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2019 (3) TMI 482 - AT - Income TaxDisallowance u/s 80IC - substantially expansion of new business - AO restricted the deduction to the extent of 25% - HELD THAT:- As decided in PR. COMMISSIONER OF INCOME TAX, SHIMLA VERSUS M/S. AARHAM SOFTRONICS [2019 (2) TMI 1285 - SUPREME COURT] in case substantial expansion is carried out as defined in clause (ix) of sub-section (8) of Section 80-IC by such an undertaking or enterprise, within the aforesaid period of 10 years, the said previous year in which the substantial expansion is undertaken would become ‘initial assessment year’, and from that assessment year the assessee shall been entitled to 100% deductions of the profits and gains. Such deduction, however, would be for a total period of 10 years, as provided in sub-section (6). For example, if the expansion is carried out immediately, on the completion of first five years, the assessee would be entitled to 100% deduction again for the next five years. On the other hand, if substantial expansion is undertaken, say, in 8th year by an assessee such an assessee would be entitled to 100% deduction for the first five years, deduction @ 25% of the profits and gains for the next two years and @ 100% again from 8th year as this year becomes ‘initial assessment year’ once again. However, this 100% deduction would be for remaining three years, i.e. 8th, 9th and 10th Assessment Years. - decided against revenue.
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