Quiz for the week (26 Feb 2024):
Girish (P) Ltd was incorporated on 10.6.2010. It reports following incomes for the year ended 31st March,2024:
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(i)
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Profit from operating toll road in
Tamil Nadu. (Operating since June, 2016)
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Rs.11,00,000
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(ii)
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Profit from effluent treatment
plant in Industrial Estate in Maharashtra. (Operating since April, 2015)
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Rs.8,00,000
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(iii)
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Profit from operating and
maintaining industrial park in Karnataka. It was established, operated and
owned by Jay Ltd since April,2010. Acquired by Girish (P) Ltd in April,2019.
Jay Ltd had not claimed any deduction in respect of this income up to the
year ended 31st March, 2019.
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Rs.7,50,000
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(iv)
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Loss from textile machinery
manufacture at Coimbatore. Operating since incorporation.
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5,25,000
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Compute the total income for the assessment year 2024-25 with supporting reasons for your working.
Answer :
The assessee Girish (P) Ltd has got multiple business activities and the requirement is to compute the
total income for the assessment year 2024-25 which is as under:
Computation of total income of Girish (P) Ltd for the Asst.Year 2024-25
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Profit from operating toll road in
Tamil Nadu. (Operating since June, 2016).
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11,00,000
|
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The assessee is eligible for 80-IA
deduction for any 10 consecutive assessment years out of 20 years beginning
from the year in which the enterprise begins to operate any infrastructure
facility which includes toll road. It is stated that the assessee has been
operating from June 2016 which is much before the cutoff date of 31.03.2017. Therefore,
it is eligible for 100% deduction under section 80-IA for the previous year
ended 31.03.2024.
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|
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Profit from effluent treatment
plant in Industrial Estate in Maharashtra. (Operating since April, 2015).
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8,00,000
|
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The term infrastructure facility is
eligible deduction under section 80-IA includes water treatment system . The
CBDT Circular No.1 dated 12.01.2006 says effluent treatment system is part
of water treatment system and would qualify as an infrastructure facility. Since
the effluent treatment is operated from April, 2015 much before the cutoff
date of 31.03.2017 it is eligible for deduction @100% for any 10 consecutive
assessment years out of 20 years beginning from the year in which the
assessee operates the said infrastructure facility.
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|
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Profit from operating and
maintaining industrial park in Karnataka. It was established, operated and
owned by Jay Ltd since April,2010. Acquired by Girish (P) Ltd in April,2019.
Jay Ltd had not claimed any deduction in respect of this income up to the
year ended 31st March, 2019.
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7,50,000
|
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Where the assessee is operating and
maintaining industrial park which should have been started after 01.04.1997
but before 31.03.2011 is eligible for deduction @100% of the profits for any
10 consecutive assessment years out of 15 years beginning from the year of
operation. Where the undertaking which has developed and operating the
industrial park has transferred the industrial park, the transferee shall be
allowed deduction for the unexpired period as if the transfer had not taken
place.
In this case the industrial park
was established and operated by Jay Ltd before the cutoff date i.e. in April
2010 which is much before 31.03.2011. Therefore, the transferee Girish (P)
Ltd is eligible to claim deduction for the balance period comprised in the 10
consecutive assessment years out of 15 years beginning from the year of
operation. Therefore, 100% of the profits derived is also eligible for
deduction.
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|
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Loss from textile machinery
manufacture at Coimbatore. Operating since incorporation.
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(5,25,000)
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Gross Total Income
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21,25,000
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Less: Deduction under section 80-IA
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|
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In respect of effluent treatment
system @100%
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8,00,000
|
|
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In respect of industrial park
operated from F.Y.2010-11 eligible for deduction for any 10 consecutive
assessment years out of 15 years beginning from the year of operation.
Deduction eligible up to F.Y.2024-25. Not claimed by the previous owner up to
F.Y.2018-19. The assessee Girish (P) Ltd can claim deduction for
F.Y.2023-24.
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7,50,000
|
|
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In respect of infrastructure
facility by way of operating toll road @100% Rs.11 lakhs. Deduction limited
to reducing the total income to `nil , hence deduction limited to
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5,75,000
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|
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|
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21,25,000
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Total Income
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Nil
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