2017 (8) TMI 1669 - AT - Income Tax

Disallowance u/s 80IC - remission of VAT granted by the State Government - HELD THAT - In the light of the ratio laid down by the Tribunal in assessee s own case and that of identical cases we are of the considered opinion that the VAT remission is akin to the issue of Central Excise Refund we concur and allow the deduction u/s. 80IC of the Act claimed by the assessee in respect to the VAT remission. Therefore we allow all the appeals of the assessee.

Summary

Issues:
Appeal against disallowance of relief claimed under section 80IC of the Income-tax Act, 1961 on the remission of VAT granted by the State Government.

Analysis:
The judgment involves 18 appeals by the assessee challenging the disallowance of relief claimed under section 80IC of the Income-tax Act, 1961 on the remission of VAT granted by the State Government. The AO disallowed the deduction claimed by the assessee, which was confirmed by the Ld. CIT(A). The Tribunal considered the issue in the lead case for AY 2007-08 and decided that the decision would be followed in all other 17 appeals. The Tribunal referred to previous decisions in the assessee's case where it was held that remission of VAT formed part of the profits and gains of the eligible unit, allowing the claim of the assessee.

The Tribunal emphasized that the remission of VAT is akin to the issue of Central Excise Refund, which had been previously settled in similar cases. Referring to the reasoning given in previous judgments, the Tribunal concurred and allowed the deduction under section 80IC of the Act claimed by the assessee in relation to the VAT remission. Consequently, all the appeals of the assessee were allowed, following the established precedent in similar cases.

The Tribunal dismissed the grounds taken by the Revenue, as it had already allowed the appeals of the assessee based on the previous decisions and the similarity between VAT remission and Central Excise Refund. The judgment highlighted that the observations made in respect of Central Excise Refund were equally applicable to VAT remission, as both involved similar principles. The Tribunal confirmed the decisions of the Ld. CIT(A) on the issue of VAT remission, based on the established findings and reasoning in previous cases.

In conclusion, the Tribunal allowed all the appeals of the assessee, following the established precedents and reasoning related to the treatment of VAT remission as part of the profits and gains of the eligible unit. The judgment was pronounced in the open court on 02.08.2017, providing a comprehensive resolution to the issue of disallowance of relief claimed under section 80IC of the Income-tax Act, 1961 on the remission of VAT granted by the State Government.