Section 80-I

Section 80-I — the law in short

What the courts have decided on section 80-I, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• Vijay Ship Breaking Corpn v CIT Supreme CourtHelps taxpayerValidity unconfirmed
  Does breaking up ships count as production for the section 80HH and 80-I deduction, and must I deduct tax at source on usance interest paid abroad on the vessel I bought?
  Yes to the deduction, and no tax was deductible. The Supreme Court held that ship breaking gives rise to the production of a distinct and different article, so the deduction under sections 80HH and 80-I was rightly allowed. Production is wider than manufacture, the two words are used disjunctively, and nothing in the ordinary meaning of produce requires the article to be new. On the second question, Explanation 2 to section 10(15)(iv)(c), inserted on 18 September 2003 with effect from 1 April 1983, exempts usance interest payable outside India by a ship breaking undertaking on the purchase of a ship. Since the sum was not assessable in India, no obligation to deduct under section 195(1) arose.
• CIT v Canara Workshops (P) Ltd Supreme CourtHelps taxpayer
  One of my units qualifies for the priority industry deduction and made a profit, while another unit made a loss. Must I set the loss off before claiming?
  No. The Supreme Court held that in applying section 80E the profits and gains earned by an industry mentioned in the section cannot be reduced by the loss suffered by any other industry owned by the assessee - and it makes no difference that the other industry is itself a priority industry. The deduction recognises that a priority industry has been set up and is working efficiently, and that merit is not to be diminished because another business has done badly. The Court affirmed the High Court's answer for the assessee and dismissed the Revenue's appeals with costs.
• Ranbaxy Laboratories Ltd v CIT High CourtHelps taxpayerValidity unconfirmed
  Same point, in Delhi: if the recorded grounds fail, can the officer still tax an unrelated item?
  No. Once the officer accepts that the recorded items did not escape assessment, it means he had no reason to believe, and the notice becomes invalid. Every new issue needs a fresh s.148 notice.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.