Exemption u/s 80IC

[Amrish Gupta]

Our asseese is running a factory claiming exemption u/s 80IC .Our asseese is a sole prop. Now our assesse has decide to convert his sole prop. in to partnership firm. Exemption period u/s 80IC is yet to be finished. Now my queery is whether the new partnership firm is eligible to enjoy the expemtion u/s 80IC for the remaining period or not.

[r.rajkumar kumar]

according to the Section 80IC it never says convert of the company it says it should not be the extention of the

present company hence i think convert may be permited and eligible to claim u/s 80IC since the business is in the same exemption area.

[deepak gulati]

The section speaks about undertaking and not Assessee, hence will be permitted.

[Amrish Gupta]

I had a talk with Dr. Girish Ahuja, he said the constitution of the asseese hasbeen changed with this conversion. So the new partnership firm is not eligible to claim the balance period expemtion. Now by considering yours views & Mr. ahuja's views sitution is now contradictory.............please help to overcome this............

AI Summary

Exemption for specified undertakings may be lost when a sole proprietorship converts into a partnership due to change in constitution.
Whether the tax exemption under 80IC continues after conversion from a sole proprietorship to a partnership is disputed: one position treats the exemption as attached to the undertaking so continuation is allowed if the business is not an extension, while the other treats the change of constitution as creating a new assessee and disallowing the remaining exemption period.