U.K. Enterprises, Parwanoo V. DCIT, Circle , Parwanoo

ITA 1207/CHANDI/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5181 (ITAT-CHANDIGARH)
• Duration Of Justice: 6 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 07-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, SMC, CHANDIGARH BEFORE MS. DIVA SINGH, JUDICIAL MEMBER ITA NO. 1207/CHD/2017 ASSESSMENT Y EAR: 2013-14 M/S U.K.ENTERPRISES, VS. THE DCIT, PLOT NO. 12, SECTOR 1, CIRCLE, PARWANOO, PARWANOO,DISTT. SOLAN(HP). PARWANOO. PAN NO. AACFU0147N & ITA NO. 1208/CHD/2017 ASSESSMENT Y EAR: 2013-14 M/S USAKA ELECTRICALS, VS. THE DCIT, PLOT NO. 3-, SECTOR 1, CIRCLE, PARWANOO, PARWANOO,DISTT. SOLAN(HP). PARWANOO. PAN NO. AABFU6800B (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SURINDER BABBAR RESPONDENT BY : SMT. CHANDER KANTA, SR.DR DATE OF HEARING : 13.12.2017 DATE OF PRONOUNCEMENT : 28.02.2018 ORDER BOTH THE PRESENT APPEALS HAVE BEEN FILED BY THE DIFFEREN T ASSESSEES ASSAILING THE CORRECTNESS OF THE SEPARATE ORDERS DATED 30.05.2017 OF LD. CIT(APPEALS) SHIMLA PERTAINING TO 2013-14 ASSESSMENT YEAR. 2. IT WAS A STAND OF THE PARTIES BEFORE THE BENCH THAT THE POINTS AT ISSUE ARE IDENTICAL IN BOTH THE APPEALS AND ARE COVERED BY THE DECISION OF THE JURISDICTIONAL HIGH COURT DATED 28/11/2017 IN THE CASE OF M/S STOVE CRAFT INDIA VERSUS CIT-V AND OTHERS IN ITA 20 TO 24/2015 EX CEPT FOR THE DISTINCTION THAT IN ITA 1207/CHD/2017 IN THE CASE OF U.K. ENTERPRISES , YEAR UNDER CONSIDERATION IS THE 7 TH YEAR OF CLAIM TAKING 2007-08 AS THE FIRST YEAR OF CLAIM AND IN USAKA ELECTRICALS I.E. ITA 1208/CHD/2017, IT IS THE 9 TH YEAR. IN THE LIGHT OF THE SAID FACTS, IT WAS THE SUBMISSION THAT THE ISSUE S MAY BE REMANDED TO THE AO FOR GRANT OF NECESSARY RELIEF. 3. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE M ATERIAL ON RECORD. ADDRESSING THE FACTS IN ITA 1207/CHD/2017, FIRST IT IS SEEN THAT THE ASSESSEE ITA 1207&1208/CHD/2017 A.Y. 2013-14 PAGE 2 OF 3 IS ENGAGED IN MANUFACTURING OF SHEET METAL COMPONENTS AND SUBMERSIBLE PUMPS AND 100% DEDUCTION ON THE ELIGIBLE PROFITS THEREFRO M WAS CLAIMED U/S 80IC. IN VIEW OF THE FACT THAT 100% DEDUCTION OF THE ELIGIBLE PROFITS FOR THE FIVE YEARS PERIOD STARTING FROM 2007-08 TO 2011-12 STOOD ALLO WED, THE CLAIM OF HAVING CARRIED SUBSTANTIAL EXPANSION IN THE 2012-13 ASSES SMENT YEAR WAS NOT ACCEPTED RELYING UPON THE DECISION OF THE ITAT DATED 27.05.2015 IN TH E CASE OF HYCRON ELECTRONICS V ITO. THE SAID VIEW IN TERMS OF THE DECISION OF THE JURISDICTIONAL HIGH COURT IS NO LONGER GOOD LAW. IT IS SEEN THAT THE HON'BLE HIGH COURT IN THE AFORESAID DECISION AFTER CONSIDERING THE C LAIM OF CARRYING OUT SUBSTANTIAL EXPANSION WHERE THE CLAIM OF 100% DEDUCTIO N OF THE ELIGIBLE PROFIT STOOD ALLOWED IN THE INITIAL FIVE YEARS HELD AFTER EXAMININ G THE FACTS OF THE CASES BEFORE IT THAT : 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)]. 3.1 SINCE THE CLAIM OF CARRYING OUT THE SUBSTANTIAL EXPANS ION IN THE RESPECTIVE YEARS HAS NOT BEEN EXAMINED BY THE TAX AUT HORITIES, THE ISSUES ARE RESTORED BACK TO THE FILE OF THE AO FOR GRANTING NECESSAR Y RELIEF IN ACCORDANCE WITH LAW. SAID ORDER WAS PRONOUNCED IN THE OPEN COURT A T THE TIME OF HEARING ITSELF. 4. IN ITA 1208/CHD/2017, IT IS SEEN THAT HEREIN THE ASSE SSEE IS ENGAGED IN MANUFACTURING OF ELECTRICAL GOODS AND COMPONENTS. THE CLA IM OF HAVING CARRIED OUT SUBSTANTIAL EXPANSION IN 2010-11 ASSESSMENT YEAR WAS SIMILARLY FOR THE PURPOSE OF GRANT OF 100% DEDUCTION U/S 80IC WA S REJECTED BY THE TAX ITA 1207&1208/CHD/2017 A.Y. 2013-14 PAGE 3 OF 3 AUTHORITIES FOR SIMILAR REASONS IN VIEW OF THE FACT THAT 100% DEDUCTION OF THE ELIGIBLE PROFITS U/S 80IC STOOD GRANTED IN THE FIFTH YEAR PER IOD STARTING FROM 2005-06 TO 2009-10 ASSESSMENT YEAR. ACCORDINGLY, FOR REASONS IDENTICAL AS IN ITA 1207/CHD/2017 WITH IDENTICAL DIRECTIONS, THE ISSUES AR E RESTORED BACK TO THE FILE OF THE AO WITH THE DIRECTION TO GRANT NECESSAR Y RELIEF. SAID ORDER WAS PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ITSELF. 5. IN THE RESULT, APPEALS OF THE ASSESSEES ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH FEB., 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 .