M/s Zenith International, Baddi V. DCIT, Circle , Parwanoo

ITA 1045/CHANDI/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5180 (ITAT-CHANDIGARH)
• Duration Of Justice: 8 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 22-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KIRAN DESH
• Assessee Lawyers: PUNEET GUPTA
• Keywords: Opportunity of being heard
• Section: 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, SMC, CHANDIGARH BEFORE MS. DIVA SINGH, JUDICIAL MEMBER ITA NO. 1045/CHD/2017 ASSESSMENT Y EAR: 2012-13 M/S ZENITH INTERNATIONAL, VS. THE DCIT, VILLAGE BRAHMIN VALLEY, CIRCLE, BADDI (HP). PARWANOO (HP). PAN NO. AACFZ4176G (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PUNEET GUPTA, CA RESPONDENT BY : SHRI KIRAN DESHPANDE, SR.DR DATE OF HEARING : 04.01.2018 DATE OF PRONOUNCEMENT : 01.03.2018 ORDER THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE ASSA ILING THE CORRECTNESS OF THE ORDER DATED 27.04.2017 OF LD. CIT(APPE ALS) SHIMLA PERTAINING TO 2012-13 ASSESSMENT YEAR ON THE FOLLOWING GROUND : THE ID. CIT(A) IS WRONG IN DISALLOWING THE BENEFIT OF SUBSTANTIAL EXPANSION U/S 80IC AND CONFIRMING THE DEDUCTION U/S 80IC(2)BY HOLDING THAT BENEFIT OF SUBSTANTIAL EXPANSION IS ALLOWABLE ONLY TO THE UNDERTAKING WHICH WERE EXISTI NG AS ON 07.01.2003. 2. AT THE TIME OF HEARING IT WAS A COMMON STAND OF THE PARTIES BEFORE THE BENCH THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSE E BY VIRTUE OF THE ORDER DATED 28.11.2017 OF THE HONBLE HIGH COURT DATED 28/11/ 2017 IN THE CASE OF M/S STOVE CRAFT INDIA VERSUS CIT-V AND OTHERS IN ITA 2 0 TO 24/2015. ACCORDINGLY, IT WAS A PRAYER THAT THE ISSUE MAY BE REMA NDED TO THE AO WITH A DIRECTION TO GRANT NECESSARY RELIEF IN TERMS OF THE DIRECTIO N OF THE HONBLE HIGH COURT CONSIDERING THE PECULIAR FACTS AND CIRCUMSTANCES OF THE PRESE NT CASE. 3. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE M ATERIAL ON RECORD. IT IS SEEN THAT THE ASSESSEE IN THE FACTS OF THE PRESE NT CASE WAS ENGAGED IN THE MANUFACTURING OF RUBBER COMPOUND AND CARRYING ON MANUFAC TURING ACTIVITIES FROM VILLAGE BRAHMIN VALLEY, NALAGARH. ADMITTEDLY 80IC DEDU CTIONS WERE CLAIMED @ 100% OF ELIGIBLE PROFITS FROM 2008-09 ASSESSMENT YE AR ONWARDS. ON THE BASIS OF SUBSTANTIAL EXPANSION HAVING BEEN CARRIED OUT IN 2011-12 ASSESSMENT YEAR, THE ASSESSEE CLAIMED 80IC DEDUCTION @ 100%. THE SAID CLAIM WAS RESTRICTED TO 25% BY THE AO WHICH WAS AFFIRMED IN APPEALBY THE ITA 1045/CHD/2017 A.Y. 2012-13 PAGE 2 OF 2 CIT(A). IN THE LIGHT OF THE DECISION OF THE HON'BLE HIGH COUR T IN THE AFORESAID DECISION, ADMITTEDLY THE SAID ORDER CANNOT BE UPHELD. A PERUSAL OF THE AFORESAID DECISION WOULD SHOW THAT AFTER DISCUSSING THE FACT S OF THE SPECIFIC CASE IN PARA 51, THE ISSUE WAS CONCLUDED BY THE HON'BLE HIGH COURT IN THE FOLLOWING MANNER :- 55. THUS, IN VIEW OF THE ABOVE DISCUSSION, THESE APPEAL S ARE ALLOWED AND ORDERS PASSED BY THE ASSESSMENT OFFICER AS WELL AS THE APP ELLATE AUTHORITY AND THE TRIBUNAL IN THE CASE OF EACH ONE OF THE ASSESSEES, ARE QUASHED AND SET ASIDE, HOLDING AS UNDER: (A) SUCH OF THOSE UNDERTAKINGS OR ENTERPRISES WHICH WER E ESTABLISHED, BECAME OPERATIONAL AND FUNCTIONAL PRIOR TO 07/01/2003 AND HAVE UNDERTAKEN SUBSTANTIAL EXPANSION BETWEEN 07/01/2003 UPTO 01/04/2012, SHOUL D BE ENTITLED TO BENEFIT OF SECTION 80-IC OF THE ACT, FOR THE PERIOD FOR WHICH THEY WERE NOT ENTITLED TO THE BENEFIT OF DEDUCTION UNDER SECTION 80-IB. (B) SUCH OF THOSE UNITS WHICH HAVE COMMENCED PRODUCTION AFTER 07/01/2003 AND CARRIED OUT SUBSTANTIAL EXPANSION PRIOR TO 01/04/20 12, WOULD ALSO BE ENTITLED TO BENEFIT OF DEDUCTION AT DIFFERENT RATES OF PERCENTA GE STIPULATED UNDER SECTION 80-IC. (C) SUBSTANTIAL EXPANSION CANNOT BE CONFINED TO ONE EXP ANSION. AS LONG AS REQUIREMENT OF SECTION 80-IC (8) (IX) IS MET, THERE CAN BE NUMBER OF MULTIPLE SUBSTANTIAL EXPANSIONS. (D) CORRESPONDINGLY, THERE CAN BE MORE THAN ONE INITIAL ASSESSMENT YEARS. (E) WITHIN THE WINDOW PERIOD OF 07/01/2013 UPTO 01/04/2 012, AN UNDERTAKING OR AN ENTERPRISE CAN BE ENTITLED TO DEDUCTION @100% FOR A PERIOD OF MORE THAN FIVE YEARS. (F) ALL THIS, OF COURSE, IS SUBJECT TO A CAP OF TEN YEARS. [SECTION 80-IC(6)]. (G) UNITS CLAIMING DEDUCTION UNDER SECTION 80-IC SHALL NOT BE ENTITLED TO DEDUCTION UNDER ANY OTHER SECTION, CONTAINED IN CHA PTER VI-A OR SECTION 10A OR 10B OF THE ACT [SECTION 80-IB(5)]. 4. SINCE THE LEGAL POSITION ON THE FACTS STANDS ENUNCIATED BY THE HON'BLE COURT, I DEEM IT APPROPRIATE TO SET ASIDE THE ISSUE BACK TO THE FILE OF ASSESSING OFFICER WITH A DIRECTION TO GRANT NECESSARY RELIEF IN TERMS O F THE AFORESAID DECISION. ACCORDINGLY, IN THE LIGHT OF THE SUBMISSIONS OF THE P ARTIES BEFORE THE BENCH, THE ISSUE IS RESTORED BACK TO THE FILE OF THE AO WIT H THE DIRECTION TO PASS A SPEAKING ORDER IN ACCORDANCE WITH LAW AFTER GIVIN G THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD. 5. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 01.03. 2018. SD/- (DIVA SINGH) JUDICIAL MEMBER POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR ASSTT. REGISTRAR ITAT,CHANDIGARH .