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2019 (9) TMI 864 - AT - Income TaxDeduction u/s 80-IE - fresh claim after substantial expansion - assessee had earlier claimed deduction u/s 80IB and also u/s 10C - HELD THAT:- The assessee availed benefit of Income Tax exemption in terms of Sec. 80-IA and 80IB and 10C in the earlier assessment years and availed benefit of exemption under Chapter VIA of the Income Tax Act 1961 and after undergoing substantial expansion of its existing plant and machinery and production capacity by investing more than 25 % of its existing capital investment in terms of NEIIP,2007 in the Financial Year 2008-09. The other one M/s. Charu Innovation Department and Industries, a new Industrial Undertaking, established in the year 2011-12 and commenced its commercial production w.e.f 23.11.2011, engaged in production of polyethylene Water Storage Tank and other plastic articles such as, Dustbin, Traffic Signal Point and injunction moulded Item and moulded filter etc. We note that after implementation of North-East Industries Investment Promotion Policy (NEIIP), 2007, the Assessee undergone modernization of its unit M/s. Charu Engineering Industries, in the year 2008, w.e.f 02.05.2008 by additional capital outlay in plant & machinery amounting to ₹ 29,85,611/- in comparison to the previous capital outlay in plant & machinery (i.e prior to the expansion/ modernization) ₹ 22,51,982/-, an increase in capital outlay by 133 % of the initial capital outlay in the financial year 2008-09. Therefore, the Assessee is eligible for income tax exemption from the Financial year 2008-09 and onwards due to modernization in its plant & machinery by infusing additional capital investment by more than 25 % of the initial investment in plant & machinery as envisaged in clause (iii) of sub-sec. 7 of Sec. 80-IE of the Income Tax Act, 1961, effective from 01.04.2008.We note that the purpose of section 80IE was to establish the business of the nature specified in the said provision in the specified States. This provision was, thus, aimed at encouraging the undertakings or enterprises to establish and set up such units in the aforesaid States to make them industrially advanced States as well.Hence, we note that assessee is entitled to claim deduction under section 80IE We note that assessee is entitled to deduction under section 80IE with respect to its above industrial undertakings M/s. Charu Engineering Industries & Ms. Charu Innovation Department and Industries - Decided in favour of assessee.
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