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2022 (7) TMI 1234 - AT - Income TaxDeduction u/s 80IB - higher amount of deduction u/s 80IB while filing the return in response to notice u/s 153A - HELD THAT - In the present case as the claim for deduction was enhanced by the assessee which was on account of calculation mistake as observed by the CIT(A) vide his order at para 7.3 (AY 2006-07) mentioning that The claim was enhanced to Rs. 4,97,80,842/- by the assessee due to arithmetical error in calculating deduction at 25% of the profit of the eligible business. However, Ld AO has not pointed out any mistake in the enhancement claim or has bring out anything contrary to the claim, except only has pointed out the fact that claim has been enhanced. AO has examined the issue in its entirety and has rejected the claim of assessee for deduction under Sec 80IB. Admittedly, it is an undisputed fact that the enhancement of the deduction claimed in return U/s 139(1) which was increased while filing return in response to notice u/s 153A was on account of arithmetical mistake. Therefore, on perusal of various judicial pronouncements as discussed above, we are of the opinion that the assessee is entitled to such enhancement. With respect to eligibility of the assessee to claim deduction u/s 80IB of the Income Tax Act 1961, we find that the issue for our adjudication is now well settled as the same has been decided in favour of the assessee by the Co ordinate Bench of the Tribunal, Nagpur Bench, in assessee s own case 2015 (11) TMI 1872 - ITAT NAGPUR allowing the appeals of assessee and dismissed the Revenue s appeal there by allowing the claim made by the assessee under section 80IB. Thus respectfully following the order of the Tribunal rendered in assessee s own case for the assessment year cited supra, we have no hesitation in upholding the order passed by the learned CIT(A) by dismissing these grounds raised by the Revenue in its. Disallowance of additional depreciation on windmill - whether or not the CIT(A) was correct in granting relief under section 32(1)(iia) of the Act when the same is prospective effective from 1st April 2013 - HELD THAT - We find that the issue of claim of additional depreciation is covered by the Co ordinate Bench decision rendered in assessee s own case and decision of the Hon ble Bombay High court assessee s sister concern s case in M/s. R.B. Seth, Shriram Narsingdas 2017 (8) TMI 611 - BOMBAY HIGH COURT wherein the issue has been decided in favour of the assessee and against the Revenue. The facts and circumstances being identical, we uphold the order of the learned CIT(A) by dismissing these ground raised by the Revenue in its appeals. Penalty for overloading of trucks by treating it as compound fee - HELD THAT - The amount paid to RTO is in the nature of compounding fee, which is necessary for smooth functioning of the business of the assessee and, therefore, the deduction is allowable. After considering the facts of the case and various judicial pronouncements relied upon by the learned Counsel for the assessee, we are of the view that the disallowance made by the AO is not in accordance with law. Consequently, we do not find any reason to interfere with the order of the CIT (A) on this ground, which we uphold the order of CIT(A). Addition of cash paid for interior works - HELD THAT - This issue was not explained by the assessee during the assessment proceedings before the AO, however ground raised for this disallowance was duly defended by the assessee to the CIT(A) during the appellate proceedings and Ld CIT(A) has discussed the same and decided the same according to the facts of the case. CIT(A) has examined the facts and concluded that Thus I find that the total bill amount mentioned in the seized document has been paid to M/s Wishmaya by account payee cheque and duly accounted in books. After this observation of the Ld CIT(A), which is sustainable, there is no scope for any further adjudication on the issue, we therefore do not see any modification necessary in the verdict of the Ld CIT(A) and accordingly refrain ourselves to interfere with this issue. Therefore this ground of the revenue is dismissed. Income from house property - CIT-A deleted the addition - HELD THAT - We are of the view that the disallowance made by the Assessing Officer is not in accordance with law. Consequently, we do not find any reason to interfere with the order of the learned CIT (A) which we uphold by reversing the order of the Assessing Officer. Thus, this ground of revenue is dismissed. Proportionate disallowance of expenditure merely on the basis of declaration made by sister concern - CIT-A deleted the addition - HELD THAT - The verification of expenses relates to AY 2010-11 and not to the year under consideration. The learned CIT(A) has given a very detailed reasoning and reversed the order of the Assessing Officer which are reproduced above. Consequently, in view of the detailed reasoning given by the learned CIT(A) which in our opinion is in accordance with law and we find no infirmity to take a view other than the view taken by the learned CIT(A). Keeping this in view, we uphold the order of the learned CIT (A) by dismissing ground raised by the Revenue. Payments towards purchase of flat in their Apartments - HELD THAT - As noticed that in both these additions the party to whom the alleged payment in cash was made is common M/s Ashed Properties and Investments Private Limited. In this regard it is brought to our notice by the Ld AR that AO has not brought on record any confirmation of payment of cash from the builder M/s Ashed properties because director of the M/s Ashed Properties in his statement before the department at Banglore wherein it has been stated that no cash payment has been received for purchase of said property from the assessee. It is also evident from the statement recorded u/s 132(4) of the assessee, she was not confronted with the question that whether any cash payment is made by her to the aforesaid builder. Addition was made on the basis of statement of the spouse of the assessee, without any corroborative evidence or any incriminating material. In this context case laws quoted supra by the Ld AR in the case of Hon ble Guajat HC in the case of Umang H. Takkar 2011 (10) TMI 477 - GUJARAT HIGH COURT and Arun Kumar Bhansali Vs. DCIT 2005 (11) TMI 175 - ITAT BANGALORE-A are relevant. We therefore of the view that the additions made for unexplained cash payment on the assessee cannot survive and accordingly deleted. Consequently, decided in favour of the assessee.
