DCIT, DEHRADUN vs. KUMAR AUTO SALES, DEHRADUN

This appeal by the Revenue is preferred against the order of the Commissioner of Income Tax [Appeals], Dehradun dated 06.01.2015 pertaining to A.Y 2011-12.

The only grievance of the Revenue is that the ld. CIT(A) erred in deleting the addition on account of disallowance u/s 80IC of the Income-tax Act, 1961 [hereinafter referred to as 'the Act'] ignoring the fact that the activities of the assessee do not fall in the definition of ‘manufacturing’ as established by the AO.

While scrutinizing the return of income for the year under consideration, the AO noticed that the assessee has claimed deduction u/s 80IC of the Act. The AO was of the opinion that the activities of the assessee do not fall within the definition of ‘manufacturing’ and hence not eligible for deduction u/s 80IC of the Act.

During the course of assessment proceedings itself, it was brought to the notice of the AO that the Tribunal in earlier A.Y vide order dated 27.08.2013 in and 4762/MUM/2012 for A.Y 2009-10 has allowed the claim of deduction. The AO rubbished the claim of the assessee by holding that the department has not accepted the decision of the Tribunal and, therefore, the claim cannot be allowed.

Before us, the ld. AR brought to our notice the judgment of the Hon'ble Bombay High Court in Tax Appeal No. 709 & 972 of 2014 and pointed out that the Hon'ble High Court has dismissed the Revenue’s appeal for A.Ys 2007-08 and 2009-10. The ld. AR further pointed out that in the subsequent A.Y i.e. 2014-15, the AO himself has allowed the claim of deduction u/s 80IC of the Act following the judicial judgment of earlier years.

The ld. DR could not bring any distinguishing decision in favour of the Revenue.

Respectfully following the previous judicial judgment in favour of the assessee and on finding no contrary decision, we decline to interfere.

In the result, the appeal of the Revenue in is dismissed.