M/s Shree Balaji Enterprises, Baddi V. ITO, Baddi

ITA 1594/CHANDI/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5112 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 23-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES A, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER & MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO. 1594/CHD/2017 ASSESSMENT YEAR: 2014-15 M/S SHREE BALAJI ENTERPRISES, VS. THE ITO, BADDI, NEAR MICRO LAB LIMITED, H.P. VILLAGE-KATHA, BADDI, HIMACHAL PRADESH PAN NO. ABPFD7709E & ITA NOS. 1596/CHD/2017 ASSESSMENT YEAR: 2014-15 M/S ZENITH INTERNATIONAL, VS. THE ITO, VILLAGE BRAHMIN VELLY, BADDI, H.P. BADDI, NALAGARH, DISTT.SOLAN HIMACHAL PRADESH PAN NO. AACFZ4176G (APPELLANT) (RESPONDENT) APPELLANT BY : SH. MANOJ KUMAR RESPONDENT BY : SMT. CHANDERKANTA, ADDL CIT. DATE OF HEARING : 26.03.2018 DATE OF PRONOUNCEMENT : 26.03.2018 ORDER PER BENCH: THE CAPTIONED APPEALS HAVE BEEN PREFERRED BY THE AS SESSEES AGAINST THE SEPARATE ORDERS OF THE COMMISSIONER OF INCOME TAX 1596& 1597/CHD/2017 SHREE BALA JI ENTERPRISES & ZENITH INTERNATIONAL , HP 2 (APPEALS), [HEREINAFTER REFERRED TO AS CIT(A)], SHI MLA DATED 19.09.2017. 2. THE SOLE ISSUE RAISED IN THESE APPEALS RELATES T O THE ACTION OF THE CIT(A) IN DISALLOWING THE CLAIM OF DEDUCTION @ 100% US 80IC OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') ON ACCOUN T OF SUBSTANTIAL EXPANSION OF THE UNIT. 4. DURING THE COURSE OF HEARING BEFORE US, IT WAS B ROUGHT TO OUR NOTICE THAT THE ISSUE INVOLVED IN THESE APPEALS HAS ALREADY BEEN ADJUDICATED BY THE HONBLE HIMACHAL PRADESH HIGH CO URT VIDE THEIR ORDER DT. 28 NOVEMBER 2017 IN THE GROUP OF CASES WI TH THE LEAD CASE TITLED AS M/S STOVEKRAFT INDIA VS. COMMISSIONER OF INCOME TAX, ITA NO.20 OF 2015, AND IT WAS POINTED OUT THAT THE HON BLE HIGH COURT HAD DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE, HOLDIN G THAT THERE IS NO BAR IN THE SAID SECTION DENYING THE BENEFIT OF HUNDRED PERCENT DEDUCTION TO NEW UNITS UNDERTAKING SUBSTANTIAL EXPANSION. OUR AT TENTION WAS DRAWN TO THE RELEVANT CONCLUSIONS OF THE HONBLE HIGH COU RT IN THIS REGARD AT PARA 55 OF THE ORDER AS UNDER: 55.THUS, IN VIEW OF THE ABOVE DISCUSSION, THESE A PPEALS ARE ALLOWED AND ORDERS PASSED BY THE ASSESSMENT OFF ICER AS WELL AS THE APPELLATE AUTHORITY AND THE TRIBUNAL, I N THE CASE OF EACH ONE OF THE ASSESSES, ARE QUASHED AND SET AS IDE, HOLDING AS UNDER: (A) SUCH OF THOSE UNDERTAKINGS OR ENTERPRISES WHIC H WERE ESTABLISHED, BECAME OPERATIONAL AND FUNCTIONAL PRIO R TO 7.1.2003 AND HAVE UNDERTAKEN SUBSTANTIAL EXPANSION BETWEEN 7.1.2003 UPTO 1.4.2012, SHOULD BE ENTITLED TO BENEF IT OF SECTION 80-IC OF THE ACT, FOR THE PERIOD FOR WHICH THEY WERE