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2022 (5) TMI 1221 - AT - Income TaxDeduction u/s 80IB - Claim allowed for initial initial year - Whether once the deduction is allowed in the initial year then the revenue cannot deny the same in the subsequent years? - HELD THAT - We note that that the appeal of the assessee has been allowed by ld CIT(A) by holding that Act on the ground that deduction was allowed in the initial year i.e. AY 2003-04 after carrying due verification and enquiry and similar deduction was allowed in AY 2004-05 2005-06. CIT(A) has also recorded a finding a fact that deduction allowed in AY 2003-04, 2004-05 and 2005-06 have not been disturbed and therefore the deduction claimed in the subsequent year cannot be rejected by following the ratio as laid down in decisions of various by various High Courts namely Paul Brothers 1992 (10) TMI 5 - BOMBAY HIGH COURT Simple Food Product Pvt. Ltd. 2017 (8) TMI 646 - BOMBAY HIGH COURT as discussed in the appellate order. Accordingly we are inclined to uphold the same by dismissed the appeal of the revenue.
Issues:
Appeal against CIT(A)'s order allowing deduction u/s 80IB of the Income Tax Act for the assessment year 2011-12. Analysis: The appeal was filed by the revenue challenging the CIT(A)'s decision to allow the deduction u/s 80IB of the Income Tax Act for the assessment year 2011-12. The revenue contended that the project in question was not eligible for the deduction. The assessee, engaged in real estate development, claimed the deduction for its project named Binayak Enclave. The AO rejected the claim citing previous rejections in AY 2012-13, 2013-14, and 2014-15. However, the CIT(A) allowed the appeal, noting that the deduction was previously allowed in AY 2003-04 after verification and enquiry, and in subsequent years as well. During the appellate proceedings, the CIT(A) referred to previous decisions and held that once a deduction is allowed in the initial year, the revenue cannot deny the same in subsequent years. The CIT(A) mentioned cases such as Paul Brothers, Simple Food Product Pvt. Ltd., and Dinshaw Frozen Food Ltd. to support the decision. The CIT(A) emphasized that since the deductions in AY 2003-04, 2004-05, and 2005-06 were not disturbed, rejecting the deduction claimed in the subsequent year would not be justified. After considering the arguments and reviewing the CIT(A)'s order, the ITAT Kolkata upheld the decision to allow the deduction. The ITAT noted that the deduction was allowed in the initial years after due verification, and the same deduction was permitted in subsequent years as well. Citing the decisions of various High Courts, the ITAT dismissed the revenue's appeal, affirming the CIT(A)'s ruling. Consequently, the appeal of the revenue was dismissed, and the order was pronounced on 13th May 2022.
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