ITAT emphasized that until the approval was withdrawn, the deduction could not be denied. The ITAT decision was specific to the A.Ys under consideration. 5. The ITAT observed that the decision for A.Ys 2005-06 & 2006-07 was followed for subsequent years based on the renewal of certificates by the prescribed authority. The ITAT upheld the CIT (A)'s order for A.Ys 2009-10, 2010-11, and 2011-12, as there were no changes in facts affecting the assessee's eligibility for deduction u/s 80IB. 6. The ITAT found no change in facts for the A.Y 2012-13 and upheld the CIT (A)'s decision to grant relief to the assessee. The Revenue's appeal was dismissed based on the consistent findings and circumstances across the years. 7. The ITAT concluded that the appeal of the Revenue was dismissed, affirming the order of the CIT (A) for A.Y 2012-13. The decision was pronounced in open court on 20th February 2019.
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