Tribunal upholds CIT(A)'s decision on deductions under Sections 80IA/80IB for assessment years 1999-2003.

The Tribunal upheld the CIT(A)'s decision allowing deductions under Section 80IA/80IB for assessment years 1999-2000 to 2002-03. The department's appeals contesting the deduction were dismissed due to uncontroverted evidence supporting genuine manufacturing activities by the assessee. The Tribunal found no merit in the department's arguments based on the locked factory and absence of machinery. The deductions were allowed, except for interest earned on fixed deposits, which was denied but not challenged by the assessee. The order confirming the deductions was issued on August 21, 2013.

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Issues involved:
Appeals against allowing deduction under Section 80IA/80IB for assessment years 1999-2000 to 2002-03. Cross objections by assessee against the reopening of assessment for the same years.

Analysis:
The Tribunal consolidated four appeals by the department and four cross objections by the assessee regarding deduction under Section 80IA/80IB for the mentioned assessment years. The department contested the allowance of the deduction, claiming no genuine manufacturing activity by the assessee. The AO reopened the assessment based on an Inspector's report indicating the alleged factory's closure. However, the CIT(A) upheld the reopening but found genuine business activities by the assessee, allowing the deduction. The department appealed this decision, while the assessee filed cross objections against the reopening.

During the hearing, the department argued based on the AO's findings of no business activity due to the locked factory and absence of machinery. Conversely, the assessee's counsel relied on the CIT(A)'s decision, emphasizing genuine business activities supported by evidence like machinery purchase, worker employment, and manufacturing accounts. The CIT(A) noted the assessee's compliance with industry regulations and supply evidence to TCS, supporting the manufacturing claim. The CIT(A) concluded the AO's findings lacked merit and directed the allowance of deductions for all years.

The Tribunal found the CIT(A)'s factual findings uncontroverted, supporting the manufacturing activities and dismissing the department's appeals. The deduction was allowed for the relevant assessment years, except for interest earned on fixed deposits, which was denied but not challenged by the assessee. Consequently, the department's appeals were dismissed, leading to the dismissal of the assessee's cross objections. The order confirming the deduction under Section 80IA/80IB was pronounced in open court on August 21, 2013.

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