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2020 (7) TMI 215 - AT - Income TaxReopening of assessment - AO recomputed deduction u/s 80IB by excluding job work from the turnover and proportionately allowing the claim of deduction - CIT(A) held the process of outsourcing / job work was an integral part of the processing and manufacture undertaken by the assessee, hence was entitled to entire claim the deduction u/s 80IB - HELD THAT:- Section 80IB of the I.T.Act is with regard to deduction of profits and gains from certain industrial undertakings. In the instant case the job work / process of outsourcing is nothing but stitching of footwear and is done under the direct supervision of the assessee. It is an integral part of the whole process of manufacture of footwear undertaken by the assessee. A.O. while completing the reassessment, admits that the assessee is eligible for deduction, but granted proportionate deduction by excluding job work estimated at 25% of the gross total income. The assessee has satisfied all the conditions for claiming deduction u/s 80IB and proportionate disallowance of job work for the purpose of computing deduction u/s 80IB is unwarranted and uncalled for. Therefore CIT(A) was correct in directing the A.O. to grant deduction u/s 80IB of the I.T.Act as claimed by the assessee. Delhi Bench of the Tribunal in the case of Rajiv Bhatnagar v. DCIT [2012 (12) TMI 1104 - ITAT DELHI] held that when all the conditions to qualify for deduction u/s 80IB(2) of the I.T.Act has been satisfied, necessarily, deduction u/s 80IB of the I.T.Act has to be granted in full. - Decided against revenue.
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