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Facts
A cyclone extensively damaged the assessee's factory, leading to a complete stoppage of production for a period of 45 days. The assessee claimed a deduction under Section 80IA read with Section 33B of the Income Tax Act, 1961, for the reconstruction and revival of its business unit. The Revenue contested this, arguing that a temporary stoppage does not amount to a discontinuance of business.
Held
The Tribunal held that the term "discontinuance of business" includes a temporary interruption. Considering the extensive damage caused by the cyclone and the subsequent reconstruction and revival of the business, the assessee was eligible for the deduction under Section 80IA read with Section 33B of the Act. The Revenue's contention that a temporary stoppage does not amount to discontinuance was rejected.
Key Issues
Whether a temporary stoppage of business due to a natural calamity constitutes a "discontinuance of business" for the purpose of claiming deduction under Section 80IA read with Section 33B of the Income Tax Act.
Sections Cited
Section 143(3), Section 254, Section 115JA, Section 80IA, Section 33B, Section 80HHC, Section 80IB
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, Hyderabad ‘ B ‘ Bench, Hyderabad
आदेशकी प्रतततिति अग्रेतषत/ Copy of the order forwarded to:- 1. तिर्ााररती/The Assessee : Regency Ceramics Limited, 6-3-1090/A/7/IMS House Rajbhavan, Somajiguda, Hyderabad, Telangana-500082.
31 ITO, Ward 3(1), Hyderabad Vs. Regency Ceramics Ltd.
1337 to 1340/Hyd/2024 AY(s). 1998-99 to 2002-03
राजस्व/ The Revenue Income Tax Officer, Ward-3(1), 7th Floor, Signature : Towers, Kodapur, Hyderabad, Telangana-500084.