Section 80 ic

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

02 January 2012 A Company availed benefits U/s 80 IC during AY 2006-2007 and availed 100% deduction till AY 2010-11. It invested huge amount in plant and machinery during FY 2010-11 and thus qualified for substantial expansion during AY 2011-12.

Now my query is :
-Whether the company is entitled for 100% deduction as per provisions of 80IC, as it has already claim 100% deduction during last five years..
-Whether it can opt a fresh first AY for availment of benefits and continue to avail benefits at 100% for next five years.
-This section says that overall exemption period shall not increase beyond 10 years and therefore the existing five and fresh five year benefits shall exhaust total ten years.

Our Point of view is : we can claim 100% deduction henceforth and may continue to claim at 100% benefits for next five years but the overall benefit period shall be restricted to ten years and company can not claim 100% and / or 30% deduction once total ten years are completed.

Learned members views are solicited.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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02 January 2012 In my view deduction is available from the initial Assessment year for 10 consecutive AYs.
.
Once Initial AY is fixed, the claim of deduction U/s 80IA can be made 100% upto first 5AY and 30% in the next 5AYs in case of a company.
.
Major expansion will not increase the deduction from the 6th year to 100%.
The intention of law is to provide the benefits even after the substantial expansion, but without disturbing the initial year concept. There can not be 2 initial years for the same enterprise.

Querist : Anonymous

Querist : Anonymous (Querist)

03 January 2012 Thankyou for your valuable opinion.
Actually,the section is silent about that,it does says anything about deduction to be taken second time.So can we take deduction 100% from the sixth year again.

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