Tribunal upholds deduction under section 80IB for new industrial undertaking

The Tribunal affirmed the Ld. Commissioner's decision allowing deduction u/s 80IB for Assessment Year 2005-06, dismissing the Revenue's appeal. The Tribunal found the assessee met the conditions for the deduction by establishing a new industrial undertaking in a backward state. The Revenue's challenge lacked merit, as no contrary decision was presented. The Tribunal upheld the Ld. Commissioner's reliance on past orders, concluding the deduction was rightfully granted. The Revenue's appeal was dismissed on 18/04/2017.

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Issues:
Appeal against deduction u/s 80IB of the Income Tax Act, 1961 for Assessment Year 2005-06 and 2006-07.

Analysis:
The Revenue challenged the deduction u/s 80IB allowed by the Ld. First Appellate Authority for the assessee in the impugned order dated 31/07/2014. The Revenue contended that the deduction was granted without appreciating the provisions of the Act and the claim of earlier years (2005-06 and 2006-07) was also challenged before the High Court. During the hearing, the Department argued that the deduction granted to the assessee for those years had been challenged previously. Despite registered notices, no one appeared for the assessee, and no adjournment petition was filed. The Tribunal considered the submissions of the Department and reviewed the relevant findings recorded by the Ld. Commissioner of Income Tax (Appeal). The Ld. Commissioner had allowed the deduction based on establishing a new industrial undertaking in Daman and fulfilling the conditions of section 80IB. The Tribunal noted that the Mumbai unit continued operations normally, while new plant and machinery were installed at the Daman unit. The Ld. Commissioner had relied on previous decisions and dismissed the appeal of the Revenue due to lack of merit.

The Tribunal emphasized that the assessee had set up an industrial undertaking in an industrially backward state, fulfilling the conditions of section 80IB. The Ld. Commissioner's decision was affirmed by the Tribunal for Assessment Year 2005-06, and the Revenue's appeal was dismissed. The Tribunal found no contrary decision brought to its notice regarding the order challenged before the High Court. The Tribunal upheld the Ld. Commissioner's reliance on previous orders and dismissed the Revenue's appeal, as it lacked merit. The Tribunal concluded that the claimed deduction was rightly allowed, and the appeal of the Revenue was dismissed. The order was pronounced in the presence of the ld. DR on 18/04/2017.

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