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2020 (8) TMI 826 - AT - Income TaxDeduction u/s 80IB - CIT-A restricted addition - HELD THAT:- AO has not rejected the books of account u/s 145 of the Act and made the estimation of profit/disallowance of deduction under Section 80IB of the Act which appears to be incorrect and against the provision of law Assessee has sufficiently proved that the turnover of assessee having higher margin in the earlier years have reduced while the products where there is lower margin have increased substantially. There is not gross loss, but a fall in gross profit of the assessee which has also been explained by stating that with the increase in excise duty, margin of assessee has come down. The rate of excise duty earlier was 16.23% on MRP while after amendment, the said rate was applied on MRP less abatement and thus the effective increase in duty is approximately 355% while on some other products, percentage increase in excise duty was over 600%. Thus, we do not find any reason to concur with the observations of the Assessing Officer. AO did not consider the fact that assessee has shifted product manufactured through other in earlier years to self-manufacturing unit at Jammu and this has also created the fallacious and misleading findings by the AO as to the Jammu profit on which deduction u/s 80IB has been denied. Finally, we note that both the authorities below have failed to give a cogent and convincing reasons for reducing the claim of assessee u/s 80IB as various doubts and suspicion of the authorities below were duly addressed by the assessee by furnishing various details and information qua the various units. We are not in a position to sustain the order of CIT(A) wherein the order of Assessing Officer has been confirmed. Accordingly, we set-aside the order of CIT(A) and direct the Assessing Officer to allow the deduction u/S 80IB of the Act as claimed by the assessee. - Decided in favour of assessee.
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