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2015 (5) TMI 512 - AT - Income TaxDeduction under section 80IB denied - value of plant and machinery of the assessee company having been exceeded to ₹ 5 crores, it was not a SSI (Small Scale Industrial) Unit eligible for claiming deduction under section 80IB - Held that:- The common issue involved in the present appeals thus is squarely covered in favour of the assessee by the decision of the Hon’ble Karnataka High Court in the case of M/s. Ace Multi Axes Systems Ltd.[2014 (8) TMI 596 - KARNATAKA HIGH COURT] wherein held that as keeping in mind the industrial growth which is required to be achieved, if two interpretations are possible, the courts have to lean in favour of extending the benefit of deduction to an assessee who has availed the opportunity given to him under law and has grown in his business. Therefore we are of the view, if a small scale industry, in the course of 10 years, stabilizes early, makes further investments in the business and it results in it's going outside the purview of the definition of a small scale industry, that should not come in the way of its churning benefit under Sec.80lB for 10 consecutive years from the initial assessment year. In the present case the appellant was first recognized as a permanent SSI Unit in the year 1992 and at the time of recognition the investment limit was ₹ 60 lakhs. Thereafter, it was increased to ₹ 3 crores in the year 1997 and later in the year 1999 it was reduced back to ₹ 1 crore and clarifications were given by the Ministry concerned that where the units have taken steps for implementation of their project and investment exceeded ₹ 1 crore in the years 1997 and 1998, they should continue to be regarded as SSI Units. It is only after formation of a new agency by name Micro, Small and Medium Enterprises, under the Ministry of Industries, in the year 2006 the investment limit was fixed at ₹ 5 crores. As over the years, they are running their unit adhering to the norms fixed by the Government from time to time and, in any case, when all the conditions stipulated for SSI Units are being followed by them and recognized as SSI Unit by the prescribed authority, they cannot be disallowed the deduction under section 80IB of the Act - decided in favour of assessee.
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