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2014 (11) TMI 341 - ITAT HYDERABADAllowability of claim of deduction u/s 80IB – Quantification of the profit of the assessee from the activity of execution of works contract - Held that:- The assessee is engaged in the business of manufacture of HDPE pipes as well as execution of works contract - CIT(A) upheld the decision of the AO that the interest income received on bank deposits was not eligible for deduction u/s 80IB, and this apparently was accepted by the assessee and the decision of the CIT(A) on that aspect became final - the issue relating to the determination of the profit from the manufacturing division eligible for deduction under S.80IB was dependent on and consequential to the estimation of profit of the assessee from the activity of works contract in as much as the balancing figure, after estimating the profit of the assessee from the activity of execution of works contract, was going to be the profit of the manufacturing division which is eligible for deduction u/s 80IB. CIT(A) rightly after estimating the profit of the assessee from the activity of execution of works contract as per the directions of the Tribunal, proceeded to direct the AO to allow deduction to the assessee u/s 80IB in respect of the balancing figure, which represented the profit of the manufacturing division of the assessee - CIT(A) has not gone beyond the scope of the set aside proceedings, while directing the AO to allow the claim of the assessee for deduction u/s 80IB in respect of the profit of the manufacturing division, which is determined in consequence to the estimation of the profit of the assessee from the activity of execution of works contract – Decided against revenue. Invocation of section 40(a)(ia) – Held that:- CIT(A) has actually deleted the entire disallowance made by the AO u/s 40(a)(ia) by following the decision in COMMISSIONER OF INCOME TAX, KOL-XI, KOL Versus VIRGIN CREATIONS [2011 (11) TMI 348 - CALCUTTA HIGH COURT] - CIT(A) rightly deleted the disallowance made by the AO u/s 40(a)(ia) – Decided against revenue.
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