The High Court of Kerala, last week came in to the relief of Kannan Devan Plantations as they were awarded with eligibility for deductions under section 80-IA of the Income Tax Act, 1961.
There had been almost a decade long dispute between the revenue department and the plantation company regarding their eligibility for deductions. The department was of the opinion that Kannan Devan plantations was a reconstructed company of the former TATA tea limited and not a completely new entity.
According to section 80-IA of IT act, 1961, only a fresh company, i.e. not formed by splitting up, or the reconstruction, of a business already in existence, was eligible to deductions as mentioned in the aforementioned section.
The Council for the appellant, Adv. Sri. Jospeph Markose, was successful in convincing Justice Antony Dominic and Justice Dama Seshadri Naidu that his client was not a re-birth of the former TATA tea limited. The amount of money and efforts spent by his client for the rejuvenation of the tea plantations and the hydel electricity plant was mammoth and equivalent to establishing a new plantation.
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