2010 (2) TMI 1314 - AT - Income Tax

High Court upholds denial of deduction u/s.80IA for contractor in water supply project

The High Court, Mumbai upheld the Assessing Officer's decision to deny deduction u/s.80IA to the assessee, considering them solely as a contractor in a ... - Issues involved: Appeal against deduction u/s.80IA of the Income Tax Act, 1961.Issue 1: Justification of deduction u/s.80IAThe appeal raised the issue of justification in allowing deduction u/s.80IA of the Income Tax Act, 1961, based on a previous order of the ITAT Mumbai. The department had not accepted the referred order and had appealed to the High Court, Mumbai against the same.Details: The Assessing Officer denied the deduction u/s.80IA to the assessee, considering them solely as a contractor in a water supply project, not engaged in infrastructure development. The CIT(A), however, reversed this decision, citing the decision of a Larger Bench in a similar case. The Tribunal, following the precedent, set aside the CIT(A)'s order and reinstated the Assessing Officer's decision, denying the deduction u/s.80IA.Key Takeaways:- The issue was decided based on the nature of the assessee's work and their eligibility for the deduction u/s.80IA.- Precedents and decisions from higher authorities played a crucial role in determining the outcome of the appeal.- The Tribunal's decision aligned with the interpretation of the law and previous judgments, leading to the denial of the deduction in this case.