2022 (10) TMI 831 - AT - Income Tax

Assessee wins deduction case under Section 80-IA, Tribunal overturns Assessing Officer's decision

The Tribunal found in favor of the assessee, holding that income from sources other than generation and distribution of power is eligible for deduction ... Deduction u/s 80-IA - income shown under the head “Other Income” of the projects is not eligible for deduction u/s 80IA - HELD THAT:- Before us, the Revenue has not placed any material on record to demonstrate that the decision of the Tribunal in assessee’s own case for earlier years has been stayed, overruled or set aside by higher judicial forums. It has also not pointed to any distinguishing feature in the facts of the case for the year under consideration and that of earlier years. In such a situation, we following the same reasonings given in assessee’s own case by the Coordinate Bench of Delhi Tribunal in [2022 (2) TMI 1135 - ITAT DELHI] hold that the A.O. was not justified in denying the claim of deduction under section 80IA of the I.T. Act, 1961. We, accordingly, direct the A.O. to allow the claim of deduction under section 80IA on such income. Thus, the grounds of appeal of the assessee are allowed. Issues Involved:1. Denial of deduction under Section 80-IA of the Income Tax Act, 1961.2. Determination of whether income from other sources is eligible for deduction under Section 80-IA.Issue-Wise Detailed Analysis:1. Denial of Deduction under Section 80-IA of the Income Tax Act, 1961:The primary issue in this case revolves around the denial of the claim of deduction made by the assessee company under Section 80-IA of the Income Tax Act, 1961. The assessee company, a Government of India Enterprise engaged in the business of generation of electricity, construction contracts, and consultancy services, claimed deductions under Section 80-IA for four power station projects: Dulhasti Power Station, Teesta-V Power Station, Chamera Power Station Stage-II, and Dhauliganga Power Station. The Assessing Officer (A.O.) noticed that the assessee had earned income from other sources aggregating to Rs. 2,41,37,671/- in respect of these units and denied the claim of deduction under Section 80-IA on this income, reasoning that Section 80-IA mandates deduction only from the profit earned from the business and not from other income.2. Determination of Whether Income from Other Sources is Eligible for Deduction under Section 80-IA:The A.O. held that Rs. 2,41,37,671/-, being income from other sources, was not eligible for deduction under Section 80-IA and denied the claim of benefit of deduction on such income. The assessee, aggrieved by the A.O.'s order, appealed to the Commissioner of Income Tax (Appeals) [CIT(A)], who upheld the A.O.'s decision, noting that on identical facts in the assessee's own case for previous assessment years (2010-11 to 2014-15), similar orders were upheld. The assessee then appealed to the Tribunal, arguing that the issue was identical to that of the earlier years and that the Tribunal had previously decided in favor of the assessee.Tribunal's Findings:The Tribunal reviewed the material on record and noted that the CIT(A) had followed his own decision in the assessee's case for the earlier years. The Tribunal found that the identical issue had been decided in favor of the assessee by the Coordinate Bench of the Delhi Tribunal for the A.Y. 2014-15. The Tribunal referred to the findings of the Coordinate Bench which had allowed the appeal of the assessee, stating that the income derived from sources other than generation and distribution of power is eligible for deduction under Section 80-IA. The Tribunal emphasized that the Revenue had not provided any material to demonstrate that the earlier decisions had been stayed, overruled, or set aside by higher judicial forums. Conclusion:The Tribunal concluded that the A.O. was not justified in denying the claim of deduction under Section 80-IA of the Income Tax Act, 1961. It directed the A.O. to allow the claim of deduction under Section 80-IA on such income, thereby allowing the appeal of the assessee. The Tribunal's order was pronounced in open court on 18.10.2022.