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2022 (8) TMI 122 - AT - Income TaxDeduction u/s 80IC - manufacturing of plastic packaging products such as PET and HDPE bottles, jars, caps and closures - claim denied as products manufactured by the assessee come within Schedule 13 of the Act, hence, do not fulfill the condition of section 80IC(2)(a) - Assessee argued that similar claim has been accepted in earlier years - Proof of manufacturing activities - HELD THAT:- The assessee has set up a manufacturing unit for manufacture of PET, HDPE bottles etc. at Barotiwala, Himachal Pradesh. As per form No. 10CCB , the date of commencement of manufacturing activity is 17.06.2004 and the first year of claim of deduction under section 80IC of the Act is assessment year 2005-06. It is further evident, the assessee had undertaken expansion of the unit in financial year 2007-08 and has invested an amount of about Rs. 4 crores in plant and machinery. AO has not specifically assigned any other reasons for denying assessee’s claim of deduction under section 80IC of the Act. While deciding the issue in appeal, learned Commissioner (Appeals) has held that the finding of the Assessing Officer that the products manufactured by the assessee come within Schedule 13 of the Act is unsustainable in view of the decision of the Hon’ble Delhi High Court. Admittedly, against the aforesaid observation of learned Commissioner (Appeals), the Revenue has not come in appeal. There is no other specific reason or observation by the departmental authorities for denial of assessee’s claim of deduction under section 80IC - Commissioner (Appeals) has made a general observation that the assessee failed to furnish required details without specifying, what are the details required to be furnished by the assessee. Of course, one more reason learned Commissioner (Appeals) has assigned for denying assessee’s claim of deduction is, on earlier assessment years the fulfillment of condition of section 80IC were not examined as the returns of income filed by the assessee were processed under section 143(1) of the Act. From the materials placed before us, the aforesaid finding of learned Commissioner (Appeals) and the Assessing Officer are found to be not borne out from record. Thus disallowance of deduction claimed by the assessee under section 80IC of the Act is unsustainable. - Decided in favour of assessee. Disallowance of fixed assets written off in profit and loss account - Addition u/s 43B on account of non-payment contribution to PF/ESI - whether since, the disallowances made go to increase the profits, the assessee is entitled to claim deduction under section 80IC of the Act, in respect of such enhanced profit? - HELD THAT:- We agree with the submissions made by the learned counsel for the assessee. The disallowance made by the Assessing Officer, which are subject matter of dispute, have the effect of enhancing the profit of the assessee. That being the case, the assessee remains entitled to claim deduction under section 80IC of the Act in respect of such enhanced profit. Therefore, we direct the Assessing Officer to allow assessee’s claim of deduction under Section 80IC of the Act on the aforesaid additions. Grounds are allowed.
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