SULESHWARI TRUST,MUMBAI vs. ACIT 14(3), MUMBAI

The assessee is aggrieved by the decision of the learned CIT(A) in restricting the deduction u/s. 80IC of the Act of ` 10,59,152/-

None appeared on behalf of the assessee even though notice of hearing was sent by registered post. Hence, we proceed to dispose of the appeal ex- parte, without presence of the assessee.

We heard learned Departmental Representative and perused the record. The assessee is engaged in the business of manufacturing of deo spray. The assessee claimed deduction u/s. 80IC of the Act amounting to ` 10,59,152/- in the return of income and the same was rejected by the Assessing Officer. In 2 M/s. Suleshwari Trust the appellate proceedings, the learned CIT(A) accepted the contention of the assessee and accordingly held that deduction claimed by the assessee u/s. 80IC of the Act amounting to ` 10,59,152/-is allowed. The grievance of the assessee appears to be that the Assessing Officer has made certain additions to the business income of the assessee and hence eligible amount of deduction u/s. 80IC of the Act should be increased accordingly.

Perusal of the provisions of section 80IC would show that the deduction is allowed on the profit and gain derived by an undertaking from eligible business. If the profit and gain declared by the assessee is altered by the Assessing Officer then consequential adjustment has to be made in the amount of deduction allowable u/s. 80IC of the Act. We noticed that the learned CIT(A) has not taken cognizance of variations made by the Assessing Officer to the profit and gain of the eligible undertaking and accordingly directed the Assessing Officer to allow deduction as claimed in the return of income. In view of the discussions made above, we find merit in the claim of the assessee. Accordingly, we set aside the order passed by the learned CIT(A) and restore the same to the file of the Assessing Officer with the direction to allow deduction u/s. 80IC of the Act on the profit and gain of undertaking computed as per the provisions of the Act.

In the result, appeal filed by the assessee is treated as allowed.