Case Number: ITA 665/DEL/2021
Appellant: Sudhir Kumar Gupta, New Delhi
Respondent: Pr. CIT -15, Delhi
Assessment Year: 2015-16
Case Filed On: 2021-06-07
Order Type: Final Tribunal Order
Date of Order: 2021-12-03
Pronounced On: 2021-12-03
This article discusses the details and judgment of the case ITA No. 665/DEL/2021, where Sudhir Kumar Gupta from New Delhi filed an appeal against the Principal Commissioner of Income Tax (Pr. CIT) -15, Delhi, concerning the assessment year 2015-16. The appeal was allowed regarding the deduction under Section 80IC of the Income-tax Act.
Sudhir Kumar Gupta, residing at B-123, Main Najafgarh Road, Ganesh Nagar, Delhi, filed an appeal against the order of the Principal Commissioner of Income Tax (Pr. CIT) -15, New Delhi, dated 27.03.2021. The assessment was conducted for the year 2015-16.
The appeal centers around the invocation of Section 263 of the Income-tax Act, which grants the Pr. CIT the authority to revise any order passed by the Assessing Officer (AO) if it is erroneous and prejudicial to the interests of the revenue. The Pr. CIT issued a show cause notice to the appellant, questioning the claim of deduction under Section 80IC of the Act.
The appellant had claimed a deduction under Section 80IC at 100% for substantial expansion. The AO, during the scrutiny assessment proceedings, verified and allowed the deduction. However, the Pr. CIT found the assessment order to be erroneous and prejudicial to the revenue and remanded the matter back to the AO to re-examine the evidence and the quantum of deduction allowable under Section 80IC.
The appeal was heard by the Income Tax Appellate Tribunal (ITAT) on 30.11.2021 through video conferencing. The appellant was represented by Shri Ved Jain, Advocate, and the respondent was represented by Shri H.K. Choudhary, CIT-DR.
The appellant’s counsel argued that the claim of deduction on substantial expansion had already been settled in favor of the assessee by the Hon’ble Supreme Court in the case of Arham Softronics. The counsel further contended that the AO had thoroughly examined the claim during the assessment proceedings, and the Pr. CIT should not have remanded the matter for verification of the same evidence once again.
The respondent’s counsel, on the other hand, supported the findings of the Pr. CIT and argued that the assessment order was erroneous and prejudicial to the interests of the revenue.
The tribunal, presided over by Ms. Diva Singh, Judicial Member, and Shri N.K. Billaiya, Accountant Member, reviewed the case and found that the claim of 100% deduction on substantial expansion was not new for the assessment year 2015-16. The substantial expansion had been done in the assessment year 2012-13, and the claim was allowed in the assessments for 2012-13 and 2013-14.
The tribunal noted that the AO had examined the claim during the assessment proceedings and that the appellant had provided supporting evidence to the Pr. CIT as well. The tribunal cited the Hon’ble Delhi High Court’s decision in DG Housing Projects, which held that the Pr. CIT should have recorded a categorical finding on how the assessment order was erroneous.
The tribunal referred to the Hon’ble Supreme Court’s decision in the case of Arham Softronics, which had settled the issue in favor of the assessee. The Supreme Court held that an undertaking that had undergone substantial expansion within the specified period would be entitled to a 100% deduction of profits and gains for the initial five years of expansion.
Income Tax Appellate Tribunal, Delhi ‘G’ Bench, New Delhi
Before: Ms. Diva Singh, Judicial Member, and Shri N.K. Billaiya, Accountant Member
Order:
This appeal, filed by Sudhir Kumar Gupta for the assessment year 2015-16, is directed against the order of the Principal Commissioner of Income Tax (Pr. CIT) -15, New Delhi, dated 27.03.2021. The grounds raised by the appellant concern the invocation of Section 263 of the Income-tax Act and the remanding of the matter to the AO for re-examination of the deduction under Section 80IC.
After hearing the arguments of both parties and reviewing the material on record, the tribunal found that the AO had thoroughly examined the claim during the assessment proceedings. The Pr. CIT should have recorded a categorical finding on how the assessment order was erroneous. The issue of deduction under Section 80IC had been settled in favor of the assessee by the Hon’ble Supreme Court in Arham Softronics.
The tribunal set aside the order of the Pr. CIT and restored the assessment order of the AO, allowing the deduction under Section 80IC.
Order Pronounced and Signed in Open Court on 3rd December 2021.
Signed:
Ms. Diva Singh, Judicial Member
Shri N.K. Billaiya, Accountant Member
Date: 3rd December 2021
This case highlights the importance of thorough verification of claims during assessment proceedings and the necessity for the Pr. CIT to record specific findings when invoking Section 263 of the Income-tax Act.
Sudhir Kumar Gupta vs. Pr. CIT -15, Delhi: Appeal Allowed on Deduction under Section 80IC, 2021
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