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2020 (10) TMI 144 - AT - Income TaxDeduction u/s.80IA(iv)(a) - Initial Assessment Year - first year opted for by the assessee for claiming deduction u/s.80IA OR year in which the eligible business has commenced - HELD THAT - Pune Bench of the Tribunal in assessee own case for immediately preceding assessment year i.e. A.Y.2011-12 2017 (8) TMI 474 - ITAT PUNE has allowed the deduction to the assessee by observing that the initial assessment year is the year in which the assessee has claimed first time the deduction u/s.80IA of the Act. CBDT Circular itself, gives preference to the assessee to choose a particular year as initial assessment year and in this case the assessee has chosen Assessment year 2010-11. Therefore, the case of the assessee is fortified by the CBDT CircularNo.1/2016 dated 15.02.2016 wherein the CBDT has clarified that the term Initial Assessment Year in Section 80IA (5) of the Act would mean the first year opted for by the assessee for claiming deduction u/s.80IA and not the year in which the eligible business has commenced - decision relied on by the Ld. DR of Special Bench of Tribunal in the case of Goldmine Shares and Finance Pvt. Ltd. 2008 (4) TMI 405 - ITAT AHMEDABAD was much prior to the CBDT Circular. - Decided against revenue. Prior period depreciation on investment in premises disallowed - CIT-A allowed deduction - HELD THAT - Before the Ld. CIT(Appeals) itself, it had been demonstrated by the assessee that in the entire book depreciation it included depreciation on investment in premises for prior period and entire books of account, tax audit report were submitted and were analyzed by the First Appellate Authority - assessee at the time of hearing drew our attention to the Balance Sheet and P L account for the relevant assessment year wherein the entire depreciation and amortization expenses has been claimed And it included prior period deprecation on investment in premises. DR could not refute these facts on record nor could bring any material or evidences to show that the said amount was not included in the said total depreciation taken by the assessee company for taxation purpose. - Decided against revenue.
Issues Involved:
1. Deduction under Section 80IA(iv)(a) of the Income Tax Act, 1961. 2. Allowance of prior period expenses amounting to ?9,84,391. Issue-wise Detailed Analysis: 1. Deduction under Section 80IA(iv)(a) of the Income Tax Act, 1961: The first issue pertains to the deduction claimed under Section 80IA(iv)(a) of the Income Tax Act, 1961. During the assessment proceedings, the Assessing Officer (AO) disallowed the deduction of ?1,77,45,946/- claimed by the assessee under this provision, interpreting the "Initial Assessment Year" as the year in which the eligible business commenced (Assessment Year 2007-08). The assessee argued that the initial assessment year should be the first year opted for claiming the deduction, which in this case was Assessment Year 2010-11. The Commissioner of Income Tax (Appeals) [CIT(A)] supported the assessee's claim, referencing CBDT Circular No.1/2016 dated 15.02.2016, which clarified that the "Initial Assessment Year" means the first year opted by the assessee for claiming the deduction and not the year in which the business commenced. The CIT(A) directed the AO to treat Assessment Year 2010-11 as the initial assessment year and deleted the addition of ?1,77,45,946/-. The Tribunal upheld the CIT(A)'s decision, noting that the Pune Bench of the Tribunal in the preceding assessment year (2011-12) had already allowed the deduction to the assessee. The Tribunal emphasized that the CBDT Circular allows the assessee to choose the initial assessment year and that the AO's reliance on the Special Bench decision in Goldmine Shares and Finance Pvt. Ltd. was prior to the CBDT Circular. Consequently, the Tribunal dismissed the Revenue's appeal on this ground. 2. Allowance of Prior Period Expenses Amounting to ?9,84,391: The second issue relates to the allowance of prior period expenses amounting to ?9,84,391/-. The AO disallowed this amount, which was grouped in the book depreciation of ?5,30,66,886/- in the audited accounts. The assessee contended that the entire book depreciation, including the prior period depreciation, was already added back and disallowed in the statement of total income, resulting in no further disallowance being warranted. The CIT(A) agreed with the assessee, finding that the disallowance was wrongly made by the AO as the prior period depreciation was already included in the total book depreciation and added back in the statement of total income. The CIT(A) deleted the addition of ?9,84,391/-. The Tribunal confirmed the CIT(A)'s decision, noting that the assessee had demonstrated that the prior period depreciation was included in the total depreciation claimed. The Tribunal found no material evidence from the Revenue to refute this fact and thus sustained the relief provided by the CIT(A). The Tribunal dismissed the Revenue's appeal on this ground as well. General Grounds: Grounds No. 3 and 4 were general in nature and did not require adjudication. Conclusion: The Tribunal dismissed the Revenue's appeal, upholding the CIT(A)'s decisions on both issues. The order was pronounced on October 1, 2020.
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