2021 (7) TMI 1242

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....nce of multiple "initial assessment years" and consequently deduction @ 100% of the profit where, it was otherwise allowable @ 30% only. 2 Whether, the interpretation of section 80IC of I.T. Act, by the Ld CIT(A)does not amount to re-writing the provision of law so as to allow the deduction to an undertaking existing and achieving substantial expansion during the previous year. 3 The Ld CIT(A) failed to appreciate the decisions of Hon'ble Supreme Court in the case of M/s CIT vs United General Trust Ltd 200ITR 488/SC) in which it was held that expenditure in relation to earning of the exempt income are embedded in the indirect expenditures. 4 The Ld CIT(A) failed to appreciate that Circular No 5/2014 of Ministry of....

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....sessee became eligible for 100% deduction u/s. 80IC of the Act for five years staring from A.Y.2009-10. The assessee explained the amended provisions of section 80IC and strongly contended for 100% deduction. 6. The CIT(A) after considering the facts and the submissions and drawing support from various judicial decisions allowed the claim of 100% deduction. 7. On the disallowance made u/s. 14A of the Act the CIT(A) found that assessee had sufficient own funds to meet the investment and therefore, there was no reason for the disallowance of interest on borrowed capital and accordingly deleted the disallowance. 8. Before us the DR strongly supported the assessment order. It is the say of the DR that there cannot be two initial ass....

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..... The operative part of the judgment is extracted as under :- 24. The aforesaid discussion leads us to the following conclusions: (a) Judgment dated 20th August, 2018 in Classic Binding Industries case omitted to take note of the definition 'initial assessment year' contained in Section 80-IC itself and instead based its conclusion on the definition contained in Section 80-IB, which does not apply in these cases. The definitions of 'initial assessment year' in the two sections, viz. Sections 80-IB and 80-IC are materially different. The definition of 'initial assessment year' under Section 80-IC has made all the difference. Therefore, we are of the opinion that the aforesaid judgment does not lay down the correct law. ....