This article examines ITA No. 300/DEL/2019, where MNC HERS challenged the CIT(A)’s decision restricting their claim for 100% tax deduction under Section 80 IC of the Income Tax Act, citing substantial expansions.
MNC HERS, based in New Delhi, appealed against the order of CIT(A)-12 which upheld the AO’s restriction of tax deductions to 25% despite the appellant’s claim for 100% due to substantial expansions during the assessment year 2012-13.
The case unfolded over several grounds of appeal, with the key issue revolving around the eligibility for a 100% deduction. Initially, the AO, influenced by precedents set by the Chandigarh Bench, limited the deduction. The CIT(A)’s agreement with this limitation led MNC HERS to escalate the matter to the ITAT.
The Tribunal examined the contention under the amended provisions of the Income Tax Act, which MNC HERS argued made them eligible for the claimed deductions due to their substantial expansions. Reference was made to significant judgments by the Supreme Court, which ultimately supported the appellant’s position.
Respectfully following Supreme Court precedents, the ITAT directed the AO to allow MNC HERS’s claim for a 100% deduction. This decision underscores the importance of judicial consistency and the impact of higher court rulings on tax tribunal decisions.
The case of MNC HERS vs ACIT highlights the critical role of substantial expansions in qualifying for enhanced tax deductions and the evolving interpretations of related legal provisions. It serves as a precedent for similar cases and offers significant insights into the application of judicial precedents in tax-related disputes.
Substantial Expansion Claims in Tax Deductions: MNC HERS vs ACIT, New Delhi (ITA 300/DEL/2019)
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