2011 (3) TMI 1716 - HC - Income Tax

High Court affirms Tribunal's decision on assessee's deduction eligibility under section 80IB

Commissioner of Income Tax Versus Trans Asia Plast

The High Court upheld the Tribunal's decision regarding the eligibility of the assessee for deduction u/s. 80IB on the enhanced profit, dismissing the Tax ... - Issues involved:The issue involves the eligibility of the assessee for deduction u/s. 80IB of the Income-tax Act, 1961 on disallowance made u/s. 40 (a)(ia).Judgment Summary:Eligibility for Deduction u/s. 80IB:The assessee filed a return of income declaring 'NIL' income and claimed a deduction of &8377; 12,82,568/= u/s. 80IB. The Assessing Officer determined the total income at &8377; 17,13,927/=, making an addition u/s. 40 (a)(ia). The CIT [A] confirmed the disallowances but directed the Assessing Officer to grant deduction u/s. 80IB on the enhanced profits. The assessee accepted the CIT [A]'s order, which was challenged by the Revenue before the Tribunal. The Tribunal rejected the Revenue's appeal, leading to the present appeal before the High Court.Decision and Reasoning:The High Court found no infirmity with the view taken by the CIT [A] and the Tribunal that the assessee would be entitled to proportionate benefit under Section 80IB on the enhanced profit. The Tribunal's decision was supported by previous orders regarding benefits u/s. 80HHC under similar circumstances. The High Court noted a similar question in a previous case where the Tribunal's view was upheld. Considering the fact-situation, the High Court upheld the Tribunal's order and dismissed the Tax Appeal.Therefore, the High Court upheld the Tribunal's decision regarding the eligibility of the assessee for deduction u/s. 80IB on the enhanced profit, dismissing the Tax Appeal.