Deduction @ 100% net profits u/s 80IC (of Income Tax Act, 1961) denied by AO was upheld by ITAT
Deduction @ 100% net profits u/s 80IC (of Income Tax Act, 1961) denied by AO was upheld by ITAT
Assesseein return claimed deduction @ 100% of net profits u/s 80IC (of Income Tax Act, 1961). AO disallowed it. AO completed assessm't at income after disallowing deduction u/s 80IC (of Income Tax Act, 1961). On appeal CIT(A) held in favor of assessee. On appeal ITAT held, issue of Sec. 80IC (of Income Tax Act, 1961) of dealings with sister concern M/s Stoneage Industrial Diamond Products was enquired by AO in detail during original assessment proceedings. Therefore, the decision taken by AO was upheld.-501515
Facts in Brief:
1. Assessee filed return claiming deduction @ 100% of the net profits under section 80IC (of Income Tax Act, 1961).
2. AO disallowed it.
3. The Assessing Officer rejecting the contention raised by the assessee completed the assessment at an income after disallowing the deduction under section 80IC (of Income Tax Act, 1961).
4. On appeal, CIT (A) allowed the appeal and held the proceedings under section 147 (of Income Tax Act, 1961) to be bad in law and quashed the same.
On appeal ITAT held,
5. We do not find any infirmity in the findings given by the learned CIT (Appeals). As amply demonstrated by he learned counsel for the assessee, the issue of section 80IC (of Income Tax Act, 1961) and specifically with regard to dealings with sister concern M/s Stoneage Industrial Diamond Products was enquired by the Assessing Officer in detail during the original assessment proceedings. Therefore, it cannot be said that this is a new issue arriving at the notice of the Assessing Officer.
6. Further, on perusal of reasons recorded, it is also seen that no new material with regard to said deduction under section 80IC (of Income Tax Act, 1961) has come in possession of the Assessing Officer after the original assessment. We observe that time and again, in his reasons recorded for reopening, the Assessing Officer is referring to the 'assessment records'.
7. This also fortifies the fact that the reopening is intended to be made only on the basis of material and record which was already there in his possession at the time of original assessment. This is not correct way of reopening. This amounts to review of order, the powers not given to the Assessing Officer under the Income Tax Act.
8. Reliance placed by the learned counsel for the assessee in the case of Kelvinator of India Ltd. (supra) in not out of place.
News Reference:Sh. Devi Parsad Gupta, Shimla vs Department Of Income Tax
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