Read and express views
× Latest Case Laws on Income Tax by Supreme Court of India

These are the latest case laws decided by Supreme Court of India on Income Tax which have been published recently. The case laws are open for discussion and we invite expert comments from our members on its applicability and effect on relevant issues.

18-05-2018, MAHABIR INDUSTRIES, Section 80-IA, 80-IC, Supreme Court India

  • amit
  • amit's Avatar Topic Author
  • Offline
  • Administrator
  • Administrator
1 year 1 month ago #5863 by amit
Section - 80-IA, 80-IC, 10C, 80-IC(8)(v)
Order Date - 18-05-2018
Favouring - Set Aside
Respondent - PCIT
Justice - A.K.SIKRI, J.
Citation - 518Taxpundit282
Appeal No. - CIVIL APPEAL NO(S). 4765-4766 OF 2018
Asstt. Year - 1998-99 and 1999-2000



A short question of law arises for consideration in these appeals. All the appeals are filed by the same party, namely, Mahabir Industries (hereinafter referred to as the ‘assessee’) in which common respondent is Principal Commissioner of Income Tax (hereinafter referred to as the ‘Department’). Before stating the question of law, it may be necessary to mention in brief the background under which the said question of law has arisen inasmuch as this background would be an enabling factor in understanding the true ambit and scope of the question of law.

The assessee manufactures polythene for which it is having its factory in Shimla, Himachal Pradesh. The activity undertaken by the assessee, an industrial undertaking, qualified for exemption from income tax under Section 80-IA of the Income Tax Act (hereinafter referred to as the ‘Act’). Section 80-IA of the Act provides for deductions in respect of profits and gains from industrial undertakings or enterprises engaged in infrastructure development etc. if it fulfills the conditions mentioned in subsection (4) thereof. Such a deduction is of an amount equal to hundred per cent of the profits and gains derived from such business for ten consecutive Assessment Years. In nutshell, those undertakings or enterprises, which fulfill the conditions mentioned in sub-section (4) of Section 80-IA of the Act, are entitled to total deductions of their profits, which means, no tax is payable and the period for which such undertakings or enterprises are exempted from payment of tax is ten consecutive Assessment Years. The assessee admittedly qualified for this deduction which it started availing from the Assessment Year 1998-99. This deduction under Section 80-IA was claimed and allowed for two Assessment Years i.e. 1998-99 and 1999-2000.

2. Section 80-IA of the Act was originally introduced in the year 1991 by the Finance (No.2) Act, 1991 w.e.f. April 1, 1991. There were amendments in the Section from time to time. This Section was amended by the Finance Act, 1999 w.e.f. April 1, 2000. Along with this provision, Section 80-IB was also introduced for the first time by the same Finance Act, 1999. This provision allows deduction in respect of profits and gains from certain industrial undertakings other than infrastructure development undertakings. Deduction from such profits and gains is of an amount equal to such percentage and for such number of Assessment Years as specified in Section 80-IB. Sub-section (4) of Section 80-IB provides for hundred per cent deduction for a period of five years and thereafter twenty-five per cent. First proviso thereto states that total period of deduction is not to exceed ten consecutive Assessment Years. Second proviso is a specific provision for industries in the North-Eastern Region to which we shall advert to at the appropriate stage. Sub-section (2) enumerates the conditions which are to be fulfilled by such industrial undertakings in order to qualify for deductions from profits and gains under that

3. As mentioned above, for the Assessment Years 1998-99 and 1999-2000 (i.e. two Assessment Years), the assessee was allowed deduction under Section 80-IA. From the Assessment Year 2000-01 to Assessment Year 2005-06, the assessee claimed deduction under Section 80-IB.

4. Interestingly, another provision in the form of Section 80-IC was inserted by Finance Act, 2003 w.e.f. April 1, 2004. As per this provision, certain undertakings or enterprises in certain special category States are allowed deduction from such profits and gains, as specified in sub-section (3) of Section 80-IC. The provisions of Section 80-IC provided deduction to manufacturing units situated in the State of Sikkim, Himachal Pradesh and Uttaranchal and North-Eastern States. The deduction was provided to new units established in the aforesaid States, and also to existing units in those States if substantial expansion was carried out. The deduction was available @100% for ten Assessment Years for the units located in North-Eastern and in the State of Sikkim and for the units located in Himachal Pradesh, the deduction was available @100% for five years and @25% for next five years. The assessee completed substantial expansion (by investing in new plant and machinery of value more than 50% of the value of plant and machinery already installed as on 1 April,

Click to view and download Full Free Judgement of MAHABIR INDUSTRIES vs. PCIT

Unable to display Google Map.

Please Log in or Create an account to join the conversation.

Time to create page: 0.075 seconds

If You Appreciate What We Do Here On TaxPundit, You Should Consider:

We are thankful for your never ending support.

Latest Analysis - High Courts

AA 226 Modakurichi Primary Agricultural Cooperative Credit Society vs ITO

AA 226 Modakurichi Primary Agricultural Cooperative Credit Society vs ITO

AA 226 Modakurichi Primary Agricultural Cooperative Credit Society vs ITO Read More
Tata Teleservices Ltd. vs. ITO

Tata Teleservices Ltd. vs. ITO

Tata Teleservices Ltd. vs. ITO Read More
CIT vs. S L Lumax Ltd

CIT vs. S L Lumax Ltd

CIT vs. S L Lumax Ltd Read More
Ramupillai Kuppuraj vs ITO

Ramupillai Kuppuraj vs ITO

Ramupillai Kuppuraj vs ITO Read More
  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37

Forum Features

Latest Case Laws
Latest Case Laws are instantly updated in the Forum into their respective section
Latest from CBDT
Latest Circulars, Notifications, Orders etc. from CBDT is updated in the Forum
Ask Experts
You can ask questions to the community
Support queries are either replied via mail or in the Forum so that others can be benefited
Press Releases
Latest Press Notes and Press Releases are updated in the Forum
Connect with Members
You can connect with our community members by replying to their queries

Recommended Articles



All content herein is the copyright of Taxpundit. No images, text, or any other content may be, reproduced or redistributed without the express written consent of Taxpundit.

All Rights Reserved. All Content Copyright.


Subscribe to our newsletter and stay updated on the latest developments and special offers!

Company Master Data Since 1900. More than 1.75 Million Records. Register/Login to get FREE access. Read more
Toggle Bar