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2019 (11) TMI 1434 - AT - Income TaxDeduction u/s 80IA(4) - assessee opted the deduction u/s 80IA(4) from Assessment Year 2012-13 onwards being the initial year but did not opt for the other two eligible units - Assessee made claim during the course of assessment proceedings by filing the audit report on Form 10CCB - A.O rejected the claims as claim made otherwise than by way of revised return cannot be entertained by the AO and requisite Form No. 3CCB was to be obtained and also filed before due date of the return hence the claim of the appellant is not eligible to be entertained - Profits and gains from all the three units were to be considered on consolidated basis no individually. HELD THAT:- As relying on case of ACIT V/s Admanum Finance Limited [2016 (6) TMI 1295 - ITAT INDORE] A.O has not justified in declining the legitimate claim made by the assessee during the course of assessment proceedings relating to deduction u/s 80IA(4) of the Act irrespective of the fact that claim was neither made in in original return of income nor revised return was filed. First sub issue raised in ground no.1 is decided in favour of assessee. Whether the Ld. A.O was justified in denying the benefit u/s 80IA(4) of the Act for not filing the audit report in Form 10CCB along with the return of income? - Hon'ble Jurisdictional High Court in the case of CIT Vs. Panama Chemicals Works [2006 (8) TMI 159 - MADHYA PRADESH HIGH COURT] dealt the similar issue holding that the claim of the assessee u/s 80IA(4) is justified if it has not filed the audit report in Form 10CCB along with return of income but submitted later on during the assessment proceedings. Whether before allowing deduction u/s 80IA(4) of the Act, profit and loss of each unit needs to be considered on individual basis or consolidated profit & loss of all the eligible units basis? - Co-ordinate Bench, Chennai in the case of Shriram Properties Pvt. Ltd V/s ACIT [2013 (9) TMI 446 - ITAT CHENNAI] decided similar issue in favour of the assessee thereby holding that profits and loss of individual units and not consolidated units are to be considered for granting deduction u/s 80IB. Initial year for claiming deduction of profits of eligible undertaking for 10 consecutive assessment years out of the slab of 15 or 12 years as prescribed in the Section, Hon’ble High Court of Madras in the case of Commissioner of Income Tax Vs M/s. G. R. T. Jewelers (India) Pvt. Ltd [2016 (3) TMI 1071 - MADRAS HIGH COURT] answered the question raised in favour of the assessee 'that the initial assessment year in Section 80lA(5) would only mean the year of claim of deduction under Section 80lA and not the year of commencement of eligible business'. The Honourable High Court of Madras further referred the Circular No. 1/2016 dated 15.02.2016 issued by the Central Board of Direct Taxes which clarified the position of law in respect of the claim to be made under section 80lA A.O should have accepted the legitimate claim made by the assessee claiming deduction u/s 80IA(4) of the Act, for the eligible undertaking namely wind mill at Jodha, Rajasthan and also accepted the audit report filed for making such claim during the course of assessment proceeeings. Further since the assessee opted claim u/s 80IA(4) of the Act for only Jodha unit, the loss of other two eligible undertakings were not required to be set off against the profits of Jodha unit since assessee had opted Assessment Year 2012-13 as initial assessment year for claiming deduction u/s 80IA(4) of the Act only for Jodha unit and not for other two units at Shajapur (M.P.). Ld. A.O is therefore directed to allow the deduction u/s 80IA(4). Denial of deduction of cess paid -whether the education cess paid by the assessee along with the income tax and surcharge is deductible as expenditure u/s 37 or it is not deductible as per provisions of Section 40(a)(ii) of the Act which refers to the ‘amount not deductible’? - HELD THAT:- We observe that similar issue came up before the Hon'ble High Court of Rajasthan in the case of Chambal Fertilizers and Chemicals Limited [2018 (10) TMI 589 - RAJASTHAN HIGH COURT] wherein Hon'ble High Court referred to Circular No. No.91/58/66-ITJ(19) dated 18.5.1967 and also various judgments we are are inclined to hold that the education cess is not a tax and thus is an expenditure u/s 37 of the Act which cannot be claimed against the profits and gains of the business carried out by the assessee. Thus finding of Ld. CIT(A) is reversed.
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