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of <h1>Appellate Tribunal affirms increased deduction under section 80IA while capping at assessee's income level.</h1> <h3>DCIT, Central Circle-3 (3), Kolkata Versus M/s. Kaushalya Infra. Development Corp. Ltd.</h3> DCIT, Central Circle-3 (3), Kolkata Versus M/s. Kaushalya Infra. Development Corp. Ltd. - TMI Issues:The issues involved in this judgment are related to the deduction claimed under section 80IA of the Income Tax Act and the permissible limits of deduction under Chapter VIA in relation to the gross total income of the assessee.Deduction u/s 80IA Claim:The Appellate Tribunal heard both appeals together as they involved common issues. The original assessment disallowed the deduction u/s 80IA(4) as conditions were not fulfilled. The Tribunal directed the matter back to the CIT(A) for fresh determination of the claim u/s 80IA. The CIT(A) allowed a higher deduction than originally claimed by the assessee, leading to a loss. The Tribunal had not restricted the deduction to the original claim amount, allowing the CIT(A) to examine all details furnished by the assessee for determining the eligible deduction.Legal Precedents:The judgment referred to legal precedents emphasizing that the purpose of an appeal procedure is to ascertain the correct tax liability of the assessee in accordance with law. Appellate authorities have the jurisdiction to consider all proceedings and material on record to determine tax liability. The Bombay High Court held that appellate authorities can entertain additional claims and grounds, even if not raised before the Assessing Officer, to ensure correct tax liability determination.Limitation on Deduction:While the CIT(A) was justified in considering the claim for deduction u/s 80IA, it was directed that the deduction should not exceed the gross total income of the assessee as per section 80A(2) of the Act. The assessee would not be entitled to carry forward any loss resulting from a higher deduction allowed by the CIT(A) beyond the originally claimed amount. The judgment applied mutatis mutandis to another identical appeal.In conclusion, the Appellate Tribunal upheld the CIT(A)'s decision to allow a higher deduction u/s 80IA, subject to the limitation that the deduction should not exceed the gross total income of the assessee. The judgment highlighted the importance of correct tax liability determination and the authority of appellate bodies to consider additional claims for ensuring fairness in tax assessments.
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