2014 (8) TMI 596

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.... business of manufacture and sale of components/parts of CNC lathes and similar machines. The assessee furnished its return of income, admitting a total income of Rs. 1.76 crores which was initially processed under Sec.143(1) of the Act. Subsequently, the case was subjected to scrutiny under Sec.143(3) of the Act. The Assessing Officer concluded the assessment, determining the assessee's income at Rs. 1,79,82,653/-, after disallowing certain expenses, aggregating to Rs. 2.91 lakhs. The Commissioner of Income Tax, by virtue of the power conferred under Sec.263 of the Act, initiated suo motto proceedings on the ground that the assessment order was erroneous and prejudicial to the Revenue. According to the Commissioner, the Assessing Officer h....

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.... benefit of deduction under Sec.80IB on the assessee satisfying the conditions mentioned in Sub-sec.(2) of Sec.80IB, can the assessee be denied the benefit of the said deduction on the ground that during the said 10 consecutive years, it ceases to be a small scale industry? 4. Sec.80IB is an incentive provision. It provides deduction in respect of profits and gains from certain industrial undertakings other than infrastructure development undertakings. For an industrial undertaking to be eligible for the said deduction, it has to fulfill all the conditions mentioned under Sub-sec.(2) of Sec.80IB. The four conditions which are stipulated therein are, firstly, the industrial undertaking must not have been formed by splitting up or reconstruc....

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....ndertaking, it has to begin manufacture or produce articles or things at any time during the period beginning on the 1st day of April 1995 and end on the 31st day of March 2002. This is a condition which a small scale industry has to fulfill in addition to the conditions mentioned in Sub-sec.(2) of Sec.80IB. Once all these conditions are fulfilled, a small scale industry is entitled to the benefit of deduction for a period of 10 consecutive years beginning with the initial assessment year. 5. In the entire provision, there is no indication that these conditions had to be fulfilled by the assessee all the 10 years. When once the benefit of 10 years, commencing from the initial year, is granted, if the undertaking satisfy all these condition....