INCOME TAX ACT, 1961

Section 80-IC

Deduction under section 80-IC - Allowability - AO doubted machinery available, electric consumption and evidences produced for movement of goods - Year under consideration not being the first year of claim

Assessee claimed deduction under section 80-IC. AO disallowed deduction on the ground that machinery available with assessee did not support claim of assessee, electic consumption could not support the claim of quantum of production; and evidences produced by assessee for movement of goods were insufficient to support the claim in absence of toll tax receipts. Held: Year under consideration was not the first year of the claim of deduction under section 80-IC, therefore, issue of machinery and installation of power meters were already examined by AO in the initial years and there was no objection by revenue on granting deduction under section 80-IC to assessee on these two issues in earlier years. Thus, AO could not have raised the issue of non-availability of machinery during the concerned year as original machinery installed at the time of set-up had not been transferred by assessee. Further, with respect of transportation of goods, only reason mentioned by AO was that assessee could not produce toll tax receipt. However, AO himself admitted that assessee had provided VAT Form 26A which showed that trucks crossed Himachal Pradesh Haryana Border at Bahral Check-post. In Form No. 26A, under VAT laws, there was a complete detail of goods transported, lorry numbers, quantity of goods, time of removal from factory of those goods, etc. In view of this, there was no merit in order of AO disallowing the deduction under section 80-IC.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2014-15

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