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2016 (7) TMI 571 - AT - Income TaxDeduction under section 80IA(4)(iii) - denial of claim on the ground that the assessee has offered the income from leasing/licensing of the “Industrial Project” in Hyderabad as ‘Income from House Property’ and not as ‘Income or Profits & Gains from Business or Profession’ - Held that:- The assessee has been allowed deduction in the first year and it is the bounden duty of the A.O. to examine the eligibility of the assessee to claim the deduction under section 80IA(4) of the Act at the time of allowing such deduction. Since the claim has been allowed, it is to be presumed that the A.O. is satisfied about the allowability of the claim. This being the second year, unless there are distinguishing facts and circumstances for taking a different view and deny the claim of deduction, the A.O. cannot take a contrary stand. The CIT(A) has in fact, directed the A.O. to examine the assessment order for A.Y. 2009-2010 and to see whether the A.O. has examined the eligibility of the assessee and to take suitable action. This direction, in our opinion, is not sustainable. The CIT(A) can only deal with the appeal before him and cannot give a direction with regard to another assessment year not before him. Therefore, such direction is not sustainable and is hereby quashed. Revision u/s 263 - A.O. has accepted the lease rentals from I.T. Park as “Income from house property” though denied the claim of the assessee under section 80IA of the Act on the ground that deduction cannot be given under the head “Income from House Property” - Held that:- Stand of the A.O. has been that since the income is not offered as business income, the deduction under section 80IA cannot be allowed. If the stand of the CIT is accepted, and the income is brought to tax under the head “business income”, then the deduction under section 80IA(4) would be allowable whereby the income of the assessee would not be exigible to tax. Therefore, it is clear that there is no prejudice caused to the revenue by the view adopted by the A.O. For a revision order to be sustained, the assessment order should be both erroneous as well as prejudicial to the interests of the Revenue. In the case before us, as we have already held that there is no prejudice caused to the Revenue and further since we have also held in assessee’s appeal against the assessment order denying the claim of deduction under section 80IA(4), that the assessee is eligible for deduction under section 80IA even if the income is returned under the head “Income from house property”, the revision order is not sustainable. Appeal decided in favour of assessee.
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