2019 (1) TMI 284 - AT - Income Tax

Tribunal allows deduction under Section 80IA, directs recompute income with 10% husk expenditure. Ground challenging recomputation dismissed.

M/s Sree Murali Mohana Boiled & Raw Rice Mill (P) Ltd. Versus The Assistant Commissioner of Income-Tax, Central Circle-1 (1), Rajahmundry

M/s Sree Murali Mohana Boiled & Raw Rice Mill (P) Ltd. Versus The Assistant Commissioner of Income-Tax, Central Circle-1 (1), Rajahmundry - TMI Issues Involved:1. Admission of additional ground.2. Deduction under Section 80IA.3. Consumption of husk expenditure for captive power plant.4. Recomputing income without incriminating material.Detailed Analysis:1. Admission of Additional Ground:The assessee filed an additional ground contending that the addition made by the Assessing Officer (AO) was not based on seized material and thus should be deleted. The Tribunal admitted this additional ground for adjudication as it was purely a legal issue requiring no further enquiry.2. Deduction under Section 80IA:The assessee originally filed the return for the A.Y. 2010-11 declaring a total income of Rs. 67,08,152/- without claiming any deduction under Section 80IA. After a search under Section 132, the assessee filed a return declaring nil income and again did not claim the deduction. During the assessment proceedings, the AO observed a computation mistake and the assessee subsequently filed a revised return claiming the deduction under Section 80IA. The AO rejected this claim, stating that the revised return was barred by limitation. The CIT(A) upheld this decision, relying on Section 80AC and relevant case law. However, the Tribunal found that the assessee had filed the return within the due date but did not claim the deduction due to a computation error. The Tribunal held that the AO should allow the deduction under Section 80IA as the assessee is entitled to it for 10 consecutive years from the initial assessment year. The Tribunal directed the AO to verify the necessary documents and allow the eligible deduction.3. Consumption of Husk Expenditure for Captive Power Plant:The AO estimated the husk expenditure at 55% of total consumption, whereas the assessee estimated it at 10%. The Tribunal referred to its earlier order in the assessee’s own case for A.Ys 2012-13 and 2015-16, where the consumption of husk expenditure was estimated at 10%. Accordingly, the Tribunal directed the AO to recompute the income estimating the husk expenditure at 10%.4. Recomputing Income Without Incriminating Material:The additional ground raised by the assessee contended that the AO recomputed the income without any incriminating material. The Tribunal observed that the AO did not make any addition but only corrected the computation of income. Therefore, no incriminating material was necessary for this correction, and the Tribunal dismissed this additional ground.Conclusion:The Tribunal partly allowed the appeal for statistical purposes. It directed the AO to allow the deduction under Section 80IA after verifying the necessary documents and recompute the income estimating the husk expenditure at 10%. The additional ground regarding recomputing income without incriminating material was dismissed.