M/s Micropet Industries, Kala Amb V. Deputy Commissioner Of Income Tax, Shimla

ITA 105/CHANDI/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 4906 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-06-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 02-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Section: 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCHES B, CHANDIGARH BEFORE MS. DIVA SINGH, JUDICIAL MEMBER AND SHRI B.R.R.KUMAR, ACCOUNTANT MEMBER ITA NO. 105/CHD/2018 ASSESSMENT YEAR: 2014-15 M/S MICROPET INDUSTRIES, VS THE DCIT, VILLAGE-OGLI, NAHAN ROAD, CIRCLE, KALA AMB, DISTT. SIRMOUR(HP). SIRMOUR (HP). PAN : AAMFM5828L (A PPELLANT) (RESPONDENT) APPELLANT BY : SHRI ATUL GOYAL, CA RESPONDENT BY : SHRI MANJIT SINGH, SR.DR DATE OF HEARING : 23.05.2018 DATE OF PRONOUNCEMENT : 12.06. 2018 ORDER PER DIVA SINGH THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE ASSAILIN G THE CORRECTNESS OF THE ORDER DATED 22.11.2017 OF CIT(A), SHIM LA PERTAINING TO 201415 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS : 1. THAT THE ORDER OF THE WORTHY CIT(A) IS BEING CHALLE NGED ON THE GROUND OF IT BEING ILLEGAL, ARBITRARY & HAVING BEEN PASSED IN HASTE WITHOUT CONSIDERING THE JUDICIAL PRONOUNCEMENTS RELIED UPON BY THE APPELLAN T DURING THE COURSE OF THE APPELLANT PROCEEDINGS. 2. THAT THE WORTHY CIT(A) ERRED IN FACTS & IN LAW IN U PHOLDING THE DISALLOWANCE OF DEDUCTION CLAIMED BY THE APPELLANT U/S 80IC OF THE INCOME TAX ACT, 1961 & THEREFORE THE SAID ORDER DESERVES TO BE SET ASIDE. 2. THE LD. AR SUBMITTED THAT THE POINT AT ISSUE IS FU LLY COVERED IN FAVOUR OF THE ASSESSEE BY VIRTUE OF THE DECISION OF THE JU RISDICTIONAL HIGH COURT IN THE CASE OF M/S STOVE CRAFT INDIA VERSUS CIT-V AND OTHERS IN ITA 20 TO 24/2015. 3. ELABORATING THE FACTS, IT WAS HIS SUBMISSION THAT T HE YEAR UNDER CONSIDERATION IS THE 8 TH YEAR AND THE SUBSTANTIAL EXPANSION HAS BEEN CARRIED OUT BY THE ASSESSEE IN 2011-12 ASSESSMENT YEA R. ACCORDINGLY, IT WAS HIS SUBMISSION THAT IN TERMS OF THE DECISION OF THE JUR ISDICTIONAL HIGH COURT, RELIEF MAY BE DIRECTED TO BE GRANTED. IT WAS C LARIFIED THAT ON THE ISSUE OF SUBSTANTIAL EXPANSION HAVING BEEN CARRIED OUT IN 2011-12 ITA 105/CHD/2018 A.Y. 2014-15 PAGE 2 OF 3 ASSESSMENT YEAR, THE AO HAS ALREADY EXAMINED THE FACTS AND HAS NOT MADE ANY ADDITIONS. ACCORDINGLY, NO VERIFICATION OF FACTS IS NECESSARY. 4. THE LD. SR.DR ON THE OTHER HAND, SUBMITTED THAT THE FA CTS NEED TO BE VERIFIED. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IT IS SEEN THAT THE ASSESSEE FIRM WAS ENGAGED IN THE BUSINESS OF MANUFACTURING OF PET BOTTLES. THE AO REQUIRED THE ASSESS EE TO JUSTIFY THE CLAIM OF 100% DEDUCTION ON THE ELIGIBLE PROFITS AS 100% D EDUCTION OF ELIGIBLE PROFITS U/S 80IC STOOD CLAIMED FOR FIVE YEARS STAR TING FROM 2007-08 TO 2011-12 ASSESSMENT YEARS AND THE YEAR UNDER CO NSIDERATION WAS THE 8 TH YEAR. RELYING UPON DECISION OF ITAT IN THE CASE OF HYCR ON ELECTRONICS V ITO DATED 27.05.2015IN ITA 798/CHD/2012, C LAIM WAS RESTRICTED TO 25%. IN APPEAL BEFORE THE CIT(A), SAID ORDER W AS CONFIRMED TAKING NOTE OF THE FACT THAT THE MANUFACTURING ACTIVITY/OP ERATION WAS STARTED ON 06.06.2006 AND THE INITIAL CLAIM FOR DEDUCTION U/S 80IC WAS 2007-08. WE FIND THAT THE ISSUE IS NO LONGER RES-INTEGRA A S THE JURISDICTIONAL HIGH COURT IN THE AFORESAID DECISION CONSIDERE D THE FACTS OF THE SPECIFIC CASE IN PARA 51 HAS COME TO THE FOLLOWING C ONCLUSION:- 55. THUS, IN VIEW OF THE ABOVE DISCUSSION, THESE APPEAL S ARE ALLOWED AND ORDERS PASSED BY THE ASSESSMENT OFFICER AS WELL AS THE APPELLATE AUTHORITY AND THE TRIBUNAL IN THE CASE OF EACH ONE OF THE ASS ESSEES, 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 07/01/20 03 AND HAVE UNDERTAKEN SUBSTANTIAL EXPANSION BETWEEN 07/01/2003 UPTO 01/04/2012, SHOULD BE ENTITLED TO BENEFIT OF SECTION 80-IC OF T HE ACT, FOR THE PERIOD FOR WHICH THEY WERE NOT ENTITLED TO THE BENEFIT OF DEDU CTION UNDER SECTION 80-IB. (B) SUCH OF THOSE UNITS WHICH HAVE COMMENCED PRODUCTION AFTER 07/01/2003 AND CARRIED OUT SUBSTANTIAL EXPANSION PRIOR TO 01/0 4/2012, WOULD ALSO BE ENTITLED TO BENEFIT OF DEDUCTION AT DIFFERENT RATES OF PERCENTAGE 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, TH ERE 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 DED UCTION @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, CONT AINED IN CHAPTER VI-A OR SECTION 10A OR 10B OF THE ACT [SECTION 80-IB(5)]. ITA 105/CHD/2018 A.Y. 2014-15 PAGE 3 OF 3 5.1 ACCORDINGLY, IN VIEW OF THE ABOVE, THE ISSUE IS REMANDED TO THE AO TO GRANT NECESSARY RELIEF IN ACCORDANCE WITH LAW AS PER THE RULING OF THE JURISDICTIONAL HIGH COURT. SAID ORDER WAS PRONOUNC ED IN THE OPEN COURT AT THE TIME OF HEARING ITSELF. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 12.06. 2018. SD/- SD/- (DR.B.R.KUMAR) (DIVA SINGH) ACCOUNTANT MEMBER 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.