In Brief
The Supreme Court considered whether a small-scale industrial undertaking (SSIU) that loses its SSIU status during the 10-year block period for Section 80-IB(3) deduction can still claim the full deduction. The assessee initially qualified as an SSIU but later expanded and exceeded the plant and machinery investment limit prescribed for SSIU status. The High Court had allowed the deduction, interpreting the law to encourage industrial growth. The Supreme Court reversed this, holding that an assessee must maintain SSIU status in each relevant assessment year to claim the deduction. The incentive is category-specific and cannot extend to undertakings that cease to meet the eligibility criteria, even if initially qualified.
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