M/s Shrishti Technology, Baddi V. DCIT, Circle , Parwanoo

ITA 1047/CHANDI/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5189 (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. 1047 & 1048/CHD/2017 A.Y: 2012-13 & 2013-14 M/S SHRISHTI TECHNOLOGIES, VS. THE DCIT, PLOT NO. 123, EPIP PHASE-1, CIRCLE, JHARMAJRI, BADDI (SOLAN). PARWANOO. PAN NO. ABAFS7294P (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 APPEALS HAVE BEEN FILED BY THE SAME ASSES SEE ASSAILING THE CORRECTNESS OF THE SEPARATE ORDERS DATED 26.04.2017 OF LD. CIT(APPEALS) SHIMLA PERTAINING TO 2012-13 ASSESSMENT YEAR ON IDENTICA L GROUNDS. ACCORDINGLY, FOR READY REFERENCE, THE GROUNDS FROM ITA 10 47/CHD/2017 ARE REPRODUCED HEREUNDER: 1. THE ID. CIT(A) IS WRONG IN DISALLOWING THE BENEFIT OF SUBSTANTIAL EXPANSION U/S 80IC(2) IN RESPECT TO UNIT-I BY HOLDING THAT BENEFI T OF SUBSTANTIAL EXPANSION IS ALLOWABLE ONLY TO THE UNDERTAKING WHICH WERE EXISTI NG AS ON 07.01.2003. 2. THE ID. CIT(A) IS WRONG IN DISALLOWING THE BENEFIT OF SUBSTANTIAL EXPANSION U/S 80IC(2) IN RESPECT TO UNIT-II BY HOLDING THAT BENEF IT 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. IN THE FACTS OF THE PRESENT CASE, THE ASSESSEE CONSISTIN G OF TWO UNITS DERIVES INCOME FROM MANUFACTURING OF FANS. THE COMMERCIAL PRODUCTION IN UNIT-1 ITA 1047&1048/CHD/2017 A.Y. 2012-13, 2013-14 PAGE 2 OF 3 WAS STARTED ON 21.1.2005 AND UNIT-2, IT WAS SUBMITTED, ON 29.01.2009. THE 80IC DEDUCTION WAS CLAIMED IN REGARD TO THIS UNIT. THE AS SESSEE CLAIMED TO HAVE CARRIED OUT SUBSTANTIAL EXPANSION DURING FINANCIAL YEAR 2009-10 AND STARTED CLAIMING DEDUCTION @ 100% FROM ASSESSMENT YEAR 2010-1 1 TAKING IT TO BE THE INITIAL ASSESSMENT YEAR. THE AO QUA THE CLAIM OF 1 00% DEDUCTION RESTRICTED IT TO THE EXTENT OF 25% AFTER REQUIRING THE AS SESSEE TO ADDRESS THE ISSUES. THE ASSESSEE'S CONTENTION THAT UNIT-1 BE REDEFINE D AS THIRD ASSESSMENT YEAR ON THE BASIS OF SUBSTANTIAL EXPANSION WA S NOT ACCEPTED AS ACCORDING TO THE AO, IT WAS 8 TH ASSESSMENT YEAR. QUA UNIT-2 THE AO CONSIDERING THE FACT THAT THE COMMERCIAL PRODUCTION STAR TED ON 29.01.2009, THE CLAIM OF SUBSTANTIAL EXPANSION ON 31.12.2010 WAS CONSIDE RED AS NOT IMPACTING THE CLAIM OF 100% DEDUCTION OF ELIGIBLE PROFITS AS TH E CLAIM IT WAS CONSIDERED COULD BE ALLOWED UPTO 2013-14 AS 2012-13 WAS THE FOURTH YEAR WHEREIN CLAIM OF 100% DEDUCTION COULD BE ALLOWED. 4. THE ISSUES WERE CHALLENGED IN APPEAL RESULTING IN UPHOLD ING THE ASSESSMENT ORDER IN BOTH THE YEARS. THE ISSUE OF SUBST ANTIAL EXPANSION QUA DEDUCTION U/S 80IC IS NO LONGER RES-INTEGRA AS IT HAS BEEN A SUBJ ECT MATTER FOR CONSIDERATION BEFORE THE HON'BLE HIGH COURT IN THE AFORESA ID DECISION. THE COURT HAS BEEN PLEASED TO HOLD AFTER SETTING OUT THE FAC TS OF THE SAID CASE IN PARA 51 TO HOLD AS UNDER : 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)]. ITA 1047&1048/CHD/2017 A.Y. 2012-13, 2013-14 PAGE 3 OF 3 4.1. IT IS NOTED THAT IN THE FACTS OF THE SAID CAS E, THE FACT OF EXPANSION HAVING BEEN CARRIED OUT WAS ACCEPTED BY THE REVENUE. IN THE FACTS OF THE PRESENT CASE, THE ISSUES NEED TO BE EXAMINED. THE NECESSARY DE TAILS HAVE NOT BEEN ADDRESSED AND BROUGHT ON RECORD BY THE PARTIES. ACC ORDINGLY, IN THE LIGHT OF THE DECISION OF THE HON'BLE HIGH COURT ACCEPTING THE PRAYER OF THE PARTIES, I DEEM IT APPROPRIATE TO SET ASIDE THE ISSUE BACK TO THE FILE OF ASSESSING OFFICER WITH A DIRECTION TO GRANT NECESSARY RELIEF BY WAY OF PASSING A SPEAKING ORDER IN ACCORDANCE WITH LAW AFTER GIVING THE ASSESSEE A REASON ABLE OPPORTUNITY OF BEING HEARD. 5. IN THE RESULT THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 1 ST MARCH 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.