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TMI Blog2016 (3) TMI 498X X X X Extracts X X X X X X X X Extracts X X X X ..... as having manufacturing unit at a place called Wada. Subsequently, the assessee shifted its manufacturing activities to a place called Baddi located in the State of Himachal Pradesh during the year 2004. The assessee carried substantial expansion during the financial year relevant to the assessment year under consideration, i.e., AY 2008-09. Accordingly it claimed deduction u/s 80IC of the Act in that year. The AO rejected the claim on the reasoning that the undertaking located in Baddi is established by reconstruction of existing business, which is in violation of provisions of sec. 80IC(4)(i) of the Act. 3. The Ld CIT(A) noticed that the assessee had claimed deduction u/s 80IB of the Act for assessment years 2004-05 to 2007-08 and the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contrary, the Ld D.R placed strong reliance on the order passed by Ld CIT(A). 6. We have heard rival contentions and perused the record. The sub. Sec. 1, 2 and 4 of sec. 80IC reads as under:- "Special provisions in respect of certain undertakings or enterprises in certain special category States. 80-IC. (1) Where the gross total income of an assessee includes any profits and gains derived by an undertaking or an enterprise from any business referred to in sub-section (2), there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction from such profits and gains, as specified in sub-section (3). (2) This section applies to any undertaking or enterp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Software Technology Park or Industrial Area or Theme Park, as notified97 by the Board in accordance with the scheme framed and notified by the Central Government in this regard, in any of the North-Eastern States; (b) which has begun or begins to manufacture or produce any article or thing, specified in the Fourteenth Schedule or commences any operation specified in that Schedule, or which manufactures or produces any article or thing, specified in the Fourteenth Schedule or commences any operation specified in that Schedule and undertakes substantial expansion during the period beginning- (i) on the 23rd day of December, 2002 and ending before the 1st day of April, 2007, in the State of Sikkim; or (ii) on the 7th day of January, 2003 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the article or thing manufactured by the assessee does not fall under Thirteenth Schedule. There is also no dispute that the assessee is manufacturing or producing an article or thing. Hence, the assessee should be eligible for deduction u/s 80IC of the Act, if it undertakes substantial expansion. The details of plant and machinery available with the assessee as on 1.4.2007 and the value of new plant & machinery purchased by the assessee during the financial year 2007-08 relevant to the assessment year 2008-09 would show that the assessee has carried out "substantial expansion" of its undertaking, since the value of new machinery exceeds by more than 50% of the book value of Plant & Machinery as on 1.4.2007. 8. We have noticed that th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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