80 IC-substantial expansion

[Guest]

IF a Company was established after 2003 in baddi and has alresdy claimed dudction of 100% of Profits for last 5 years....can it again cliam deduction of 100% for another 5 years if it does substantial expanstion

[Toshar Ahuja]

Yes, the Company can claim deduction 100% it it does substantial expansion.

[Guest]

But substantial expansion is'nt for concerns that are in existence before provision for 80ic are operational.because in other case the companies would again and again do substantial exemption and would always get 100% deductions.

[anmol anmol]

regarding 80C deduction for industries in uttarakhand & himachal pradesh etc

you have raised a valid question of repeat deduction u/s 80C by substantial expansion. There is a cap of 10 years beyond which no deduction can be claimed.  However there doesn't seem to be any cap on getting 100% for 10 years.  Nor does the wording of the relevant section suggest anywhere that only those firms which have not taken benefit of 80C earlier shall be eligible for benefit of 100 % deduction by going for substantial expansion. i will appreciate if any one can provide some orders of I tax or tribunals in the said matter

anmol

[anmol anmol]

an order of kolkatta ITAT in the matter seems relevant although the entire context in which the order is passed was not available -- in the case of Joonktolee Tea and industries

[r.rajkumar kumar]

my answer y can claim under secton 80ic.for another 5 years. but y have to pya MAT UNDER INCOME ACT .

AI Summary

Substantial expansion entitlement can permit renewed full industrial deduction, subject to cumulative duration limits and tax consequences. Whether a company that previously claimed a period of full industrial deduction may claim another period by undertaking substantial expansion is disputed; commentators say expansion can permit a further full deduction, though others question applying expansion relief to pre existing beneficiaries. The discussion notes an effective cumulative duration limit on deductions, a lack of explicit statutory prohibition on repeat claims by previously benefited firms, a tribunal order cited for relevance, and potential Minimum Alternate Tax consequences when claiming successive deduction periods.