SHRI PRAKASH PRABHUDAS MANDAVIA,MUMBAI vs. ACIT 13(2)NOW ACIT-17(2), MUMBAI

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ITA 555/MUM/2018Status: DisposedITAT Mumbai11 May 2018AY 2010-112 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that deduction under Section 10A should be granted on enhanced business income, following a Bombay High Court decision. The AO was directed to allow the deduction on the enhanced income.

What were the facts?

The assessee, engaged in processing computer chips, had its income enhanced during scrutiny assessment due to ad-hoc disallowances. The Assessing Officer (AO) denied deduction under Section 10A on this enhanced income.

What were the issues?

Whether deduction under Section 10A is allowable on income enhanced during assessment proceedings.

Which sections of the Income-tax Act were involved?

Section 10A,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, SMC Bench, Mumbai

Before: Shri R.C. SharmaShri Prakash Prabhudas

For Appellant: Shri Kumar Kale
For Respondent: Ms. N. Hemalatha
Hearing: 26.04.2018Pronounced: 11.05.2018

This appeal has been filed by the assessee against the order of the CIT(A)-28, Mumbai dated 10.10.2017 for A.Y. 2010-11, in the matter of order passed under Section 143(3) Income Tax Act (hereinafter “the Act”).

2.

The assessee is basically aggrieved by the order of the lower authorities declining claim of deduction under Section 10A of the Act on the income enhanced during assessment proceedings.

3.

The brief facts of the case are that the assessee is engaged in processing of computer chips and peripherals. During the course of scrutiny assessment the AO made adhoc disallowance in respect of various expenses which led to increase in assessee’s income. Further, while granting deduction under Section 10A of the Act, the AO did not allow the deduction under Section 10A on the enhanced income.

4.

The issue is squarely covered by the decision of the Hon'ble Bombay High Court reported at 330 ITR 174, wherein it was held that exemption/ deduction under Section 10A should be granted on enhanced business

Shri Prakash Prabhudas Mandavia income. Accordingly the AO is directed to give exemption/deduction under Section 10A of the Act on enhance income.

5.

In the result, the appeal filed by the assessee is allowed in terms indicated hereinabove.

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