Criminal Trident Pack: IPC, CrPC and IEA by Sr. Adv. G.S Shukla and Adv. Raghav Arora
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exemption under 80IC

(Querist) 18 June 2010 This query is : Resolved 
Respected Sir,

back ground : we have setup a new unit, which is in notified industrial area of NE, (a partnership firm) started production in 2006 and were availing exemption under 80IC, we manufacuture pan masala(without tobacco) and churna for pan(mouth freshener)in our factory

the IT officer say that to claim the benefit of 80IC, our unit should make substantial expansion then only you can get the benefit of 80IC, as you unit has not made substantial expansion, you are not eligible for exemption under 80ic, 80ic is applicable to the unit how have made expansion during the period specified in 80ic not the new units estabilised during the specified period

sir pls help me with relevant papers to prove that new unit are also eligible for exemption of income tax for 10 years under 80IC.

with thanks awaiting for your reply.

MANOJ JAIN
Vineet (Expert) 18 June 2010
It appears, there is some confusion. In fact it is new units which are eligible for deduction and not the units established by expanding the existing units or relocating the existing units. Please clarify the same.
A V Vishal (Expert) 18 June 2010
[The Fourteenth Schedule

[See section 80-IC(2)]

List of Articles or things or operations
Part A

For the North-Eastern States

1. Fruit and Vegetable Processing industries manufacturing or producing—

(i) Canned or bottled products;

(ii) Aseptic packaged products;

(iii) Frozen products;

(iv) De-hydrated products;

(v) Oleoresins.

2. Meat and Poultry Product industries manufacturing or producing—

(i) Meat Products (buffalo, sheep, goat and pork);

(ii) Poultry production;

(iii) Egg Powder Plant.

3. Cereal Based Product industries manufacturing or producing—

(i) Maize Milling including starch and its derivatives;

(ii) Bread, Biscuits, Breakfast Cereal.

4. Food and Beverage industries manufacturing or producing—

(i) Snacks;

(ii) Non-alcoholic beverages;

(iii) Confectionery including chocolate;

(iv) Pasta products;

(v) Processed spices, etc.;

(vi) Processed pulses;

(vii) Tapioca products.

5. Milk and milk based product industries manufacturing or producing—

(i) Milk powder;

(ii) Cheese;

(iii) Butter/ghee;

(iv) Infant food;

(v) Weaning food;

(vi) Malted milk food.

6. Food packaging industry.

7. Paper products industry.

8. Jute and mesta products industry.

9. Cattle or poultry or fishery feed products industry.

10. Edible Oil processing or vanaspati industry.

11. Processing of essential oils and fragrances industry.

12. Processing and raising of plantation crops—tea, rubber, coffee, coconuts, etc.

13. Gas based Intermediate Products Industry manufacturing or producing—

(i) Gas exploration and production;

(ii) Gas distribution and bottling;

(iii) Power generation;

(iv) Plastics;

(v) Yarn raw materials;

(vi) Fertilizers;

(vii) Methanol;

(viii) Formaldehyde and FR resin melamine and MF resin;

(ix) Methylamine, Hexamethylene tetramine, Ammonium bi-carbonate;

(x) Nitric Acid and Ammonium Nitrate;

(xi) Carbon black;

(xii) Polymer chips.

14. Agro forestry based industry.

15. Horticulture industry.

16. Mineral based industry.

17. Floriculture industry.

18. Agro-based industry.

The said products manufactured by you do not fall under Sch XIV prescribed for deduction under 80 IC,
Hence the ITO is refusing deduction to the firm, it is my understanding probably some one can explain better.
VENKATRAMAN SHRINIVAS (Expert) 19 June 2010
Mr.Vishal's clarification is perfect and illustrative. The product stated to be manufactured does not figure in the items listed in the Fourteenth schedule. The assessing Officer is right in declining the relief. It could not, however be followed as to how he had reportedly confcluded for declining the relief, that no expansion has not been done. When the product does not falla within the Fourteenth schedule, it is rejection has to be outright.
mbarjatiya (Querist) 19 June 2010
our product falls under food packing industry their is no confusion to the ITO about the shedule he says that to avail the benefit of 80ic your unit has to make expansion then only you will get the benefit
soumitra basu (Expert) 20 June 2010
Can you get deduction u/s. 80IA


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