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TMI Blog2017 (10) TMI 1635X X X X Extracts X X X X X X X X Extracts X X X X ..... tax Act, 1961. The assessee goes unrepresented before us. We find from the records that the assessee went unrepresented before the Tribunal also. It is also revealed from records that the assessee operates a small manufacturing unit at Yanam in Pondicherry and this unit has been registered as a Small Scale Tiny Unit. The assessee has been claiming deduction in terms of Section 80IB of the Income-tax Act since its inception in the financial year 2001-02. In this appeal, however, we are concerned with the assessment year 2004-05 corresponding to the financial year 2003-04. There was scrutiny assessment in that assessment year and certain expenses were added. So far as the subject of dispute in this appeal is concerned however, that did not fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Revenue Audit. Sri K.S. Nahata, A/R of the assessee had submitted a gist of Sec. 80IB claiming that the claim of sec. 80IB in bonafide. I have gone through the explanation offered by the assessee and also Sec. 80IB and it is observed that the assessee is not justified in claiming Sec. 80IB because of the fact that Sec. 80IB has clearly indicates that "In the case where the Industries undertaking manufacturers or produce articles or things that undertaking employees must be 10 or more. In the case of the assessee it is observed from the details of salary and wages of Modern Industries that there was only 3 workers in the said undertaking. Hence the claim of deduction U/s. 80IB is disallowed and total income is computed as below:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . CIT(A) further observed that no expenditure was incurred by the assessee towards payment of wages to temporary workers, labourers, if any, which satisfy the requirement of 10 or more workers in terms of section 80IB of the Act. Now the short issue that arises for our consideration is whether the ld. A.O. having granted deduction u/s. 80IB of the Act in the initial assessment year is entitled to withdraw the same in the subsequent years and more so whether it can be done by him in the proceedings u/s. 154 of the Act. The fact of withdrawal of deduction u/s. 80IB of the Act in the subsequent years when the same were duly granted by the ld. AO in the initial assessment years per se becomes a debatable issue and hence I hold that the same can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subject matter of 154 proceedings. Reliance in this regard is placed on the decision of the Hon'ble Apex Court in the case of T.S. Balaram & Co. vs. Valkart Bros. MANU/SC/0400/1971 : (1971) 82 ITR 50 (SC). When two views are possible, obviously it becomes a debatable issue. It cannot be the subject matter of rectification proceedings u/s. 154 of the Act. In view of the aforesaid facts and circumstances of the case and in view of the judicial precedents, I hold that the action of the ld. AO in denying the deduction u/s. 80IB of the Act u/s. 154 proceedings is bad in law. The grounds raised by the assessee are allowed." 7. So far as tax impact of this appeal is concerned, it was conceded by the learned Counsel for the revenue that the i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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