Whether Assessee-Company qualified for deduction u/s 80 IA of IT Act, 1961 in case of Firm was converted into private limited company

Last updated: 20 January 2023

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The Supreme Court has ruled that a company formed by converting a partnership firm can qualify for tax deductions under Section 80-IA of the Income Tax Act, 1961. The judgement clarified that if the company meets the criteria of owning an infrastructure facility and having an agreement with a government authority, the conversion itself does not disqualify it from claiming the deduction. This decision affirmed that the company, as the successor to the firm, inherits the rights and obligations under the original agreement.

Court :
Supreme Court of India

Brief :
High Court had justly affirmed the view taken by the first appellate authority, holding that the Respondent/Assessee-Company qualified for the deduction under Section 80-IA being an enterprise carrying on the stated business pertaining to infrastructure facility and owned by a Company registered in India on the basis of the agreement executed with the State Government to which the Respondent/Assessee-Company had succeeded in law after conversion of the partnership firm into a company.

Citation :
COMMISSIONER OF INCOME TAX, UDAIPUR (APPELLANT) VS. CHETAK ENTERPRISES PVT. LTD. (RESPONDENTS)

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Judgement posted by

FCS Deepak Pratap Singh

Associate Vice President - Secretarial & Compliance (SBI General Insurance Co. Ltd.)

Dear Friends, MyselfFCSDeepak P. Singh ( B.Sc.. LLB, FCS. FIII, CIAFP, CRMP, ID) , A Fellow Member of ICSI, Law Graduate ,Fellow Member of Insurance Institute of India, Certified Independent Director ,Certified Insurance Anti Fraud Professional , Certified Risk Governance Professional ( ICSI-III) and cleared Limited I ... Read more

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