INCOME TAX ACT, 1961

Section 80-IB

Deduction under section 80-IB - Allowability - Proof of manufacturing activity of assessee -

Assessee claimed deduction under section 80-IB. AO disputed the said claim on the ground that actual production started during assessment year 2002-03 was not established by the assessee as it was not in possession of licenses to start a factory. Business of assessee was formed by reconstruction of business already in existence and hence the assessee is not entitled to deduction and business was initially carried out by the proprietary concern M/s. K. Since the said proprietary concern was subsequently taken over by the assessee, it was a case of reconstruction of business already in existence. Held: The excise returns and sales tax returns filed by the assessee clarify the issues in the instant case. Plant & machineries, as evidenced by the invoices, have been purchased by assessee. Jurisdictional High Court in case of CIT v. Western Outdoor Interactive (P.) Ltd. (2012) 349 ITR 309 (Bom) : 2012 TaxPub(DT) 3202 (Bom-HC), had held that 'where a benefit of deduction is available for a particular number of years on satisfaction of certain conditions under the provisions of the Act, then unless relief granted for the first year in which the claim was made and accepted was withdrawn or set aside, Officer cannot withdraw the relief for subsequent years. Thus, deduction was to be allowed to assessee.

Followed:CIT v. Western Outdoor Interactive (P.) Ltd. (2012) 349 ITR 309 (Bom-HC) : 2012 TaxPub(DT) 3202 (Bom-HC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2005-06

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