80CC deduction to shareholders of Ambalal Sarabhai Enterprises. - Income Tax - 1479/CBDT

INSTRUCTION NO. 1479/CBDT Dated: August 10, 1982 M/s Ambalal Sarabhai Enterprises Pvt. Ltd. has applied for a clarification under section 80-CC of the Income-tax Act, 1961 in respect of investors in the issue of the equity shares, made by it on 31-3-1982. 2. Section 80-CC provides for a deduction from the total income of the individuals, HUFs and Association of Persons or Bodies of individuals consisting only of husband and wife governed by the system of community of property in force in the Union Territories of Dadra and Nagar Haveli and Goa, Daman, Diu in respect of cost of equity shares purchased by such persons in a year. These equity shares should form part of 'eligible issue of capital'. 3. The eligibility of deduction under section 80CC to shareholders of Ambalal Sarabhai Enterprises Pvt. Ltd. has been considered in consultation with the Ministry of Law. The Central Board of Direct Taxes has been advised that since the main object of M/s Ambalal Sarabhai Enterprises Pvt. Ltd. as per its Memorandum of Association includes manufacture of synthetic detergent which was in the list of articles listed in the Eleventh Schedule at the time of the issue, the investment in the company will not be entitled to relief under section 80-CC. The fact that Synthetic detergent has been deleted from the Eleventh Schedule from 1-4-1982 by the Finance Act, 1981 will not alter the situation as the public issue has been made on 31-3-1982. 4. These facts may be brought to the notice of all Income-tax Officers working in your charge. They should be alerted not to allow deduction under section 80-CC in respect of shares part of the public issue made by M/s Ambalal Sarahbai Enterprises Pvt. Ltd. on 31St March, 1982.