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2016 (3) TMI 498 - ITAT MUMBAI

2016 (3) TMI 498 - ITAT MUMBAI - TMI - Deduction u/s 80IC rejected - claim of the assessee rejected on the ground that the assessee has established the unit at Baddi by reconstruction of the existing unit - Held that:- The assessee has furnished the details of employees, electricity bills and water bills issued by The Himachal Pradesh State Industrial Development Corporation Ltd. The assessee has also furnished the letter issued by the Deputy Director of Industries, Baddi, Dist. Solan (H.P) allo .....

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JM For The Appellant : Shri K Gopal For The Respondent : Shri Ganesh Bare ORDER Per B R Baskaran, AM: The assessee has filed this appeal challenging the order dated 28.10.2011 passed by Ld CIT(A)-39, Mumbai for assessment year 2008-09 confirming the order of the AO rejecting the claim for deduction u/s 80IC made by the assessee. 2. The facts relating to the issue are stated in brief. The assessee is engaged in the business of manufacture of fuel additives. Initially it was having manufacturing u .....

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of existing business, which is in violation of provisions of sec. 80IC(4)(i) of the Act. 3. The Ld CIT(A) noticed that the assessee had claimed deduction u/s 80IB of the Act for assessment years 2004-05 to 2007-08 and the said claim was rejected on the reasoning that the undertaking was set up by transfer of old machineries. The Ld CIT(A) further noticed that the assessee has accepted the orders of the AO in the above said years. The Ld CIT(A) accordingly held that the shifting of entire busines .....

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chinery by at least fifty percent of the book value of plant and machinery (before depreciation in any year), as on the first day of the previous year in which the substantial expansion is undertaken. The Ld A.R submitted that the book value of Plant and Machinery that were available with the assessee as on 1.4.2007 was ₹ 30.50 lakhs and the assessee has invested a sum of ₹ 103.17 lakhs in purchasing of new machineries during the financial year 2007-08 relevant to the assessment year .....

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ategory States. 80-IC. (1) Where the gross total income of an assessee includes any profits and gains derived by an undertaking or an enterprise from any business referred to in sub-section (2), there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction from such profits and gains, as specified in sub-section (3). (2) This section applies to any undertaking or enterprise,- (a) which has begun or begins to .....

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ustrial Estate or Industrial Park or Software Technology Park or Industrial Area or Theme Park, as notified by the Board in accordance with the scheme framed and notified97 by the Central Government in this regard, in the State of Sikkim; or (ii) on the 7th day of January, 2003 and ending before the 1st day of April, 2012, in any Export Processing Zone or Integrated Infrastructure Development Centre or Industrial Growth Centre or Industrial Estate or Industrial Park or Software Technology Park o .....

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heme Park, as notified97 by the Board in accordance with the scheme framed and notified by the Central Government in this regard, in any of the North-Eastern States; (b) which has begun or begins to manufacture or produce any article or thing, specified in the Fourteenth Schedule or commences any operation specified in that Schedule, or which manufactures or produces any article or thing, specified in the Fourteenth Schedule or commences any operation specified in that Schedule and undertakes su .....

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terprise which fulfils all the following conditions, namely:- (i) it is not formed by splitting up, or the reconstruction, of a business already in existence : Provided that this condition shall not apply in respect of an undertaking which is formed as a result of the re-establishment, reconstruction or revival by the assessee of the business of any such undertaking as is referred to in section 33B, in the circumstances and within the period specified in that section; (ii) it is not formed by th .....

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ng, not being any article or thing specified in the Thirteenth Schedule and undertakes substantial expansion during the period beginning..... 7. There is no dispute with regard to the fact that the article or thing manufactured by the assessee does not fall under Thirteenth Schedule. There is also no dispute that the assessee is manufacturing or producing an article or thing. Hence, the assessee should be eligible for deduction u/s 80IC of the Act, if it undertakes substantial expansion. The det .....

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