2021 (10) TMI 516 - AT - Income Tax

ITAT Delhi upholds deduction under section 80IC for business engaged in induction seal cap liner material.

ACIT Circle – 8 (2), New Delhi Versus Excel Pack Ltd.

ACIT Circle – 8 (2), New Delhi Versus Excel Pack Ltd. - TMI Issues:1. Allowance of deduction under section 80IC of the Income Tax Act.2. Disallowance of deduction claimed by the assessee.3. Appeal against the order of the Commissioner of Income Tax (Appeals).4. Interpretation of relevant legal provisions.Detailed Analysis:1. The appeal before the Appellate Tribunal ITAT DELHI involved the allowance of deduction under section 80IC of the Income Tax Act for the Assessment Year 2015-16. The assessee, engaged in the business of induction Heat Seal Cap liner material and Induction Wads, had claimed a deduction of Rs. 1,61,27,898/- under section 80IC of the Act in its return of income. The Assessing Officer (AO) denied the claim, citing pending challenges by Revenue before ITAT regarding similar claims in earlier years. The Commissioner of Income Tax (Appeals) allowed the deduction in favor of the assessee, leading to the Revenue's appeal before the ITAT.2. The main issue revolved around the disallowance of the deduction claimed by the assessee under section 80IC of the Act. The AO had denied the claim based on pending challenges by Revenue in earlier years, despite the CIT(A) allowing the deduction for those years. The CIT(A) noted consistency in facts across the years and ruled in favor of the assessee. The ITAT, considering previous decisions in the assessee's case, upheld the allowance of the deduction for the current assessment year as well.3. The Revenue's appeal challenged the order of the Commissioner of Income Tax (Appeals) regarding the deletion of the addition of Rs. 1,61,27,898/- on account of disallowance under section 80IC of the Act. The Revenue contended that the CIT(A) erred in law and on the facts of the case by allowing the deduction. However, the ITAT, after considering the arguments of both parties and the precedents set in earlier years, dismissed the appeal and upheld the decision of the CIT(A).4. The ITAT's decision was based on the interpretation of legal provisions, specifically section 80IC of the Income Tax Act. The Tribunal referred to previous orders in the assessee's case for different assessment years where similar issues were addressed, leading to the consistent allowance of the deduction. The ITAT emphasized the importance of factual consistency and adherence to previous judicial decisions in determining the eligibility for deductions under the relevant provisions of the Act.