Issues Involved:
1. Deletion of disallowance under section 80IB(3)(ii) of the Income Tax Act, 1961. 2. Deletion of disallowance of additional depreciation on windmill. 3. Deletion of penalty for overloading of trucks by treating it as compound fee. 4. Deletion of addition of Rs. 15,00,000 for interior works. 5. Deletion of addition of Rs. 27,00,000 as income from house property. 6. Proportionate disallowance of expenditure. 7. Addition on account of unexplained cash credit of Rs. 50,00,000 and Rs. 2,00,00,000. Detailed Analysis: 1. Deletion of Disallowance under Section 80IB(3(ii)): The first issue addressed was whether the CIT(A) was justified in deleting the disallowance under section 80IB(3(ii)). The assessee, a proprietor of M/s. Rajlakshmi Minerals, claimed a deduction under section 80IB, which was disallowed by the Assessing Officer (AO). The CIT(A) allowed the claim based on various judicial pronouncements and the Tribunal's previous orders in the assessee's own case. The Tribunal upheld the CIT(A)'s decision, noting that the AO did not bring any new evidence to counter the claim and the enhancement of the deduction was due to an arithmetic error. 2. Deletion of Disallowance of Additional Depreciation on Windmill: The AO disallowed additional depreciation on the windmill, stating it was not used in manufacturing or production. The CIT(A) reversed this, citing that generation of electricity by windmill amounts to manufacturing, supported by judicial precedents. The Tribunal upheld the CIT(A)'s decision, referencing the Bombay High Court's ruling in the assessee's sister concern's case, which allowed additional depreciation on windmills. 3. Deletion of Penalty for Overloading of Trucks: The AO disallowed expenses for overloading trucks, treating them as penalties. The CIT(A) reversed this, stating the fees were compounding fees, not penalties, and were necessary for business operations. The Tribunal upheld the CIT(A)'s decision, agreeing that the expenses were for business purposes and not in violation of any law. 4. Deletion of Addition of Rs. 15,00,000 for Interior Works: The AO added Rs. 15,00,000 as unexplained cash payment for interior works based on seized documents. The CIT(A) found that the payments were made by cheque and duly accounted for in the books. The Tribunal upheld the CIT(A)'s decision, noting that the payments were verified and matched with the seized documents. 5. Deletion of Addition of Rs. 27,00,000 as Income from House Property: The AO added Rs. 27,00,000 as income from house property, assuming the property was habitable. The CIT(A) found that the property was not fit for habitation until a later date, supported by seized documents and completion certificates. The Tribunal upheld the CIT(A)'s decision, agreeing that no annual letting value could be determined for the year under consideration. 6. Proportionate Disallowance of Expenditure: The AO made proportionate disallowance based on a declaration by the assessee's sister concern about inflated expenses. The CIT(A) reversed this, stating the AO did not provide specific evidence for the year under consideration. The Tribunal upheld the CIT(A)'s decision, noting the AO failed to bring any incriminating evidence for the relevant year. 7. Addition on Account of Unexplained Cash Credit of Rs. 50,00,000 and Rs. 2,00,00,000: The AO added Rs. 50,00,000 and Rs. 2,00,00,000 as unexplained cash credits based on a loose chit and statements made by the assessee's spouse. The CIT(A) upheld the additions, but the Tribunal reversed this, stating there was no corroborative evidence or incriminating material to support the additions. The Tribunal noted that the payments were made through banking channels and duly accounted for in the books. Conclusion: The Tribunal dismissed all the appeals of the revenue, upheld the CIT(A)'s decisions, and allowed the appeals filed by the assessee. The cross objections filed by the assessee were dismissed as they became infructuous.
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