TaxTMI 
TaxTMI 
2011 (4) TMI 730
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.... order dated 26-12-2008. 2. The only issue in this appeal of the revenue is against the order of CIT(A) in allowing deduction under section 80-IB of the Act on delayed payment of employee's contribution of Provident Fund and contract payments on which payment of TDS was delayed, consequently, Assessing Officer disallowed by invoking provisions of section 4o(a)(ia) of the Act. For this, revenue has raised the following two grounds: "1. That on the facts and circumstances of the case and in law, the Ld. CIT(Appeals)-VIII, Kolkata, has erred in allowing the deduction under section 80-IB on disallowance of Rs. 1,58,844 on delayed payment of employees' contribution to the Provident Fund and Rs. 23,93,016 under section 40(a)(ia)....
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....employees' contribution to PF are belated payment and accordingly in view of the provisions of section 2(24)(x) r.w.s. 36(va) of the Act, disallowed and added back to the returned income of the assessee amounting to Rs.1,58,844. Similarly, in respect to the contract payment, the assessee filed details of TDS deducted as under: Date of TDS Amount paid Amount of TDS Due date of payment Actual date of payment 31-1-2006 28-2-2006 15,43,919 8,49,097 23,93,016 34,586 19.021 7-2-2006 7-3-2006 10-7-2006 10-7-2006 The Assessing Officer noted that TDS payments in terms of section 200(1) of the Act from contract payments were deducted under section 194C of the Act but payment made belatedly to the Gov....
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....n this ground, the appellant is disputing the Assessing Officer (AO)'s action in not allowing it enhanced deduction under Sec. 80-IB of the Income-tax Act, when, as a result of addition made in the assessment order its gross total income has increased. Perusal of the wording of the Sec. 80-IB of the Income-tax Act reveals that the deduction is to be worked out at a percentage of profits and gains derived by the appellant in business which is eligible for deduction under Sec. 80-IB of the Income-tax Act. The addition made in the assessment order has effectively enhanced such profits and gains. In my opinion, therefore, the appellant is eligible for the statutory deduction on this enhanced figures of profits and gains as computed by the A.O. ....
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....ssing Officer not computed deduction under section 80-IB of the Act, since profits of business has gone up on account of disallowance of employees' contribution to PF not deposited within the due dates and contract payments disallowed by invoking the provisions of section 40(a)(ia) of the Act. She stated that CIT(A) has rightly allowed the claim of the assessee by directing the Assessing Officer to compute deduction under section 80-IB of the Act on enhanced total income, which is resulting into addition made in the assessment to its gross total income. According to Ld. Counsel, by making addition the Assessing Officer has effectively enhanced business profits and deduction should have been computed on enhanced figures and CIT(A) has rightl....
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....and gains derived from any business referred to in sub-sections (3) to (11), (11A) and (11B) (such business being hereinafter referred to as the eligible business), there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction from such profits and gains of an amount equal to such percentage and for such number of assessment years as specified in this section." We find from the above section that deduction under section 80-IB of the Act is available to an assessee whose gross total income includes any profits and gains derived from eligible business as specified in the section. Here the assessee is claiming d....