Court affirms Tribunal's deduction decision for unit expansion income. No error found, appeal dismissed.

The High Court upheld the Tribunal's decision regarding the allowability of deduction under section 80I for income from the expansion of a dispersant unit. The Court emphasized that unless a deduction is withdrawn or rejected in initial assessment years, it cannot be denied in subsequent years. The Court found no error of law in the Tribunal's decision and dismissed the appeal, stating that no substantial question of law arose from the case.

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Issues:
Challenge to order under section 260 A of the Income Tax Act, 1961 on the allowability of deduction under section 80I for income from expansion of dispersant unit.

Analysis:
The appeal challenged the Tribunal's order on the allowability of deduction under section 80I for income from the expansion of a dispersant unit. The appellant contended that the deduction was disallowed in the assessment year 2000-01, even though it was allowed in previous years. The Commissioner of Income Tax (Appeals) dismissed the appeal, leading to further challenge before the Tribunal. The appellant argued that the denial of deduction in subsequent years was based on a new ground not raised previously, contrary to the principles established in relevant case laws.

Analysis:
The Tribunal, however, upheld the deduction, citing the principle that unless a deduction is withdrawn or rejected in initial assessment years, it cannot be denied in subsequent years. The Tribunal referred to a Division Bench judgment that reiterated this principle, emphasizing that the denial of deduction based on legality grounds alone was not sustainable. The High Court concurred with the Tribunal's decision, stating that it was in line with the legal precedents and the factual circumstances of the case. The Court found no error of law in the Tribunal's decision and dismissed the appeal, emphasizing that no substantial question of law arose from the case.

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