Case Law Details
Brief of the case:
ITAT New Delhi held in ACIT Vs Phonix Lamps India Ltd that if the assessee was selling its final product to particular parties continuously and there was no return of the final product. Moreover there was no complaint of any defect in the finished product. So, it was clear that the assessee had started its commercial production. Further huge wastage would not be criteria to determine the stage of trial production or commercial production. So the contention of the assessee that it was running trial production during the concerned period was wrong. So, sec 80IC would be applicable to the assessee.
Facts of the case:
The assessee company manufactured Compact Florescent Lamp (CF Lamps), Halogen Lamp, Metal Halide Lamps for which purpose it had three units. Unit-I was in NEPZ area and was claiming deduction u/s 10A of the Income Tax Act till financial year 2001-02. The second unit was outside the NEPZ area. The third unit was started during the Assessment Year 2003-04 at Dehradun. The assessee had claimed deduction u/s 80HHC on the basis that it was exporting CF Lamps to other countries. As per AO the special provision in respect of certain undertakings in certain special category states as laid down in Section 80IC of the Income Tax Act,1961 were applicable to this area. However, the assessee company had not claimed that the unit was covered under Section 80IC of the Income Tax Act, 1961 for the year under consideration on the basis that in its accounts the assessee had shown that this unit was under trail run.
Contention of the assessee:
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