PRINCIPAL COMMISSIONER INCOME TAX, SURAT -1 vs. M/S SANIDHYA

C/TAXAP/827/2019 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 827 of 2019 ================================================================ PRINCIPAL COMMISSIONER INCOME TAX, SURAT -1 Versus M/S SANIDHYA ================================================================ Appearance: MRS KALPANAK RAVAL(1046) for the Appellant(s) No. 1 for the Opponent(s) No. 1 ================================================================ CORAM: HONOURABLE MR.JUSTICE J.B.PARDIWALA and HONOURABLE MR. JUSTICE BHARGAV D. KARIA

Date : 03/02/2020

ORAL ORDER (PER : HONOURABLE MR.JUSTICE J.B.PARDIWALA) 1. This Tax Appeal under Section 260A of the Income Tax Act, 1961 (for short, 'the act, 1961') is at the instance of the Revenue and is directed against the order passed by the Income Tax Appellate Tribunal, Surat dated 17.05.2019 in the ITA No. 417/SRT/2018 for the A.Y. 2013-14. 2. The Revenue has proposed following four questions of law for the consideration of this Court : “(a) Whether on the facts and in the circumstances of the case and in law, the Tribunal is correct in setting aside the order u/s 263 of the Act even when the assessment order passed by A.O. Is erroneous in so far as it is prejudicial to interest of revenue? Page 1 of 3

C/TAXAP/827/2019 ORDER (b) Whether on the facts and in the circumstances of the case and in law, the Tribunal is correct to allow the claim of the deduction u/s. 80IB of the Act without appreciating that the A.O. had failed to undertake inquiry and verification during the original assessment?” (c) Whether on the facts and in the circumstances of the case and in law, the Hon'ble ITAT's order is correct when in fact the deduction u/s 80IB(10) of the I.T. Act should be based on total income to be computed as per the provisions of Sec 29 to 43D of the Act, after allowing all eligible deductions whether made or claimed suo-moto by the assessee or not? (d) Whether on the facts and in the circumstances of the case and in law, the Hon'ble Tribunal is correct in applying the rule of consistency even when the assessee has failed to support its claim of deduction u/s 80IB(10)?” 3. The questions of law as proposed by the Revenue stand squarely covered by the decision of this Court in the case of Principal Commissioner of Income Tax vs. Alidhara Taxspin Engineers & Anr. rendered in the Tax Appeal No.265 of 2017 dated 2nd May, 2017. We quote para-4 of the said decision; “We have heard Shri Sudhir Mehta, learned advocate appearing on behalf of the revenue. On interpretation of the partnership agreement and considering the wish of the partners reflected in the partnership deed, not to pay/charge interest on the partners capital and the remuneration, the learned tribunal has rightly deleted the disallowance made by the Assessing Officer with respect to the deduction claimed under Section 80IB of the Income Tax Act. As rightly observed by the learned tribunal, mere Page 2 of 3

C/TAXAP/827/2019 ORDER incorporation of interest on the partners’ capital and remuneration does not signify that the same are mandatory in nature. We concur with the view taken by the learned tribunal. We see no reason to interfere with the impugned judgment and order passed by the learned tribunal. No substantial questions of law arise in the present Tax Appeal. The present Tax Appeal deserves to be dismissed and is accordingly dismissed.” 4. This Court had the occasion to consider Alidhara Taxspin Engineers (supra) while deciding a batch of appeals being Tax Appeal Nos.165 of 2019 to Tax Appeal Nos. 168 of 2019, decided on 24th June, 2019. 5. Applying the dictum as laid in Alidhara Taxspin Engineers (supra), we are in complete agreement with the findings recorded by the Tribunal in the impugned order. In such circumstances, referred to above, in our opinion, none of the questions, as proposed, could be termed as the substantial questions of law involved in the present tax appeal. 6. In the result, the tax appeal fails and is hereby dismissed. (J. B. PARDIWALA, J) (BHARGAV D. KARIA, J) KUMAR ALOK Page 3 of 3