2017 (1) TMI 1326

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....ion u/s 80IC and one unit located at Bommasandra (Bangalore) does not enjoy any tax benefit. Further, he also observed that the assessee has filed the original return of income on 30.03.2011 only and as per the provisions of section 80AC of the Act, the assessee has to file the return of income within the prescribed time limit u/s 139(1) of the Act, which in this case happens to be 13.09.2009 if it wants to avail the benefit of deduction u/s 80IC of the Act. Observing that the assessee has filed the return of income only on 30.03.2011, the assessee was asked to explain as to how it was eligible for the benefit of deduction. The assessee stated that it has filed the original return within the prescribed time limit u/s 139(1) and that the revised return was filed on 30.03.2011. However, on verification of the computerized data, the AO found that there was no such original return filed, as claimed. Therefore, he held that the assessee is not eligible for deduction u/s 80IC of the Act. 3. Without prejudice to the above finding, the AO also observed that for being eligible for deduction u/s 80IC of the Act, the assessee should manufacture any article or thing. He also observed that sim....

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....O, the assessee had placed reliance upon the decision of the Tribunal at Bangalore in the case of Shri Anil H Lad vs. DCIT in ITA No.1262/bang/2010 dated 7.01.2011 on the ground that there is no need for such set off. The AO however, held that the case is covered by the decision of the Tribunal at Hyderabad in the case of Hyderabad Chemical Supplies Pvt Ltd and therefore, he held that the loss of the earlier years is to be reduced from the profit of the current year before allowing the deduction u/s 80IC. 6. Aggrieved by these findings of the AO, the assessee filed an appeal before the CIT (A) along with the evidence that the original return of income was filed within the stipulated time u/s 139(1) of the Act. The CIT (A) called for a remand report from the AO and vide report dated 21.01.2013, the AO accepted that the assessee has produced necessary evidence that it has filed the return of income on 30.09.2009 and that the same is within the time and that the revised return filed on 31.03.2011 may be accepted. The CIT (A), thereafter, accepted that allocation of the profit attributable to smaller components which were part of sales kit were not eligible for deduction u/s 80IC. The....

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....ssessee has satisfied the condition for claiming deduction u/s 80IC. Therefore, we do not see any reason to interfere with the findings of the CIT (A) on this issue and the Revenue's ground of appeal No.4 is rejected. 9. Further, as regards the computation of deduction u/s 80IC of the Act, we find that the assessee has accepted that the profit attributable to smaller components of the sale kit is not eligible for deduction u/s 80IC of the Act and has worked out the disallowance at Rs. 80.00 lakhs and accordingly apportioned it amongst the three eligible units. The Revenue is challenging the said allocation on the ground that the AO has not been given an opportunity to verify the said allocation. We find that during the assessment proceedings itself, the assessee had given the computation, but the AO has not gone into the said computation and the allocation on the ground that the assessee is not eligible for deduction u/s 80IC as it has filed the return after the stipulated time u/s 139(1). Therefore, we remit the issue of computation of allocation of both the common expenditure and also the profit attributable to the smaller components of the eligible unit to the AO for verificati....

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....ses and depreciation of business even though they have been allowed set off against other income in earlier years has been dealt by the Special Bench in the case of ACIT Vs. Gold Mine Shares & Finance (P) Ltd. (113 ITD 209) (SB) (Ahmadabad) and decide the issue against the assessee. While delivering this order, the Special Bench considered all the arguments what the assessee has placed before us. The Tribunal also considered the judgment in the case of Mewar Oil & General Mills Ltd. (supra ) and observed that this case has not noticed the non obstante provisions of section 80I(6)/80IA(5) and, therefore, there is no discussion on this point in that decision. It would similarly, therefore, be not of any help to us. The Tribunal also considered the decision cited by the assessee in the case of Mohan Breweries & Distilleries Ltd. (116 ITD 241) (Chennai) (supra) and observed that what it decided in that case is that the deduction is allowed u/s 80IA for 10 out of 15 years at the option of the assessee which means any ten years not necessarily the beginning of 10 years. Finally it was observed that this case has no relevance in deciding the issue in this case of the assessee because the ....