M/s Him Overseas, Chandigarh V. ACIT, C-4(1), Chandigarh

ITA 1261/CHANDI/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 4913 (ITAT-CHANDIGARH)
• Duration Of Justice: 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-06-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 24-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHANDER KANTA
• Section: 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH A, CHANDIGARH BEFORE MS. DIVA SINGH, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO. 1261/CHD/2 017 ASSESSMENT YEAR: 2013-14 M/S HIM OVERSEAS, PLOT NO.181/12, VS. THE AC IT, INDUSTRIAL AREA, PHAES-1, CIRCLE 4(1), CHANDIGARH. CHANDIGARH. PAN NO. : AABFH7617P (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VINEET KRISHAN RESPONDENT BY : SMT. CHANDERKANTA, ADDL CIT DATE OF HEARING : 05.04.2018 DATE OF PRONOUNCEMENT : 18/06/2018 ORDER PER DIVA SINGH THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE ASSAILIN G THE CORRECTNESS OF THE ORDER DATED 08/06/2017 OF CIT(A) GU RGAON PERTAINING TO 2013-14 ASSESSMENT YEAR ON VARIOUS GROUNDS INCLUDING LAC K OF OPPORTUNITY BEFORE THE CIT(A). 2. HOWEVER, THE LD. AR INVITING ATTENTION TO GROUND NUMBE RS 4 AND 5 SUBMITTED THAT HIS LIMITED PRAYER IN TERMS OF THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF M/S STOVE CRAFT INDIA VERSUS C IT-V AND OTHERS IN ITA 20 TO 24/2015 IS THAT THE ISSUE MAY BE REMANDED T O THE ASSESSING OFFICER IN ORDER TO GRANT NECESSARY RELIEF ON ACCOUNT OF SUBSTAN TIAL EXPANSION HAVING BEEN CARRIED OUT BY THE ASSESSEE. 3. THE LD. SR.DR CONSIDERING THE RECORD HAD NO OBJECTION TO THE SAID PRAYER. 3.1 THE SPECIFIC GROUNDS READ AS UNDER : 4. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CAS E, THE ID. COMMISSIONER OF INCOME TAX (APPEALS) GRAVELLY ERRED IN UPHOLDING THE ACTION OF THE ID. ASSESSING OFFICER IN RESTRICTING THE DEDUCTION UNDER SECTION 80IC OF THE INCOME TAX ACT, 1961 AT 25% AS AGAINST 100% CLAIMED BY THE APPELLANT AS THE SUBSTANTIAL EXPANSION WAS DONE BY THE APPELLANT WHICH FACT HAS NOT BEEN CONTROVERTED BY THE ID. ASSESSING OFFICER. 5. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ID. COMMISSIONER OF INCOME TAX (APPEALS) GRAVELLY ERRED IN UPHOLDING THE ACTION OF THE ID. ASSESSING OFFICER WHO HAD RESTRICTED ITA-1261/CHD/2017 A.Y. 2013-14 2 THE DEDUCTION UNDER SECTION 80IC @ 25% INSTEAD OF 1 00% DEDUCTION CLAIMED BY THE APPELLANT RESULTING IN ADDITION OF RS. 48,33,964/-. 4. WE HAVE HEARD THE SUBMISSIONS AND PERUSED THE MATE RIAL AVAILABLE ON RECORD. IT IS SEEN THAT IN THE FACTS OF THE PRESENT CAS E THE ASSESSEE FIRM IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF GALVANISED FENCE FITTINGS, SCAFFOLDING AND ACCESSORIES ETC. FOR EXPORT AND DOMESTIC MA RKET. THE MAIN INGREDIENTS OF RAW MATERIALS USED ARE DESCRIBED AS IRON FLA TS, BARS, RODS, ROUNDS ZINC, ALUMINUM, IRON CASTING, FORGINGS, NUTS, BOLTS AND CONSUMABLES, PACKING MATERIALS. THE ASSESSEE FIRM WAS FOUND TO HAVE ST ARTED ITS CLAIM FOR DEDUCTION UNDER SECTION 80IC FROM 2005-06 ASSESSMENT Y EAR SINCE THE CLAIM OF 100% DEDUCTION FOR ELIGIBLE PROFITS STOOD EXHAUSTED FOR 5 YEARS. THE ASSESSING OFFICER DENIED THE CLAIM OF 100% DEDUCTION WHICH I S CLAIMED ON THE GROUNDS THAT SUBSTANTIAL EXPANSION HAD BEEN CARRIED OUT IN 200910 FINANCIAL YEAR ON THE REASONING THAT THE YEAR UNDER CONSIDERATIO N WAS THE 9 TH YEAR AND THUS, RELYING UPON THE DECISION OF THE ITAT DATED 27.05.20 15IN THE CASE OF HYCRON ELECTRONICS V ITO IN ITA 798/CHD/2012, THE CLAIM WAS RESTRICTED TO 25%. THE SAID CONCLUSION WAS UPHELD BY THE CIT(A) IN THE EX-PARTE PROCEEDINGS. HOWEVER, SINCE THE ISSUE IS NO LONGER RES-INTE GRA AS THE JURISDICTIONAL HIGH COURT IN THE AFORESAID DECISION CONSIDERE D THE FACTS OF THE SPECIFIC CASE IN PARA 51 HAS COME TO THE FOLLOWING CONCLUS ION:- 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-1261/CHD/2017 A.Y. 2013-14 3 5. ACCORDINGLY, IN VIEW OF THE ABOVE, THE ISSUE IS REMANDED TO THE AO TO GRANT NECESSARY RELIEF IN ACCORDANCE WITH LAW AS PE R 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 18/06/2018. SD/- SD/- (ANNAPURNA GUPTA) (DIVA SI NGH) 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.