NOT ENTITLED TO THE BENEFIT OF DEDUCTION UNDER SECT ION 80-IB. (B) SUCH OF THOSE UNITS WHICH HAVE COMMENCED PRODU CTION AFTER 7.1.2003 AND CARRIED OUT SUBSTANTIAL EXPANSIO N PRIOR 1596& 1597/CHD/2017 SHREE BALA JI ENTERPRISES & ZENITH INTERNATIONAL , HP 3 TO 1.4.2012, WOULD ALSO BE ENTITLED TO BENEFIT OF D EDUCTION AT DIFFERENT RATES OF PERCENTAGE STIPULATED UNDER SECT ION 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 MULTIPLE SUBSTANTIAL EX PANSIONS. (D) CORRESPONDINGLY, THERE CAN BE MORE THAN ONE INI TIAL ASSESSMENT YEARS. (E) WITHIN THE WINDOW PERIOD OF 7.1.2013 UPTO 1.4.2 012, 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 SH ALL NOT BE ENTITLED TO DEDUCTION UNDER ANY OTHER SECTION, C ONTAINED IN CHAPTER VI-A OR SECTION 10A OR 10B OF THE ACT [S ECTION 80- IB(5)]. 5. LD. DR FAIRLY ADMITTED THAT THE ISSUE IS SQUAREL Y COVERED BY THE ABOVE DECISION OF THE HON'BLE JURISDICTIONAL HIGH C OURT. IT WAS, HOWEVER, SUBMITTED THAT THE ISSUE BE RESTORED TO T HE FILE OF THE ASSESSING OFFICER FOR VERIFICATION AS TO WHETHER TH E ASSESSEES HAVE ACTUALLY CARRIED OUT THE SUBSTANTIAL EXPANSION TO B E ENTITLED TO CLAIM DEDUCTION U/S 80IC OF THE ACT. 6. WE DO NOT AGREE TO THE ABOVE CONTENTION RAISED B Y THE REVENUE AT THIS STAGE. A PERUSAL OF THE ORDER OF THE ASSESSING OFFICER REVEALS THAT THE ASSESSING OFFICER HAS NOT DISPUTED THAT THE ASS ESSEES UNITS HAVE CARRIED OUT SUBSTANTIAL EXPANSION AS PROVIDED UNDER CLAUSE (B) OF SUB SECTION (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 STO VEKRAFT INDIA VS. 1596& 1597/CHD/2017 SHREE BALA JI ENTERPRISES & ZENITH INTERNATIONAL , HP 4 COMMISSIONER OF INCOME TAX (SUPRA) IN THE FOLLOWIN G CONCLUDING PARA OF THE ORDER:- 58. ON FACTS, WE MAY CLARIFY THAT THE REVENUE HAS NOT DISPUTED, (A) THE UNITS HAVING CARRIED OUT SUBSTANT IAL EXPANSION WITHIN THE DEFINITION OF THE SECTION, (B) THEIR ENTITLEMENT AND EXTENT OF DEDUCTION WOULD BE DEPEND ENT 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-EXAMINE UNDISPUTED FACTS. 7. IN VIEW OF THE ABOVE DISCUSSION, THE IMPUGNED OR DERS OF THE CIT(A) ARE SET ASIDE AND THE ASSESSING OFFICER IS D IRECTED TO GRANT TO THE ASSESSEES DEDUCTION AT THE RATE OF HUNDRED PER CENT OF ITS ELIGIBLE PROFITS, AS PER THE RULING OF THE JURISDICTIONAL H IGH COURT IN THIS REGARD IN THE CASE OF M/S STOVEKRAFT INDIA VS. COMMISSION ER OF INCOME TAX (SUPRA). 8. IN THE RESULT, THE APPEALS OF THE ASSESSEE, THER EFORE, STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT SD/- SD/- (ANNAPURNA GUPTA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 26.03.2018 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR 1596& 1597/CHD/2017 SHREE BALA JI ENTERPRISES & ZENITH INTERNATIONAL , HP 5