COMMISSIONER OF INCOME TAX versus M/S. CLASSIC BINDING INDUSTRIES

COMMISSIONER OF INCOME TAX versus M/S. CLASSIC BINDING INDUSTRIES

After availing deduction for 5 years at 100%, the assessees are only entitled to deduction for remaining 5 years at 25% (or 30% for companies), and not 100%, even if substantial expansion is carried out. There cannot be another initial assessment year within the same 10-year period under s.80-IC.

Source-derived case information.

Parties
Appellant: Commissioner of Income Tax; Respondent: M/s. Classic Binding Industries
Jurisdiction
India
Judgment Date
20 August 2018
Procedural Posture
Civil Appeal / Appeal From High Court Judgment
Outcome
Appeals allowed
Legal Topics
Income Tax Exemption, Section 80 IC, Substantial Expansion, Assessment Year
Taxation Income Tax Exemption Section 80 IC Substantial Expansion Assessment Year

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Parties

Commissioner of Income Tax

Appellant

M/s. Classic Binding Industries

Respondent

Procedural Posture

Civil Appeal / Appeal From High Court Judgment

Legal Issues

  1. 1 Whether an assessee who sets up a new industry under s.80-IC and avails 100% exemption for five years can again claim exemption at 100% for next five years after substantial expansion

Ratio Decidendi

After availing deduction for 5 years at 100%, the assessees are only entitled to deduction for remaining 5 years at 25% (or 30% for companies), and not 100%, even if substantial expansion is carried out. There cannot be another initial assessment year within the same 10-year period under s.80-IC.

Court Disposition

Appeals allowed

Orders

  • The appeals are allowed; question of law answered in favour of the Revenue; assessees entitled only to deduction at 25% (or 30% for companies) for remaining 5 years after first 5 years at 100%; no order as to costs.