INCOME TAX ACT, 1961

Section 80-IC

Deduction under section 80-IC - Allowability - Assessee industry located in notified area -

Assessee was proprietor of M/s. Sarla Industries appearing at F-14, SIDC, Industrial Area, Bhimtal claimed deduction under section 80-IC on profits earned from unit. Assessee was engaged in manufacturing of LED TV's, etc. As per AO, items manufactured by assessee were not specified in 14th schedule to the Act of which Part C pertains to Himachal & Uttaranchal. The auditor in audit report mentioned that assessee was eligible for deduction under the said clause of schedule During appellate proceedings, assessee filed modified audit report and claimed that it claimed deduction under section 80-IC(2)(a)(ii) and 80-IC(2). Assessee gave copy of schedule 13 also. CIT(A) recorded the finding that Assessee's claim that its unit was situated in notified industrial area in Uttaranchal and was thus eligible for deduction under section 80-IC. However, unit of assessee was situated in the industrial area developed by UPSIDC. As per Central Exercise Notification No. 50/2003, said unit was also eligible for exemption or a particular period from excise duty. But there was no notification on record issued by CBDT notifying such industrial area whereas unit is situated making it eligible for deduction under section 80-IC. Therefore, claim of assessee could not be allowed. Thus, disallowance made by AO was upheld. Held: Undertaking in respect of which deduction had been claimed under section 80-IC was situated at Khasra Nos. 687, 689, F- 14, SIDC Industrial Area, Bhimtal, Nainital, Uttaranchal falling in the specified Industrial area as per Notification No. 177/2004, dated 28-6-2004 issued by the CBDT in accordance with scheme framed and notified by Central Government for the state of Uttaranchal. Apparently, said notification was not brought to the notice of CIT(A) and in absence of the same, CIT(A) denied deduction under section 80-IC(2)(a)(ii). However, same had been filed and examined by ITAT. Further, assessee was not engaged in manufacturing or producing any article/thing specified in Thirteenth Schedule. Accordingly, AO was directed to allow deduction under section 80-IC.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2014-15

SUBSCRIBE FOR FULL CONTENT