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The Tax Publishers2019 TaxPub(DT) 1378 (Chd-Trib) INCOME TAX ACT, 1961
Section 80-IC
In view of provisions of third proviso to section 80-IC in case of substantial expansion of business undertaking for first five years' deduction under section 80-IC is available at the rate of 100% and thereafter at the rate of 25%, therefore, in assessee's ninth year of operation, the deduction under section 80-IC would only be allowed at the rate of 25%, instead of 100% as claimed by assessee.
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Deduction under section 80-IC - Quantification - Ninth year of operation vis-Ã -vis expansion of undertaking -
Assessee-proprietor was engaged in business of manufacturing and trading in EPS Thermocole Moulded Packaging Disposal Glass and BOPP Tapes. His initial assessment year for claim of deduction under section 80-IC was assessment year 2005-06. He already claimed deduction under section 80-IC to the extent of 100% eligible profit for five years' period from assessment years 2005-06 to 2009-10. He again claimed 100% deduction against eligible profit in the relevant assessment year 2013-14, which was ninth year of production by claiming substantial expansion of the unit in assessment year 2009-10. Held: Section 80-IC provides for 100% deduction on profits for five assessment years commencing with 'initial assessment year' and, thereafter, 25% (or 30% where the assessee is a company) of profits and gains. Therefore, it was absolutely clear that in case of new undertaking or in case of substantial expanded undertaking deduction would be allowable @ 100% only for first five years and thereafter it was only 25%. Hence, assessee's claim of availing deduction @100% during the relevant assessment year was rejected as he had already availed of the period of full deduction @ 100% in the earlier five years, i.e., from assessment years 2005-06 to 2009-10.
Relied:Hycron Electronics & Ors. v. Income Tax Officer & Ors. [ITA No. 798/CHD/2012, dt. 27-5-2015] : 2015 TaxPub(DT) 2810 (Chd-Trib)
REFERRED :
FAVOUR : Against the assessee
A.Y. :
IN THE ITAT, CHANDIGARH BENCH
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