Deduction u/s 80IB  of IT Act  shall not be Allowable in Respect of Increase in Business Income due to Addition on Account of Concealed Production: ITAT [Read Order]

The Mumbai bench of Income Tax Appellate Tribunal (ITAT) has recently held that deduction under Section 80IB of Income Tax Act, 1961 should not be allowable in respect of increase in  business income due to addition on account of concealed production.

The Assessee Medley Pharmaceuticals Ltd is a company engaged in the business of manufacturing and selling of pharmaceutical products. For the assessment year 2010-11, the assessee filed the return of income declaring a taxable income at Rs.81,83,793/- after claiming deduction under sections 80G and 80IB amounting to Rs.30,20,66,215/-

Thereafter the assessee case was selected for scrutiny and the statutory notices were duly served on the assessee.

The Assessing Officer concluded the assessment by making a disallowance of concealed sales arising out of concealed production.

Aggrieved by the order assesee filed an appeal before the Commissionet of Income Tax(Appeals)[CIT(A)] who confirmed the above addition made by the Assessing Officer.

The CIT(A) did not accept the submissions of the assessee that the addition made should be allowed as deduction under section 80IB for the reason that Form 10CCB was not filed for the enhanced income and, therefore, the addition made cannot be allowed as deduction under section 80IB of theIncome Tax Act.

Aggrieved by the order of Commissioner of Income Tax (Appeals) assessee filed an appeal before the tribunal.

Counsel for assessee submitted that the above issue related to concealed production held  against the assessee in assessee’s own case by the coordinate bench of the Tribunal for Assessment year  2012-13.

Counsel for revenue supported the decision of the lower authorities.

The tribunal after verifying the facts observed that there was no reason to interfere with the decision of the CIT(A) in rejecting the claim of the assessee that 80IB Income Tax Act deduction be allowed in respect of increase in the business income due to addition on account of concealed production.

Therefore the tribunal of  two members  comprising  Amit Shukla (Judicial Member) and Padmavathy S. (Accountant Member) dismissed the appeal filed by the assessee.

Prakash Jotwani, counsel appeared for the assessee. Riddhi Mishra , counsel appeared for revenue.

To Read the full text of the Order CLICK HERE

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