ITAT Remands Issues on Section 80JJAA, Cold Storage Subsidy and 80IB Deduction for Fresh Verification:

ITAT Remands Issues on 80JJAA, Cold Storage Subsidy and 80IB Deduction for Fresh Verification Innovative Cuisine Pvt. Ltd., engaged in the business of quick-frozen vegetables and fruits primarily for export, filed its return for AY 2017-18, declaring taxable income of Rs. 13.02 crore. The assessment was selected for complete scrutiny with three major additions, disallowance of the 80JJAA deduction of Rs. 56.56 lakh, treating the NHB cold storage subsidy of Rs. 78.23 lakh as revenue income, and reducing the 80IB deduction by Rs. 21.83 lakh on the ground that duty drawback receipts were not fully excluded. The assessee's total income being Rs. 15.09 crore, as per the assessment. In appeal, the NFAC upheld the AO’s order, but the assessee challenged the findings before the ITAT. Issue Raised: Whether the additions relating to 80JJAA deduction, capital subsidy treatment, and 80IB computation were justified in the absence of proper verification and supporting evidence, and whether the matter required restoration for fresh examination. ITAT's Decision: The Tribunal found that the AO and CIT(A) had not properly verified the assessee’s detailed claims. Regarding the 80JJAA deduction, it noted that the assessee furnished documents for only 15 new employees while the claim involved 274 employees. As many employees appeared to have worked less than 240 days, making them ineligible, the AO’s blanket disallowance was not justified. The Tribunal accepted that the subsidy was sanctioned specifically for a capital project but observed that the assessee had not furnished its capital work-in-progress ledger or evidence of its accounting treatment; thus, the issue required fresh factual verification. The Tribunal restored the issue relating to the 80IB deduction, directing the assessee to fully substantiate its claim. All three issues were thus remanded to the AO, and the appeal was partly allowed. To Read Full Judgment, Download PDF Given Below