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Income Tax Appellate Tribunal, “C” BENCH: KOLKATA
Before: Shri Rajesh Kumar & Shri Sonjoy Sarma]
This is an appeal preferred by the revenue against the order of the Commissioner of Income Tax(Appeals)-3, Kolkata [hereinafter referred to as ‘CIT(A)’] dated 24.07.2019 for the assessment year 2011-12.
The only issue raised by the revenue is against the order of Ld. CIT(A) allowing the deduction u/s 80IB of the Income Tax Act, 1961 (hereinafter referred to as the Act) which was rejected by the AO on the ground that the project is not eligible for deduction u/s 80IB of the Act.
Facts in brief are that the assessee is in the business of development of real estate projects and mainly derives income from sale of flats. During the year the assessee claimed deduction u/s 80IB of the Act to the tune of Rs. 1,88,01,946/- qua its project namely Binayak Enclave at 59, Kalicharan Ghosh Road, Kolkata. The assessee for the first time claimed deduction in respect of this project in AY 2003-04 which was allowed by the AO after due verification and enquiry. However during the M/s Karb Associates Pvt. Ltd.
year the AO rejected the claim of the assessee u/s 80IB of the Act on the ground that similar claim of deduction was rejected in AY 2012-13, 2013-14 and 2014-15.
In the appellate proceedings the Ld. CIT(A) allowed the appeal of the assessee by recording a finding a fact that similar issue has been decided in AY 2013-14 in appeal no. 10277/CIT(A), Kolkata-3/16-17/1122-28 order dated 11.07.2019 by observing that the deduction in the initial/first year in AY 2003-04 has been allowed after due verification by the AO and was also allowed in AY 2004-05 and 2005-06. While allowing the appeal of the assessee , the Ld. CIT(A) also referred to the decisions in the case of Paul Brothers (1995) 216 ITR 548, Simple Food Product Pvt. Ltd. in & 39/2010 (Nagpur) & Dinshaw Frozen Food Ltd. in ITA No. 32 of 2003, Nagpur dated 29.09.2007 wherein it has been held by the Hon’ble Courts that once the deduction is allowed in the initial year then the revenue cannot deny the same in the subsequent years.
After hearing the rival parties and perusing the impugned appeallte order passed by the ld CIT(A) ,we note that that the appeal of the assessee has been allowed by ld CIT(A) by holding that Act on the ground that deduction was allowed in the initial year i.e. AY 2003-04 after carrying due verification and enquiry and Similar deduction was allowed in AY 2004-05 & 2005-06. The Ld. CIT(A) has also recorded a finding a fact that deduction allowed in AY 2003-04, 2004-05 and 2005-06 have not been disturbed and therefore the deduction claimed in the subsequent year cannot be rejected by following the ratio as laid down in decisions of various by various High Courts namely Paul Brothers (supra), Simple Food Product Pvt. Ltd. (supra) & Dinshaw Frozen Food Ltd. (supra) as discussed in the appellate order. Accordingly we are inclined to uphold the same by dismissed the appeal of the revenue.
M/s Karb Associates Pvt. Ltd.
In the result, the appeal of the revenue is dismissed.
Order is pronounced in the open court on 13th May, 2022