ITAT principally agreed that the assessee-company could claim ...

Substantial Expansion Under Section 80IC Requires Verification for 100% Deduction Despite Prior Year Allowance

March 24, 2025

Case Laws     Income Tax     AT

ITAT principally agreed that the assessee-company could claim 100% deduction under Section 80IC after "substantial expansion," treating it as an "initial assessment year" per Aarham Softronics (SC). However, the Tribunal found that CIT(A) had improperly allowed the modified deduction without verifying whether the assessee had actually carried out "substantial expansion" as defined in Section 80IC(8)(ix) or satisfied other statutory pre-conditions. The fact that AO had allowed enhanced deduction in the preceding year supported the assessee's claim but did not justify dispensing with verification requirements. The matter was restored to CIT(A) for readjudication after proper verification of all pre-conditions. Revenue's appeal and assessee's cross-objection were allowed for statistical purposes.

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