INCOME TAX ACT, 1961

Section 80-IA

Deduction under section 80-IA - Industrially backward area or not - Entitlement to claim of deduction relying upon Notification No.714E, dated 07-10-1997 -

Assessee was engaged in business of manufacturing and sale of zirconium silicate, colours and frits for application in tiles and sanitary ware and claimed deduction under section 80-IA(2)(iv)(c). However AO disallowed the deduction claimed by assessee. CIT(A) held that assessee's manufacturing unit was located in a backward area and therefore, claim under section 80-IA was made. When the Notification came in October 1997 declaring the backward area with effect from 01-10-1994, assessee's unit did not fall within the backward area. Tribunal allowed the deduction claimed by assessee. Held: Industrial undertaking of assessee was not located in Industrial Backward District, which has been mentioned in the Notification issued by Central Government. It was also not in dispute that assessee had set up the industry before coming into force of Government Notification. Therefore, condition mentioned in section 80-IA(2)(iv)(c) that an industrial undertaking should be located within such Industrial Backward District as the Central Government may prescribe, was not fulfilled by assessee. In order to claim deduction, assessee had to satisfy the requirements mentioned under the provision, which admittedly assessee did not fulfill. Therefore, assessee was not entitled to claim deduction under section 80-IA(2)(iv)(c).

REFERRED : DCIT v. Ace Multi Axes Systems Ltd. (2017) 88 Taxmann.Com 69 (SC) : 2017 TaxPub(DT) 5071 (SC) State of Jharkhand & Ors. v. Tata Cummins Ltd. & Another (2006) 4 Scc 57 (SC) CCE v. Ginni Filaments Ltd. (2005) 3 Scc 378 (SC) : 2005 TaxPub(EX) 0518 (SC) State of Jharkhand & Others v. Ambay Cements & Another (2005) 1 Scc 368. (SC) : 2004 TaxPub(EX) 4155 (SC) I.T.C. LTD. v. CCE (2004) 7 SCC 591 (SC) : 2004 TaxPub(EX) 1993 (SC)

FAVOUR : Against the assessee

A.Y. :

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