Deduction under s 80-IB

Income earned from job work which includes repairs and maintenance is not eligible for a deduction under s 80-IB of the Act, as held by KolTrib in DCIT, Kolkata v Rajesh Kumar Drolia — In favour of: The revenue (partly).

The burden is on the assessee to show that the income earned from an activity and the profits from which are claimed to qualify for the deduction has immediate and direct nexus with the essential activity of the industrial undertaking.

The definition of “manufacture”, as assigned in cl (r) of s 2 of the Special Economic Zones Act, 2005 in s 10AA of the Act, is not applicable to s 80-IB.

Decided on: 12 August 2011.