TaxTMI 
TaxTMI 
2011 (8) TMI 738
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....on the facts and circumstances of the case, the Ld. ITAT was right in law in confirming the order of the CIT(A) who had deleted the addition made by the Assessing Officer on account of disallowance of the deduction claimed by the assessee firm u/s 80-IC, as the assessee firm has taken over the on going proprietary concern and as per Section 80-IA (12), the deduction is available only when an Indian Company is taken over by another Indian Company in a scheme of amalgamation or demerger?" 2. Briefly stated, the facts necessary for adjudication as narrated in the appeal are that the assessee is a partnership firm having two partners, namely, Karanjit Singh Bajwa as confirming partner and Inder Raj Singh Grewal as the incoming partner with 50....
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....ip firm. The Assessing Officer vide order dated 29.12.2008 held that a new person came into existence this year and invoking the provisions of Sections 80-IC(7) and 80-IA(12) of the Act disallowed the deduction of Rs. 23,68,113/- on the ground that such benefit was admissible for the remaining period in case of companies only. The benefit of Section 80-IC of the Act was also denied on the basis of provisions of Section 80-IC(4)(i) of the Act. Feeling aggrieved, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [in short "the CIT(A)"]. The CIT(A) vide order dated 25.9.2009 allowed the claim of the assessee under Section 80-IC of the Act on both the grounds. Against the order of the CIT(A), the department filed an a....
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....for the remaining period in view of Sections 80-IC(7) and 80-IA(12) of the Act. (ii) Section 80-IC(4)(i) of the Act disentitled the assessee to claim deduction under Section 80-IC of the Act on change of status of the assessee from proprietorship to partnership. 7. In our opinion, the revenue was not right in denying benefit of Section 80-IC of the Act to the assessee in both the situations. 8. Taking up first aspect of the plea of the revenue, it may be noticed that benefit being admissible to an undertaking, the same could not be denied to the assessee for the remaining period only on the ground that sub-section (12) of Section 80-IA embraces only cases of amalgamation or demerger of Indian Company and, therefore, such benefit wo....
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.... of the transfer of business from the sole proprietor concern to a partnership concern. Even otherwise, the provisions of section 80-IA(12) of the Act talks about the continuity of the deduction to be allowed for the unexpired period. However, in view of the Board Circular dated 13.12.1963 in cases of non corporate assesses, the benefit of deduction u/s 80-IA/80-IC can be claimed proportionately by the predecessor and the successor in business. Accordingly, we uphold the order of CIT(A) in allowing the deduction u/s 80-IC of the Act. We are also in conformity with the order of CIT(A) that the present case is neither a case of amalgamation nor transfer of capital asset attracting the provisions of section 45(3) of the Income Tax Act for char....
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.... not apply in respect of an undertaking which is formed as a result of the re-establishment, reconstruction or revival by the assessee of the business of any such undertaking as is referred to in section 33B, in the circumstances and within the period specified in that section; (ii) it is not formed by the transfer to a new business of machinery or plant previously used for any purpose. Explanation:- The provisions of Explanations 1 and 2 to sub-section (3) of Section 80-IA shall apply for the purposes of clause (ii) of this subsection as they apply for the purposes of clause (ii) of that sub-section. 10. The sub-section (4) to section 80IC postulates that undertaking eligible for deduction under the section is not formed by splitt....