The Delhi Bench of Income Tax Appellate Tribunal (ITAT) allowed the deduction in respect of Profits and Gains of Certain Undertaking.
The assessee is engaged in the business of manufacture and sale of Automotive components, Medical products, Thermal and Acoustic Insulation, Perlite Filter Aid, Perlite concrete blocks, etc. in its various units. For the assessment year 2014-15, they filed their return of income on 26.12.2014 declaring an income of Rs.21,90,46,670. Assessment under section 143(3) of the Income-tax Act was completed at an income of Rs.23,63,26,440/- after disallowing deduction/s. 80IC of the Act for Kotdwar unit to the extent of Rs.1,35,19,592/- and disallowance of expenses u/s. 14A read with Rule 8D of the Income-tax Rules to the tune of Rs.37,60,178.
In appeal, CIT(A) deleted both the additions after considering the contentions raised by the assessee. Revenue is, therefore, aggrieved of the impugned order and filed this appeal, challenging the deletion of both the additions.
The Assessing Officer, therefore, concluded that Unit-III at Kotdwar was merely an expansion or split-up of the main unit at Noida, and on that premise, he disallowed deduction u/s. 80IC of the Act to the tune of Rs.1,35,19,592/-. Assessing Officer further noted that a similar claim was made by the assessee in respect of such unit-III of Kotdwar for the assessment years 2011-12, 2012-13, and 2013-14 which was denied, and no new material was brought on record.
The Coram of Judicial Member K.Narasimha Chary and Technical Member N.K.Billaiya found it difficult to say that the impugned order suffers any illegality or irregularity, inasmuch as the assessment year 2014-15 is not the initial year whereas the initial year happens to be the assessment year 2010-11 and from the assessment year 2010-11 to 2013-14, the claim of the assessee for deduction u/s. 80IC stands allowed. Unless and until the position in the initial year is disturbed, it is not possible to take a different view for the subsequent assessment years. On this ground, the ITAT upheld the findings of the CIT(A).
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
