Home Income tax Corporate Income tax Calcutta HC Rejects I-T Dept’s Attraction Regarding Low Tax Results

Calcutta HC Rejects I-T Dept’s Attraction Regarding Low Tax Results

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Calcutta HC Rejects I-T Dept’s Attraction Regarding Low Tax Results
Calcutta HC’s Order for M/S. Deepak Industries Ltd

The Calcutta Excessive Court docket has rejected the attraction submitted by the Revenue Tax Division regarding low tax results.

A two-member bench comprising Chief Justice T.S. Sivagnanam and Justice Ajay Kumar Gupta has famous that the combination tax was beneath Rs. 1 crore, which the Central Board of Direct Taxes (CBDT) units the edge restrict.

The division/appellant questioned whether or not the Revenue Tax Appellate Tribunal (ITAT) made an error by making use of the consistency rule with out conducting TP proceedings for earlier AYs and whether or not it failed to acknowledge the substantial distinction in profitability between eligible and non-eligible items whereas permitting a deduction beneath Part 80IC.

The respondent/assessee argued that for the reason that tax influence within the present case is beneath Rs. 1 crore which is Rs. 65,05,587, the division can’t proceed with this attraction as a result of low tax impact.

Learn additionally: All About Part 80IAC and Its Affect on Startups in India

The court docket noticed that the deduction beneath Part 80IC, calculated at 30% of the revenue, quantities to Rs. 2,13,11,566, in distinction to the assessee’s claimed quantity of Rs. 4,10,25,466. Contemplating the figures would certainly end in a tax impact beneath the Rs. 1 crore threshold. Nonetheless, the Commissioner of Revenue Tax (Appeals) order signifies the tax quantity as Rs. 1,03,10,590.

The court docket established that the tax quantity talked about in CIT(A)’s resolution, i.e., Rs. 1.03 crores, is a computational error.

The overall tax legal responsibility is Rs. 80,05,462/-. Consequently, it’s evident that the tax impact on this case falls beneath the edge set by the CBDT. Due to this fact, the court docket concluded that the income can’t pursue this attraction.

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