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Facts
The revenue initiated reassessment proceedings u/s 147 of the Income Tax Act, 1961, on the belief that the assessee wrongly claimed deduction u/s 80IA on a captive jetty. The AO issued a showcause notice u/s 148A of the Act, and reassessment proceedings were completed by disallowing the deduction.
Held
The CIT(A) quashed the assessment order, holding that the reopening was based on incorrect facts and without proper verification. On merits, the CIT(A) found that the assessee had been consistently claiming and allowed the deduction u/s 80IA since AY 2007-08.
Key Issues
Whether the reopening of assessment was based on erroneous facts and without new tangible material? Whether the assessee was entitled to deduction u/s 80IA on a captive jetty?
Sections Cited
143(3), 80IA, 148A, 147
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Income Tax Appellate Tribunal, “D” BENCH, MUMBAI
Before: SHRI SAKTIJIT DEY, HON’BLE & SHRI NARENDRA KUMAR BILLAIYA, HON’BLE
Assessee by : Shri Malav Sheth, A/R Revenue by : Shri Govindrao J. Ninawe, Sr. D/R सुनवाई की तारीख/Date of Hearing : 06/05/2025 घोषणा की तारीख /Date of Pronouncement: 13/05/2025 आदेश/O R D E R PER NARENDRA KUMAR BILLAIYA, AM: & 389/Mum/2025 are two separate appeals by the revenue preferred against two separate orders of the ld. CIT(A) – 49, Mumbai [hereinafter ‘the ld. CIT(A)’], dated 25/11/2024 pertaining to AY 2013-14 & 2014-15 respectively.
Since common grievance is involved in the captioned appeals, they were heard together and are disposed off by this common order for the sake of convenience and brevity.
Since the underlying facts are identical in both the appeals, we are considering the facts of AY 2013-14.
Briefly stated, the facts of the case are that the assessee filed its return of income which was selected for scrutiny assessment proceedings and accordingly assessment was framed u/s 143(3) of the Act.
I.T.A. No. 388 & 389/Mum/2025 2
Subsequently, on the basis of the revenue audit objections, stating that the assessee company has been claiming deduction u/s 80IA of the Act on captive jetty, the AO formed a belief that the income has escaped assessment by way of wrong claim of deduction u/s 80IA of the Act.
Drawing support from the decision of the Hon’ble Supreme Court in the case of UOI vs. Ashish Agarwal, the AO issued a showcause notice u/s 148A of the Act providing the information and material relied upon for initiating proceedings u/s 148A of the Act. Re-assessment proceedings were completed by disallowance of deduction claimed u/s 80iA of the Act. 6.1. The said order was challenged before the ld. CIT(A). The reopening of the assessment was challenged vehemently on the ground that no new material evidence has been brought on record and the reopening has been done on erroneous facts as the assessee never claimed any deduction u/s 80IA of the Act on captive jetty at Jamnagar. After considering the facts and the submissions and finding that the reopening was done on wrong facts, the ld. CIT(A) held that the re- opening is based on incorrect set of facts without proper verification and application of mind and accordingly quashed the assessment order. 6.1.1. On merits of the case, the ld. CIT(A) found that the assessee has been claiming deduction u/s 80IA of the Act right from AY 2007-08 and the deduction has been allowed in all the succeeding years and it is not coming from the records that there was any change in the material facts or position of law or any decision of the superior courts that could lead the AO to take a different view. On merits of the case also, the ld. CIT(A) also allowed the deduction u/s 80IA of the Act.
I.T.A. No. 388 & 389/Mum/2025 3
Before us, the ld. D/R strongly supported the findings of the AO. The ld. Counsel for the assessee reiterated what has been stated before the lower authorities.
We have given a thoughtful consideration to the orders of the authorities below. The reasons for reopening the assessment reads as under:-