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2015 (11) TMI 791 - AT - Income TaxEntitlement to deduction u/s 80 IC - initial assessment year - Held that:- From the meaning of ‘Initial assessment year' it can be seen that whenever any undertaking or the enterprise begins its commercial manufacturing and production of articles it comes under the purview of Section 80IC of the Income Tax Act, 1961. Though, the assessee company has shown the pre-operative expenditure in respected of its Dehradun Unit & claimed that it was under trial run and there was no commercial production took place during the year, but the facts are different altogether. In fact, the assessee since the beginning of the said unit/plant was taking purchase orders from various parties and complying with the said purchase orders in the usual manner and there was no defect or complaint made by the purchasers at any point of time Delhi High Court in case of CIT vs. Nestor Pharmaceuticals (2009 (12) TMI 215 - DELHI HIGH COURT) clearly mentioned the difference between trial production and commercial production. The instance of the sale along with the documentary evidence clearly shows in the present case that, though the assessee is claiming the activity of Dehradun Unit as a trial production, the same is not at all a trial production but the commercial production from December 2003 onwards. Selling the product to particular parties continuously also shows that it is a commercial production and not of a trial production. The case laws submitted by the assessee are on different footings and was rightly distinguished by the DR. Thus, the first ground of the Revenue is sustained and the Ld. CIT(A)'s order is set aside to that effect. As relates to the second ground, the same is consequential and the AO is directed to determine the deduction u/s 80HHC of the Income Tax Act, 1961 for the A.Y 2004-05. - Decided in favour of revenue.
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