Case Law Details
Section 80IC: Despite substantial expansion there cannot be two initial Assessment Year
Brief facts of the case are that the assessee is a proprietor of two concerns i.e. M/s Alpine Steels and M/s Virat Steels. Both the units were manufacturing interlinked chains and barbed wires and came into production with effect from 18-06-2004. The assessee had been claiming deduction u/s 801C of the Act since A.Y. 2005-06, and this was the sixth year of production of both the units.
During the impugned assessment year the assessee had undertaken substantial expansion in both the units by way of addition to plant and machinery and had again claimed deduction u/s 801C of the Act at the rate of 100% treating the impugned assessment year i.e. A.Y. 2010-11 as the “initial year” for the purpose of Section 801C. During assessment proceedings the assessee was asked to justify the claim u/s 801C © 100% instead of 25% since this was the sixth year of production.
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