January 2019


Kishor Karia
Chartered Accountant / Atul Jasani

11.  Mahabir Industries vs. Pr. CIT (2018) 406 ITR 315 (SC)


Industrial undertaking Deduction u/s. 80IA, 80IB and 80IC - The Assessees had started claiming and were allowed deductions from the Assessment Years 1998-99 and 1999-2000 u/s. 80-IA and from the Assessment Year 2000-01 to Assessment Year 2005-06 under section 80-IB of the Act and thus were entitled to the deduction under the new provision i.e. section 80-IC on fulfilling conditions contained in sub-section (2) of section 80-IC for the first time for the Assessment Year 2006-07


The Assessee manufactured polythene for which it had its factory in Shimla, Himachal Pradesh. The activity undertaken by the Assessee, an industrial undertaking, qualified for exemption from income tax u/s. 80-IA of
the Act.


This deduction under section 80-IA was claimed and allowed for two Assessment Years i.e. 1998-99 and 1999-2000.


Section 80-IA of the Act was originally introduced in the year 1991 by the Finance (No. 2) Act, 1991 w.e.f. April 1, 1991. There were amendments in the section from time to time. This section was amended by the Finance Act, 1999 w.e.f. April 1, 2000. Along with this provision, section 80-IB was also introduced for the first time by the same Finance Act, 1999.


From the Assessment Year 2000-01 to Assessment Year 2005-06, the Assessee claimed deduction u/s. 80-IB.


Another provision in the form of section 80-IC was inserted by Finance Act, 2003 w.e.f. April 1, 2004. The provisions of section 80-IC provided deduction to manufacturing units situated in the State of Sikkim, Himachal Pradesh and Uttaranchal and North-Eastern States. The deduction was provided to new units established in the aforesaid States, and also to existing units in those States if substantial expansion was carried out.




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