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TMI Blog2019 (4) TMI 1438X X X X Extracts X X X X X X X X Extracts X X X X ..... f the purchases, effected by the assessee, was disallowed. While we are satisfied that the deduction allowed by the CIT (Appeals), as confirmed by the Tribunal, does not necessitate interfere in an appeal u/s 260A as noted by the Tribunal, in the order under appeal, the assessee, in the present case, had claimed deduction towards purchases made by him. These deductions were disallowed by the Assessing Authority. Since the assessee had made such a claim for deduction, the Tribunal has rightly held that Section 80A(5) of the Act is not applicable. Scope of Section 260A - substantial question of law - HELD THAT:- Interference, u/s 260A of the Act, is justified only if the appeal gives rise to a substantial question of law. It is only if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue carried the matter in appeal to the Tribunal. 4. In the order under appeal, the Tribunal observed that the assessee-unit was eligible for deduction u/s 80IC; it was not in dispute that the assessee was entitled to the benefit of Section 80IC on the entire eligible income; it was also not in dispute that the Assessing Officer had granted relief to the assessee, under Section 80IC, qua the sum of ₹ 73,91,587/- claimed in the return of income; when the profits, for the purposes of Section 80IC, were to be calculated as per Sections 28 to 44BB of the Income Tax Act, the purchases were also covered thereunder; while calculating the profits of any business, purchases were also deductible expenditure; disallowance of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e undertaking; and, since the entire profits of an undertaking is eligible for deduction under Section 80IC of the Income Tax Act, it mattered little whether or not a portion of the purchases, effected by the assessee, was disallowed. 6. While we are satisfied that the deduction allowed by the Commissioner of Income Tax (Appeals), as confirmed by the Tribunal, does not necessitate interfere in an appeal under Section 260A of the Income Tax Act, Mr. Hari Mohan Bhatia, learned Senior Standing Counsel for Income Tax, would draw our attention to Section 80A(5) of the Income Tax Act to contend that, since the assessee did not claim this expenditure, the Commissioner of Income Tax (Appeals) and the Tribunal could not have extended ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned Senior Standing Counsel would submit that, during the pendency of the appeal before the Commissioner of Income Tax (Appeals), the Assessing Officer was directed to verify the genuineness of the purchases made by the assessee; and, on such verification, the Assessing Officer found that the assessee had, in fact, made such purchases. 10. In the light of this submission, it is clear that the Assessing Officer should, in the first instance, not have made any deduction on the ground of inflated purchases, since the purchases were in fact, even according to the learned Senior Standing Counsel for Income Tax, made by the assessee. 11. Viewed from any angle, we are satisfied that no interference is called for, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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