2022 (1) TMI 737 - AT - Income Tax

Deduction u/s 80 IA - HELD THAT - As recorded in the preceding paragraphs, consistently the Tribunal and the Hon ble High Court holding the issue relating to the claim of the assessee under section 80IA of the Act in favour of the assessee and the same stands undisturbed for the assessment year 2010-11 also. In this year also, Ld. CIT(A) granted relief to the assessee by following this consistent view taken in assessee s own case for the earlier assessment years by his predecessor as well as the higher fora, namely, the Tribunal and the Hon ble High Court. Both the authorities below recorded a finding that the facts are similar for this year also as those are for the assessment years 2005-06 to 2011-12. In these circumstances we are of the considered opinion that in the absence of any compelling changed circumstances, the consistent view taken in assessee s own case for the earlier years are not be disturbed. While respectfully following the same, we hold the issue in favour of the assessee and return a finding that the deletion of the disallowance of claim of assessee under section 80IA of the Act by the Ld. CIT(A) is neither illegal nor irregular and the same has to be upheld. Consequently, we dismiss ground No. 1 of Revenue s appeal. Disallowance of the expenses - AR submitted that in view of the fact that the assessee is entitled to claim the deduction under section 80IA of the Act, no adjudication is necessary on this aspect and as rightly observed by the Ld. CIT(A) in his order the assessee would otherwise be exempt under section 80IA (4) (iii) of the Act and therefore, this issue becomes academic. We agree with him and find that no adjudication is necessary on this issue.

Summary

Issues:
1. Deletion of addition made under section 80 IA (4) (iii) of the Income Tax Act, 1961.
2. Deletion of disallowance on account of interest paid being the expenses.

Analysis:
1. The appeal was filed by the Revenue against the order of the Commissioner of Income Tax (Appeals) deleting the addition made under section 80 IA (4) (iii) of the Income Tax Act, 1961, and the disallowance of interest expenses. The Assessing Officer disallowed the claim under section 80 IA and interest paid as expenses. The contention was that interest claimed cannot be attributed to the business as the loan amount was advanced to partners without interest. The Commissioner (Appeals) granted relief to the assessee, stating that the disallowance of interest is not in the interest of Revenue as it would reduce the income of the partners. The Tribunal upheld the Commissioner's decision based on similar findings in previous years and dismissed the Revenue's appeal.

2. The Revenue contended that the Commissioner's decision was contrary to findings in previous years. However, the assessee's representative highlighted that for assessment years 2005-06 to 2011-12, the Tribunal and High Court had ruled in favor of the assessee regarding the deduction under section 80 IA. The Tribunal found the facts similar to previous years and upheld the relief granted by the Commissioner. The Tribunal noted that the consistent view taken in the assessee's case for earlier years should not be disturbed without compelling changed circumstances. The disallowance of expenses was considered academic as the assessee was entitled to claim deduction under section 80 IA.

In conclusion, the Tribunal dismissed the Revenue's appeal, upholding the Commissioner's decision to delete the addition made under section 80 IA (4) (iii) and the disallowance of interest expenses. The Tribunal based its decision on the consistent view taken in the assessee's case for earlier years and found no compelling reasons to disturb the relief granted.