New firm acquiring new plant & machinery is eligible to claim deduction u/s 80IC

Sharda Exports Vs DCIT (ITAT Delhi)

ITAT Delhi held that conditions for the eligibility of claim u/s 80IC in the case of a new industrial undertaking stands satisfied as new firm acquired new plant & machinery which was not previously used.

Facts- The assessee claimed deduction u/s 80IC of the Income Tax Act, 1961 from the A.Y. 2010-11 onwards. The instant assessee had turnover of Rs.75 Cr. in the first year of business. The moot allegation of the Assessing Officer was that the assessee went on changing the firm structure only to claim deduction u/s 80IC and the assessee could not have had a turnover of Rs.75 Cr. at the beginning of the business and the entire new business is the changed form of the old business.

AO disallowed the deduction claimed by the assessee u/s 80IC. Aggrieved, the assessee filed appeal before CIT(A) who deleted the addition made by AO. Being aggrieved, revenue preferred the present appeal.

Conclusion- The evidences proves that it is a case where new plant & machinery has been acquired which was not previously used. Hence, the conditions for the eligibility of claim u/s 80IC in the case of a new industrial undertaking stands satisfied. Hence, we decline to the interfere with the reasoned order of the ld. CIT(A).

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