2013 (3) TMI 841 - AT - Income Tax

Summary

Issues involved: Disallowance of deduction u/s.80IB(11A) for handling, storage, and transportation of food grains.

Issue 1: Disallowance of deduction u/s.80IB(11A)
The Revenue filed an appeal against the CIT(A)'s order confirming the addition of &8377; 2,47,639/- by disallowing deduction u/s.80IB(11A) on the grounds that the assessee was not involved in the integrated business of handling, storage, and transportation of food grains. The Assessing Officer assessed the income of the assessee at &8377; 6,29,888/- by making various additions, including disallowance of deduction claimed u/s.80IB(11A) for warehousing business. The main contention was that the assessee did not own any trucks for transportation, which led to the disallowance. The Assessing Officer relied on a report from a Ward Inspector, stating that the assessee did not provide transportation facilities to customers. The CIT(A) upheld the Assessing Officer's decision. The Tribunal, however, found that the assessee was engaged in handling, storage, and some part of transportation of food grains, which should not disqualify them from claiming the deduction u/s.80IB(11A). The Tribunal emphasized that transportation could be through hired vehicles and that the beneficial provisions should be liberally interpreted in favor of the assessee. The matter was remanded to the Assessing Officer for a fresh decision based on these considerations.

Conclusion: The appeal by the assessee was allowed for statistical purposes.