2014 (4) TMI 790

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.... ld. CIT(A) erred in denying the claim u/s. 80IB in spite of the fact that after having accepted the belatedly filed Audit Report u/r. 46A and calling for Remand Report, he has failed to consider the fact that while appreciating an incentive provision, technical infirmities need to be discounted. Therefore, denying a genuine claim on technical ground is against the principle of natural justice when in earlier years and in later years, the same had been allowed to your appellant.             b) The ld. CIT(A) ought to have appreciated that the Appellant's accounts were audited by an Accountant as prescribed u/s. 288(2) and as per the requirement of sec.80IA(7).     ....

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....ions of sub section (7) of section 80IA. The AO thus disallowed the deduction claimed by the assessee under section 80IB. The AO further disallowed the interest income of Rs.6,82,045/-, rent received of Rs.1,70,000/- and foreign exchange rate fluctuation of Rs.3,52,360/- treating the same as not arising out of the manufacturing activity of the assessee and hence not eligible for deduction under section 80IB. 3. In appeal, the ld. CIT(A) observed that so far the finding of the AO that the activity carried on by the assessee was not a manufacturing activity was not correct in view of the law laid down by the Hon'ble Supreme Court in the case of "Arihant Tiles and Marbles P. Ltd." 320 ITR 79 (SC) = (2009-TIOL-127-SC-IT-LB). The assessee also ....

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.... the ld. representatives of both the parties and also have gone through the records. At the outset, the ld. A.R. of the assessee has brought our attention to the fact that the claim of the assessee under section 80IB of the Act has consistently been allowed by the Tribunal in the past treating the assessee as a manufacturer. The findings of the Tribunal in this respect have been further upheld by the Hon'ble High Court vide orders dated 22.02.10 and 21.04.10 passed in ITA Nos.1202/09 and 1090/08 respectively. So far the rejection of the claim of the assessee for this year on the ground of non filing of audit report before the AO is concerned, the full bench of the Hon'ble Punjab & Haryana High Court in the case of "CIT vs. Punjab Financial ....

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.... before the AO and the remand report was also called from the AO. The AO had not reported anything adverse against the proof submitted by the assessee i.e. the audit report in question. In view of the law laid down by the Hon'ble Punjab & Haryana High Court in the case of "CIT vs. Punjab Financial Corporation"(supra) and the Hon'ble Gujarat High Court in the case of "Zenith Processing Mills vs. CIT" (Supra), the otherwise admissible claim of the assessee cannot be defeated for this technical reason and hence the same is accordingly allowed. 5. So far the rejection of the claim of interest income and rent received is concerned, the ld. A.R. has been fair enough to admit that the issue is covered against the assessee vide the decision of the....