Assessees claim for the AY. 2008 -09 , 2009-10 u/s 80IC of the Act was rejected by the AO on the ground that this was 11th and 12th year of deduction and as per S. 80IC(6), total deductions under S. 80IC and S. 80IB cannot exceed the total period of ten years. Disallowance was affirmed by High Court . On appeal allowing the appeal of the assessee the Court held that ;The fact that the assessee has earlier availed deduction u/s 80IA & 80IB is of no concern because deduction u/s 80IC is available from the “initial year” i.e. the year of completion of substantial expansion. The inclusion of period for the deduction availed u/s 80IA & 80IB, for the purpose of counting ten years, is provided in sub-section (6) of S. 80IC and it is limited to those industrial undertakings or enterprises which are set-up in the North-Eastern Region. .(CA NO(S). 4765-4766 of 2018, dt. 18.05.2018) (AY.2008-09,2009-10)
Mahabir Industries v. PCIT( 2018) 406 ITR 315/ 166 DTR 209/ 302 CTR 449/ 256 Taxman 201 (SC) , www.itatonline.org.Editorial: Decision in Strovekraft India v CIT ( 2018) 400 ITR 225 (HP) (HC) is reversed on this point.Also Refer , PCIT v. Aarham Softronics ( 2019) 261 Taxman 343 (SC)
S. 80IC: Special category States –Initial year- The fact that the assessee has earlier availed deduction u/s 80IA & 80IB is of no concern because deduction u/s 80IC is available from the “initial year” i.e. the year of completion of substantial expansion. The inclusion of period for the deduction availed u/s 80IA & 80IB, for the purpose of counting ten years, is provided in sub-section (6) of S. 80IC and it is limited to those industrial undertakings or enterprises which are set-up in the North-Eastern Region. [ S. 80IA,80IB ]