Unit-Wise Deductions u/s 80IA must be Granted without considering Losses from other Eligible Units: ITAT [Read Order]

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) ruled that unit-wise deductions under Section 80IA of the Income Tax Act,1961,must be granted without considering losses from other eligible units.

The Revenue appellant contested two penalties under Section 271(1)(c) of the Income Tax Act related to the Assessment Years(AY) 2015-16 and 2016-17, which the Commissioner of Income Tax ( Appeals )[CIT(A)] had cancelled in orders dated May 26, 2024.

Rajkamal Builders Infrastructure Pvt. Ltd., the respondent-assessee, faced these appeals concerning penalties amounting to ₹1,72,57,400 linked to claims for set-off of losses while filing for deductions under Section 80IA.

Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here

In ITA No. 1403/Ahd/2024 for AY 2015-16, the Revenue challenged the CIT(A)'s decision to delete the penalty on the basis of quantum additions. Similarly, ITA No. 1411/Ahd/2024 for AY 2016-17 raised the same objections regarding the penalty amount.

The counsel for the respondent-assessee argued that the quantum appeals for the assessment years in question had previously been resolved by the Co-ordinate Bench, which deleted the quantum additions based on the judgment in the case of Punit Construction Company. This judgment established that deductions under Section 80IA must be granted on a unit-wise basis without considering losses from other eligible units.

The Tribunal noted that the Co-ordinate Bench had also annulled penalties under Section 271(1)(c) for earlier assessment years, emphasizing that the resolution of quantum appeals in favor of the assessee rendered the penalties infructuous. The CIT(A) had ruled that the respondent-assessee's claims were bona fide, with all necessary particulars disclosed in the return and supported by audit reports.

The Senior Departmental Representative mentioned that the Revenue had appealed to the High Court but was unaware of the current status of those proceedings.

Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here

After considering the submissions, the bench concluded that the CIT(A) had rightly followed the earlier decision of the tribunal in the assessee's case, which had reached finality.

The two member bench comprising T.R. Senthil Kumar(Judicial Member) and Narendra Prasad Sinha(Accountant Member),found that the grounds of appeal raised by the Revenue lacked merit, leading to the dismissal of both appeals.

To Read the full text of the Order CLICK HERE

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