M/s Classic Binding Industries, Baddi V. DCIT, Circle, Shimla

ITA 1377/CHANDI/2017

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8295 (ITAT-CHANDIGARH)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 19-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCHES A, CHANDIGARH BEFORE MS. DIVA SINGH, JUDICIAL MEMBER AND DR.B.R.R.KUMAR, ACCOUNTANT MEMBER ITA NO. 1377/CHD /2017 ASSESSMENT YEAR: 2014-15 M/S CLASSIC BINDING INDUSTRIES, VS THE DCIT, KHASRA NO. 677/3,VILLAGEKISHANPURA, CIRCLE, P.O.-GURUMAJRA, BADDI, SHIMLA. DISTT. SOLAN (H.P.). PAN : AAEFC4390H (A PPELLANT) (RESPONDENT) APPELLANT BY : SHRI HARRY RIKHY RESPONDENT BY : SMT. CHANDER KANTA, SR.DR DATE OF HEARING : 16.01.2018 DATE OF PRONOUNCEMENT : 21.02.2018 ORDER PER DIVA SINGH, JM THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A SSAILING THE CORRECTNESS OF THE ORDER DATED 25/07/2017 OF CIT(A) SHIMLA PERTAINING TO 2014 15 ASSESSMENT YEAR. 2. THE LD. AR AT THE TIME OF HEARING INVITING ATTE NTION TO THE GROUNDS RAISED BY THE ASSESSEE IN THE PRESENT APPEAL SUBMITTED THAT THE P OINT AT ISSUE IS FULLY COVERED IN FAVOUR OF THE ASSESSEE BY VIRTUE OF THE DECISION OF THE HONB LE 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. INVITING ATTENTION TO THE ASSESSMENT ORDER IT WAS S UBMITTED BY THE LD. AR THAT IN THE FACTS OF THE PRESENT CASE, SUBSTANTIAL EXPANSIO N WAS CARRIED OUT BY THE ASSESSEE IN 2011 12 ASSESSMENT YEAR WHICH CLAIM OF THE ASSESSEE WAS NOT ACCEPTED AND THE CLAIM OF 100% DEDUCTION WAS RESTRICTED TO 25%. THE SAID ISSUE, IT WAS SUBMITTED, HAS BEEN CONSIDERED BY THE JURISDICTIONAL HIGH COURT. ACCORDINGLY, IT WAS HIS PRAYER THAT IN TERMS OF THE SAID DECISION, RELIEF MAY BE GRANTED TO THE ASSESSEE. 3. THE LD. SR. DR ON A CONSIDERATION OF THE MATERIA L AVAILABLE ON RECORD AND THE ISSUE RAISED THEREIN HAD NO OBJECTION IF THE ISSUE IS REM ANDED BACK WITH AN APPROPRIATE DIRECTION. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS SEEN THAT THE ASSESSEE IN THE FACTS OF THE PR ESENT CASE WAS ENGAGED IN THE MANUFACTURING OF BINDING MATERIAL AND ALLIED PRODUC TS AND CARRYING OUT THE SAID ACTIVITY FROM NALAGARH, DISTRICT SOLAN (HP). THE CLAIM OF 10 0% HUNDRED PERCENT DEDUCTION UNDER SECTION 80IC OF THE ELIGIBLE PROFITS WAS RESTRICTED TO 25% BY THE AO ON THE REASONING THAT THE YEAR UNDER CONSIDERATION WAS THE 9 TH YEAR OF CLAIM OF DEDUCTION AS DEDUCTION @ 100% ITA 1377/CHD/2017. A.Y. 2014-15 PAGE 2 OF 2 HAD ALREADY BEEN CLAIMED IN THE INITIAL 5 YEARS AND THUS THE CLAIM HAVING CARRIED OUT SUBSTANTIAL EXPANSION IN 201112 ASSESSMENT YEAR WA S NOT ACCEPTED BY THE AO. WE NOTE THAT THE ISSUE IS NO LONGER RES-INTEGRA AS THE JURI SDICTIONAL HIGH COURT IN VERY CATEGORICAL TERMS CONSIDERING THE ARGUMENTS OF THE PARTIES HAS DECIDED THE ISSUE 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, SHOULD BE ENTITLED TO BENEFIT OF SECTION 80-IC OF THE ACT, FOR THE PER IOD 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 PERCE NTAGE 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 CHAPTER VI-A OR SECTION 10A OR 10B OF THE ACT [SECTION 80-IB(5)]. 4.1 ACCORDINGLY, IN THE LIGHT OF THE ABOVE FACTUAL POSITION CONSIDERING THE LAW THEREON, THE ISSUE IS RESTORED TO THE ASSESSING OFFICER WITH A DIRECTION TO GRANT NECESSARY RELIEF IN ACCORDANCE WITH LAW, FOLLOWING THE DECISION OF THE JURISDICTIONAL HIGH COURT. NEEDLESS TO SAY THAT ASSESSEE SHALL BE AFFORDED A REASONABLE OP PORTUNITY OF BEING HEARD. SAID ORDER WAS PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ITSELF. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST FEB.,2018. SD/- SD/- ( DR.B.R.KUMAR) ( DIVA SING H) 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.