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April 2014

Industrial undertaking: Deduction u/s. 80-IB: A. Y. 2001-02: Production of article: Bottling of gas into cylinders amounts to production: Assessee entitled to deduction u/s. 80-IB:

By K. B. Bhujle Advocate
Reading Time 1 mins
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Puttur Petro Products P. Ltd. vs. ACIT; 361 ITR 290 (Karn):

The assessee had claimed deduction u/s. 80-IB contending that bottling of LPG gas in the cylinders amounts to production/manufacturing activity. The Assessing Officer disallowed the claim. The Tribunal upheld the disallowance.

On appeal by the assessee, the High Court reversed the decision of the Tribunal and held as under:

“i) The process of bottling of gas into gas cylinders, which requires a very specialised process and independent plant and machinery, amounts to production of “gas cylinders” containing gas for the purpose of claiming deduction u/s. 80-IB.
ii) In the circumstances, the question framed by us is answered in favour of the assessee and against the Revenue.”

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