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2015 (7) TMI 481 - HC - Income TaxEntitlement to deduction under Section 80IB - Tribunal held that the Financial Year 1994-95 relevant to Assessment Year 1995-96 constituted the initial Assessment Year and accordingly, the appellant was not entitled to deduction under Section 80IB - whether assessee had begun to manufacture or produce articles on commercial basis in the Financial Year 1994-95 (relevant to Assessment Year 1995-96) or in the Financial Year 1995-96 (relevant to Assessment Year 1996-97)? - Held that:- In the matter on hand, even before the products were sold to the group companies in the month of March' 1995, the machines were exhibited in public at New Delhi. As aforementioned, there was lot of appreciation for the machines and in fact during the exhibition, bookings took place. The assessee could have as well sold the products to the third parties viz. intending buyers. However, instead of doing so, the assessee chose to sell the machines to its group companies. Therefore, it cannot be said that the machines were not available for sale. Merely because the assessee has sold three (3) machines to its group companies, it cannot be said that there was no commercial transaction. In the matter on hand, admittedly the three (3) machines were sold by the assessee, of course, to its group companies for consideration. Hence, it cannot be said that the machines were manufactured only on trial basis and not for commercial purposes in the Financial Year 1994-95 relevant to Assessment Year 1995-96. Tribunal was right holding that the appellant was not entitled to deduction under Section 80IB - Decided in favour of revenue.
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