2016 (6) TMI 1426 - AT - Income Tax

Deduction u/s 80IB - manufacture or producing an article or thing - HELD THAT - AO noticed that though in the assessee s own case the Hon ble Bombay High Court had allowed the claim of the assessee in earlier year in the case reported in 2011 (11) TMI 32 - BOMBAY HIGH COURT but he disallowed the claim in this year also because the SLP filed by the Department before the Hon ble Supreme Court is pending. CIT(A) did not find it justifiable to sustain the disallowance in view of the prevailing judgement of the Hon ble Bombay High Court in the assessee s own case. Before us the Ld. Representative for the respondent assessee pointed out that subsequent to the decision of the CIT(A) the Hon ble Supreme Court has since dismissed the SLP filed by the Department 2015 (4) TMI 1322 - SUPREME COURT OF INDIA a copy of which has been placed on record. Appeal of the Revenue is dismissed.

Summary

Issues:
Appeal against denial of deduction under section 80IB of the Income Tax Act for assessment year 2011-12.

Analysis:
The appeal before the Appellate Tribunal ITAT Mumbai pertained to the denial of the assessee's claim of deduction under section 80IB of the Income Tax Act amounting to Rs. 49,65,220 for the assessment year 2011-12. The Assessing Officer disallowed the claim citing a pending Special Leave Petition (SLP) filed by the Department before the Hon'ble Supreme Court, despite a previous favorable judgment by the Hon'ble Bombay High Court in the assessee's own case. The CIT(A) disagreed with the disallowance, considering the precedent set by the High Court in the assessee's favor.

The representative for the respondent assessee informed the Tribunal that subsequent to the CIT(A)'s decision, the Hon'ble Supreme Court had dismissed the SLP filed by the Department on 28/04/2015, providing clarity on the matter. This development indicated that the legal position had been settled in favor of the assessee post the CIT(A)'s decision.

Considering the updated legal position and the dismissal of the Department's SLP by the Hon'ble Supreme Court, the Tribunal found no grounds to justify the appeal of the Revenue. Consequently, the Tribunal dismissed the appeal of the Revenue, upholding the assessee's claim for deduction under section 80IB of the Income Tax Act for the relevant assessment year.

The Tribunal pronounced the order in the open court on 22/06/2016, thereby concluding the matter in favor of the assessee based on the prevailing legal judgments and the dismissal of the Department's SLP by the Hon'ble Supreme Court.