TMI Blog2018 (9) TMI 1823X X X X Extracts X X X X X X X X Extracts X X X X ..... /s 80IC then the assessee is not supposed to enhance the expenditure. CIT (A) has rightly deleted the deduction u/s 80IC made by the AO on account of inflated purchases. - Decided against revenue. Deduction-u/s 80IC on account of disallowance u/s 40(a)(ia) - according to the provisions of Section 80A(5) where assessee fails to make claim in the return of income for deduction u/s 80IC, no deduction is allowable - HELD THAT:- When the entire profit is deductible u/s 80IC, the disallowance u/s 40(a)(ia) would not make any difference as it would ultimately make the assessee eligible for its entire profit deductible u/s 80IC. Moreover, Revenue itself vide Circular No.37/2016 dated 02.11.2016 clarified that the ultimate profit of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for deduction u/s 80IC, no deduction is allowable.. 2. Briefly stated the facts necessary for adjudication of the controversy at hand are : Assessing Officer made disallowance of the claim of ₹ 73,91,587/- made under section 80IC of the Income-tax Act, 1961 (for short the Act ) for the reason that the purchases were made by the assessee in Faridabad whereas his business activities were carried out at Haridwar. AO also made disallowance of ₹ 5,20,550/- on account of violation of provisions of section 40(a)(ia) of the Act and assessed the total income at ₹ 2,57,71,167/-. 3. Assessee carried the matter by way of appeal before the ld. CIT (A) who has deleted the addition made by the AO by allowing the be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 7. The contention of the Revenue that when the assessee has not made any claim in the return of income for the amount claimed as deduction, the deduction cannot be allowed in view of the provisions contained u/s 80A (5) of the Act is not sustainable in the face of the fact that the assessee has certainly made the claim in the return as the AO himself shown the income from business at ₹ 3,36,83,304/- and in these circumstances, the deduction u/s 80IC is allowed on profit. So, the contention of the Revenue that the assessee has not made this claim in the return is wrong and incorrect. Moreover, when the entire profit of the assessee is exempt u/s 80IC then the assessee is not supposed to enhance the expenditure. So, the ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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