M/s Vanser Metallics, Chandigarh V. DCIT, Circle, Parwanoo

ITA 1384/CHANDI/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5298 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 20-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Section: 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH B, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS.ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO.1383/CHD/2017 (ASSESSMENT YEARS : 2013-14) M/S SANSUI ELECTRONICS, VS. THE DCIT, PLOT NO. 10A, SECTOR 1, CIRCLE PARWANOO, PARWANOO, H.P. H.P. PAN NO. AAXFS7773F ITA NO.1384/CHD/2017 (ASSESSMENT YEARS : 2013-14) M/S VANSER METALLICS, VS. THE DCIT, 313, INDUSTRIAL AREA, CIRCLE PARWANOO, H.P. PHASE-II, CHANDIGARH PAN NO. AAEFV7622H APPELLANT BY : SH. MANOJ KUMAR RESPONDENT BY : SH. MANJIT SINGH & ITA NO.1389/CHD/2017 (ASSESSMENT YEAR : 2014-15) M/S R.R. LAMPS, VS. THE DCIT, CIRCLE, VILLAGE KIRPALPUR, SHIMLA PO NALAGARH, DISTT SOLAN. PAN NO. AAIFR7427E APPELLANT BY : SH. VINEET KRISHAN RESPONDENT BY : SH. MANJIT SINGH DATE OF HEARING : 16.01.2018 DATE OF PRONOUNCEMENT: 16.01.2018 2 ORDER PER BENCH: THE CAPTIONED APPEALS HAVE BEEN PREFERRED BY THE DIFFERENT ASSESSEES AGAINST THE SEPARATE ORDERS OF LD. COMMISSIONER OF INCOME TAX (APPEALS), [HEREINAFTER REFERRED TO AS CIT(APPEALS)], SHIMLA DATED 17.7.2017 (ITA NOS. 1383 & 1389/CHD/2017) & 25.04.2017 (ITA NO. 1384CHD/2017 ) RELATING TO THE RESPECTIVE ASSESSMENT YEARS. 2. THE IDENTICAL ISSUE RAISED IN ALL THE APPEALS RE LATES TO THE ACTION OF THE CIT(A) IN DISALLOWING THE CLAIM OF DEDUCTION @ 100% U/S 80IC OF THE INCOME-TAX ACT, 1 961 (IN SHORT 'THE ACT') ON ACCOUNT OF SUBSTANTIAL EXPANSIO N OF THE UNIT. IN THE APPEAL FOR ASSESSMENT YEAR 2014-15 (ITA NO. 1389/CHD/2017), IN ADDITION TO ABOVE IDENTICAL ISSU E RAISED IN THE GROUNDS, SOME OTHER GROUNDS HAVE BEEN RAISED . HOWEVER, THE LD. COUNSEL FOR THE ASSESSEE, SHRI VIN EET KRISHAN, HAS NOT PRESSED GROUND NOS. 5, 6 & 7 RAISE D IN THE APPEAL AND HAS GIVEN HIS REMARKS TO THIS EFFECT IN THE MEMORANDUM OF APPEAL ITSELF, THEREFORE, THESE GROUN DS ARE DISMISSED AS NOT PRESSED. 3. DURING THE COURSE OF HEARING BEFORE US, IT WAS B ROUGHT TO OUR NOTICE THAT THE ISSUE INVOLVED IN THESE APPE ALS HAS ALREADY BEEN ADJUDICATED BY THE HONBLE HIMACHAL PR ADESH HIGH COURT VIDE THEIR ORDER DT. 28 NOVEMBER 2017 IN THE GROUP OF CASES WITH THE LEAD CASE TITLED AS M/S STO VEKRAFT INDIA VS. COMMISSIONER OF INCOME TAX, ITA NO.20 OF 2015, 3 AND IT WAS POINTED OUT THAT THE HONBLE HIGH COURT HAD DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE, HOLDIN G THAT THERE IS NO BAR IN THE SAID SECTION DENYING THE B ENEFIT OF HUNDRED PERCENT DEDUCTION TO NEW UNITS UNDERTAKING SUBSTANTIAL EXPANSION. OUR ATTENTION WAS DRAWN TO T HE RELEVANT CONCLUSIONS OF THE HONBLE HIGH COURT IN T HIS REGARD AT PARA 55 OF THE ORDER AS UNDER: 55.THUS, IN VIEW OF THE ABOVE DISCUSSION, THESE APPEALS 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 ASSESSES, ARE QUASHED AND SET