NCLAT: Can’t Dismiss Restoration App. if Filed in 30 Days from Date of Dismissal of Original App.  ||  Delhi HC: Communication between Parties through Whatsapp Constitute Valid Agreement  ||  Delhi HC Seeks Response from Govt. Over Penalties on Petrol Pumps Supplying Fuel to Old Vehicles  ||  Centre Notifies "Unified Waqf Management, Empowerment, Efficiency and Development Rules, 2025"  ||  Del. HC: Can’t Reject TM Owner’s Claim Merely because Defendant Could have Sought Removal of Mark  ||  Bombay HC: Cannot Treat Sole Director of OPC, Parallelly with Separate Legal Entity  ||  Delhi HC: Can Apply 'Family of Marks' Concept to Injunct Specific Marks  ||  HP HC: Can’t Set Aside Ex-Parte Decree for Mere Irregularity  ||  Cal. HC: Order by HC Bench Not Conferred With Determination by Roster is Void  ||  Calcutta HC: Purchase Order Including Arbitration Agreement to Prevail Over Tax Invoice Lacking it    

DCIT vs. M/s.Chiripal Industries Ltd. - (Income Tax Appellate Tribunal) (15 Sep 2021)

Where eligible enterprise has been transferred, the transferee company i.e. amalgamated company will become entitled to deduction under Section 80IA of IT Act

MANU/IB/0182/2021

Direct Taxation

Assessee is engaged in the activity of Power Generation. It has filed return of income on declaring total income at Rs.14,81,15,160/- after claiming deduction of Rs.2,74,36,139/- under section 80IA of the Act. The case of the assessee was selected for scrutiny assessment. AO observed that the assessee has shown total value of the machinery and plant used for its activity at Rs.766.64 lakhs, of which Rs.711.23 lakhs was of old plant & machinery belonged to erstwhile concern i.e. Shanti Processor Ltd. installed prior to 01.04.2005. In other words, according to the AO, the plant set up by the assessee was not new power plant, but it was set up by transfer of old and previously used machinery, value of which was more than 90% of the total value of plant. Therefore, claim of the assessee under section 80IA was not allowable. Accordingly, AO has disallowed claim of deduction of Rs.2,74,36,169/- under section 80IA(4) of the Act and added to the income of the assessee.

Aggrieved, assessee went in appeal before the First appellate authority. CIT(A), after detailed analysis of the issue and after following decisions of his predecessor in the assessee’s own case on identical issue, allowed claim of the assessee and deleted the addition. Dissatisfied with order of the CIT(A), the Revenue has filed present appeal.

In this case, after going through the previous orders of ITAT on similar issues, it can be concluded that when any undertaking of an Indian Company which is entitled to deduction under this Section 80IA of IT Act is transferred before expiry of the period specified in this section to another Indian Company, then as per clause (b) the provision of this sections shall apply to the amalgamated company, as they would have applied to the amalgamating company. In other words, the provision makes it clear that ambit of this section is extended to the cases where eligible enterprise is transferred. In such cases, the transferee company i.e. amalgamated company will become entitled to deduction.

Thus, CIT(A) rightly appreciated the facts both on facts and in law as well as weighed earlier decisions of his predecessor and allowed the claim of deduction under section 80IA. Therefore, order of the CIT(A) upheld and appeal of the Revenue dismissed.

Tags : DEDUCTION  

Share :        

Disclaimer | Copyright 2025 - All Rights Reserved