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Where assessee had availed deduction under section 80-IC for a period of 5 years at the rate of 100 per cent, he would be entitled to deduction on substantial expansion for remaining 5 assessment years at the rate of 25 per cent and not at rate of 100 per cent

Deduction under Section 80-IC is available to manufacturing units situated in the State of Sikkim, Himachal Pradesh and Uttaranchal and North-Eastern States. The exemption under section 80-IC is provided at the rate of 100% of such profits and gains for five assessment years commencing with the initial assessment years and, thereafter, 25% for next five years. The deduction is limited to a period of 10 years. In the above case, the assessee had claimed a deduction of 100% for the first five Asst. Years. Later, the assessee had again claimed 100% deduction for the 6th Asst. Year on the ground that the assessee had undertaken substantial expansion. The Honorable Supreme Court Of India in this case has held that the assessee after availing deduction for a period of 5 years at rate of 100% would be entitled to deduction for remaining 5 assessment years at rate of 25% only and not at rate of 100%. https://www.taxmann.com/filecontent.aspx?Page=CASELAWS&id=101010000000183259&isxml=Y&search=&tophead=true&tophead=true