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2020 (10) TMI 304 - HC - Income TaxDeduction u/s 80IB - Assessee in Form No.10CCB failed to provide the details of number of workmen working in each of the Units of the Assessee - HELD THAT:- There was this omission on the part of the Assessee whilst filling in the Form 10CCB, it is not as if this omission was not rectifiable. In fact, the AO should have granted the Assessee an opportunity for rectifying this omission. Assessee even prior to the assessment, produced material before the AO, which evidences that each of the Units of the Assessee employed more than 10 workers. This means that there was material before the AO to conclude that the Assessee fulfilled the conditions required for claiming deduction under Section 80IB. In these circumstances, both, the Commissioner (Appeals), as well as the ITAT, were quite justified in directing grant of deduction u/s 80IB to the Assessee. In the case of Hindustan Steel Limited vs. State of Orissa [1969 (8) TMI 31 - SUPREME COURT] the Hon'ble Supreme Court has held that mere furnishing of deduction form 10CCB could, at the most, be a default of technical and venial nature. Such omission cannot be held to be so fatal as to merit the penalty of disallowance of deduction under consideration. The view taken by the Commissioner (Appeals) and the ITAT is in consonance with the law laid down by the Hon'ble Apex Court in Hindustan Steel Limited (supra). Accordingly, the substantial question of law 'A' is required to be decided against the Revenue and in favour of the Assessee. Deduction under Section 80IC - AO has held that the profits are not matching with the consumption of the electricity at the said Unit - AO has compared the consumption of electricity in various Units of the Assessee and on such basis, concluded that the profits in respect of the newly established Unit at Nalagarh appeared to be unreasonably high - HELD THAT:- The requirements of customers at Goa Unit are different from those of Daman Unit. The quality of printing, sale value and contribution of Nalagarh Unit is much higher as compared to other units. The products manufactured at Goa & Daman are excisable products whereas Nalagarh Unit is excise exempt for 10 years. Moreover the electricity power rate at Goa, Daman are different from the power rates at Himachal Pradesh. We find that the Commissioner of Income Tax was of the view that the AO should bring out the reason of more sales at Nalagarh Unit. We find that AO has not carried out any excise. We find that in the instant case, the AC has not rejected the books of account. We find that there are many reasons for higher electricity consumption, therefore, on this simple disparity the AO cannot disallow the deduction U/s 80IC. - Decided in favour of assessee.
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