ASIDE, HOLDING AS UNDER: (A) SUCH OF THOSE UNDERTAKINGS OR ENTERPRISES WHICH WERE ESTABLISHED, BECAME OPERATIONAL AND FUNCTIONAL PRIOR TO 7.1.2003 AND HAVE UNDERTAKEN SUBSTANTIAL EXPANSION BETWEEN 7.1.2003 UPTO 1.4.2012, SHOULD BE ENTITLED TO BENEFIT OF SECTION 80-IC OF THE ACT, FOR THE PERIOD FOR WHICH THEY WER E NOT ENTITLED TO THE BENEFIT OF DEDUCTION UNDER SECTION 80-IB. (B) SUCH OF THOSE UNITS WHICH HAVE COMMENCED PRODUCTION AFTER 7.1.2003 AND CARRIED OUT SUBSTANTIAL EXPANSION PRIOR TO 1.4.2012, WOULD ALSO BE ENTITLED TO BENEFIT OF DEDUCTION AT DIFFERE NT RATES OF PERCENTAGE STIPULATED UNDER SECTION 80-IC. (C) SUBSTANTIAL EXPANSION CANNOT BE CONFINED TO ONE EXPANSION. AS LONG AS REQUIREMENT OF SECTION 80-IC(8)(IX) IS MET, THERE CAN BE NUMBER OF MULTIPL E SUBSTANTIAL EXPANSIONS. (D) CORRESPONDINGLY, THERE CAN BE MORE THAN ONE INITIAL ASSESSMENT YEARS. (E) WITHIN THE WINDOW PERIOD OF 7.1.2013 UPTO 1.4.2012, 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 4. HOWEVER, LD. DR FAIRLY ADMITTED THAT THE ISSUE I S SQUARELY COVERED BY THE ABOVE DECISION OF THE HON'B LE JURISDICTIONAL HIGH COURT. IT WAS, HOWEVER, SUBMITT ED THAT THE ISSUE BE RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR VERIFICATION AS TO WHETHER THE ASSESSEE HAS ACTUALL Y CARRIED OUT THE SUBSTANTIAL EXPANSION TO BE ENTITLED TO CLA IM DEDUCTION U/S 80IC OF THE ACT. 5. WE DO NOT AGREE TO THE ABOVE CONTENTION RAISED B Y THE REVENUE AT THIS STAGE. A PERUSAL OF THE ORDER OF TH E ASSESSING OFFICER REVEALS THAT THE ASSESSING OFFICE R HAS NOT DISPUTED THAT THE ASSESSEE UNIT HAS CARRIED OUT SUB STANTIAL EXPANSION AS PROVIDED UNDER CLAUSE (B) OF SUB SECTI ON (2) READ WITH CLAUSE (IX) OF SUB SECTION (7) OF SECTION 80IC OF THE ACT. ALMOST SIMILAR VIEW HAS ALSO BEEN TAKEN BY THE HON'BLE HIMACHAL PRADESH HIGH COURT IN THE CASE OF M/S STOVEKRAFT INDIA VS. COMMISSIONER OF INCOME TAX (S UPRA) IN THE FOLLOWING CONCLUDING PARA OF THE ORDER:- 58. ON FACTS, WE MAY CLARIFY THAT THE REVENUE HAS NOT DISPUTED, (A) THE UNITS HAVING CARRIED OUT SUBSTANTIAL EXPANSION WITHIN THE DEFINITION OF THE SECTION, (B) THEIR ENTITLEMENT AND EXTENT OF DEDUCTION WOULD BE DEPENDENT UPON INTERPRETATION OF THE RELEVANT PROVISIONS. WE, THEREFORE, DO NOT FIND ANY JUSTIFICATION AT THI S STAGE TO GIVE THE ASSESSING OFFICER A SECOND INNINGS TO RE-E XAMINE UNDISPUTED FACTS. 5 6. IN VIEW OF THE ABOVE DISCUSSION, THE IMPUGNED OR DERS OF THE CIT(A) ARE SET ASIDE AND THE AO IS DIRECTED TO GRANT TO THE ASSESSEES DEDUCTION AT THE RATE OF HUNDRED PER CENT OF ITS ELIGIBLE PROFITS, AS PER THE RULING OF THE JUR ISDICTIONAL HIGH COURT IN THIS REGARD IN THE CASE OF M/S STOVE KRAFT INDIA VS. COMMISSIONER OF INCOME TAX (SUPRA). 7. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEES, THEREFORE, STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT SD/- SD/- (ANNAPURNA GUPTA ) (SANJAY GARG) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) DATED 16.01.2018 *RKK* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR