INCOME TAX ACT, 1961

Section 80-IC

Deduction under section 80-IC - Substantial expansion within specified window period - Eligibility for 100 per cent deduction again -

Assessee was engaged in business of manufacturing of corrugated boxes. Assessee was claiming 100% deduction under section 80-IC. As per Form 10CCB, date of commencement of operation was 10-7-2007 and initial assessment year was 2008-09. AO noticed that assessment year 2014-15 was 7th year of claiming deduction under section 80-1C and assessee had claimed 100% deduction under section 80-IC for this year also. He had made substantial expansion in financial year 2011-12, on basis of which it had claimed 100% deduction during assessment year 2010-11. Thus AO restricted deduction to 25%. Held: Once assessee had started claiming deduction under section 80-IC and initial assessment year had commenced within the aforesaid period of 10 years, there could not be another initial assessment year, thereby allowing 100% deduction for the next 5 years also when sub-section (3), in no uncertain terms, provides for deduction @ 25% only for the next 5 years. After availing deduction for a period of 5 years @ 100% of such profits and gains from the 'units', assessee would be entitled to deduction for remaining 5 assessment years @ 25% as the case may be, and not @ 100%. Therefore, appeal of the Revenue was allowed.

Relied:CIT v. M/s. Classic Binding Industries (2018) 407 ITR 429 (SC) : 2018 TaxPub(DT) 5253 (SC) Mahabir Industries v. Pr. CIT (2018) 406 ITR 315 (SC) : 2018 TaxPub(DT) 2778 (SC) KP Varghese v. ITO, Ernakulam, & Anr. (1981) 131 ITR 597 (SC) : 1981 TaxPub(DT) 972 (SC) M/s. Eurolinks v. The ITO, Delhi in (ITA No. 1049/Chd/2017, dt. 18-12-2017)DistinguishedM/s. Stovekraft India and M/s. Classic Binding Industries v. CIT (2018) 400 ITR 225 (HP-HC) : 2017 TaxPub(DT) 5182 (HP-HC)

REFERRED :

FAVOUR : Against the assessee

A.Y. :

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