M/s Aarham Softronics, Solan V. ITO, Baddi

ITA 1641/CHANDI/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5167 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 04-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: L P SANDHU
• Section: 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCHB, CHANDIGARH BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND SHRI B.R.R. KUMAR, ACCOUNTANT MEMBER ITA NO.1641/CHD/2017 ASSESSMENT YEAR: 2014-15 M/S AARHAM SOFTRONICS VS. THE ITO PLOT NO. 30, INDL. AREA BADDI SOLAN, BADDI PAN NO. AALFA1356L & ITA NO.1681/CHD/2017 ASSESSMENT YEAR: 2013-14 M/S AARHAM SOFTRONICS VS. THE ITO PLOT NO. 30, INDL. AREA BADDI SOLAN, BADDI (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. VINEET KRISHAN REVENUE BY : MS. L.P SANDHU DATE OF HEARING : 20/03/2018 DATE OF PRONOUNCEMENT : 22/03/2018 ORDER PER BENCH. BOTH THE ABOVE APPEALS HAVE BEEN FILED BY THE ASSES SEE AGAINST THE SEPARATE ORDER OF THE LD. CIT(A), SHIMLA DT. 27/09/ 2017 AND 23/10/2017 RESPECTIVELY. 2. SINCE THE ISSUES HAVE BEEN RAISED IN BOTH THE AB OVE APPEALS ARE SIMILAR THEREFORE THEY ARE BEING DISPOSED OFF BY A CONSOLID ATE ORDER FOR THE SAKE OF CONVENIENCE. 3. WE SHALL TAKE ITA NO. 1641/CHD/2017 AS A LEAD CA SE IN WHICH ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1. THAT THE ORDER PASSED UNDER SECTION 250(6) BY THE L EARNED COMMISSIONER OF INCOME TAX (APPEALS), SHIMLA (HP) IN APPEAL NO. IT/ 160/16-17/SML DATED 27.09.2017 IS CONTRARY TO LAW AND FACTS OF THE CASE . 2 2. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE ID. COMMISSIONER OF INCOME TAX (APPEALS) GRAVELLY ERRED IN UPHOLDING THE ACTION OF THE ID. ASSESSING OFFICER WHO HAD RESTRICTED THE CL AIM OF DEDUCTION UNDER SECTION 80IC TO 25% OF THE PROFITS AND GAINS OF THE ELIGIBL E BUSINESS INSTEAD OF 100% OF SUCH PROFITS CLAIMED BY APPELLANT, WHICH LED TO ADDITION OF RS.530243/- 3. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE ID. COMMISSIONER OF INCOME TAX (APPEALS) GRAVELLY ERRED IN UPHOLDING THE STAND OF THE ID. ASSESSING OFFICER WHO HAD ERRED IN MISINTER PRETING THE PROVISIONS OF SECTION 80IC AND IN HOLDING THAT THE BENEFIT OF 100% DEDUCT ION UNDER SECTION 80IC OF THE ACT FOR FIRST FIVE YEARS IN CASE OF SUBSTANTIAL EXP ANSION IS AVAILABLE ONLY TO THE UNITS THAT EXISTED AND WHERE OPERATIONAL AS ON 07.01.2003 AND SUCH BENEFIT IS NOT AT ALL MEANT FOR THE UNITS THAT CAME INTO BEING ON OR AFTE R THE INTRODUCTION OF THE SCHEME OF SUCH DEDUCTION. 4.THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE T HE LD CIT (A) GRAVELY ERRED IN UPHOLDING THAT ONCE AN 'INITIAL ASSESSMENT YEAR' IS DETERMINED IN CASE OF AN UNDERTAKING CLAIMING BENEFIT U/S 80IC OF THE ACT, I T CANNOT BE CHANGED EVEN IF SUCH UNDERTAKING COMPLETES SUBSTANTIAL EXPANSION AN D AGAIN QUALIFIES FOR DEDUCTION UNDER THE SAID SECTION ON THE BASIS OF 'Q UALIFYING EXPANSION'. 4. THE SOLE ISSUE RAISED IN THIS APPEAL RELATES TO THE ACTION OF THE CIT(A) IN DISALLOWING THE CLAIM OF DEDUCTION @ 100% US 80IC O F THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') ON ACCOUNT OF SUBSTANTIAL EXPA NSION OF THE UNIT. 5. DURING THE COURSE OF HEARING BEFORE US, IT WAS B ROUGHT TO OUR NOTICE THAT THE ISSUE INVOLVED IN THIS APPEAL HAS ALREADY BEEN ADJUDICATED BY THE HONBLE HIMACHAL PRADESH HIGH COURT VIDE THEIR ORDER DT. 28 NOVEMBER 2017 IN THE GROUP OF CASES WITH THE LEAD CASE TITLED AS M/S STOVEKRAF T INDIA VS. COMMISSIONER OF INCOME TAX, ITA NO.20 OF 2015, AND IT WAS POINTED OUT THAT THE HONBLE HIGH COURT HAD DECIDED THE ISSUE IN FAVOUR OF THE ASSESS EE, HOLDING THAT THERE IS NO BAR IN THE SAID SECTION DENYING THE BENEFIT OF HU NDRED PERCENT DEDUCTION TO NEW UNITS UNDERTAKING SUBSTANTIAL EXPANSION. OUR AT TENTION WAS DRAWN TO THE 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 A PPEALS 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 ASSESSES, ARE QUASHED AND SET ASIDE, HOLDING AS UNDER: (A) SUCH OF THOSE UNDERTAKINGS OR ENTERPRISES WHIC H WERE ESTABLISHED, BECAME OPERATIONAL AND FUNCTIONAL PRIOR TO 7.1.2003 AND HA VE UNDERTAKEN SUBSTANTIAL 3 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 WERE NOT ENTITLED TO THE BENEFIT OF DEDUCTION UNDER SECTION 80-IB. (B) SUCH OF THOSE UNITS WHICH HAVE COMMENCED PRODU CTION AFTER 7.1.2003 AND CARRIED OUT SUBSTANTIAL EXPANSION PRIOR TO 1.4.2012 , 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 EXPANSION. AS LONG AS REQUIREMENT OF SECTION 80-IC(8)(IX) IS MET, THERE C AN BE NUMBER OF MULTIPLE SUBSTANTIAL EXPANSIONS. (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 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 SH ALL 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)]. 6. LD. DR FAIRLY ADMITTED THAT THE ISSUE IS SQUAREL Y COVERED BY THE ABOVE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT. 7. IN VIEW OF THE ABOVE DISCUSSION, THE IMPUGNED OR DER OF THE CIT(A) IS SET ASIDE AND THE AO IS DIRECTED TO GRANT TO THE ASSESS EES DEDUCTION AS PER THE RULING OF THE JURISDICTIONAL HIGH COURT IN THIS REG ARD IN THE CASE OF M/S STOVEKRAFT INDIA VS. COMMISSIONER OF INCOME TAX (SUPRA) AFTER DUE EXAMINATION. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE, THERE FORE, STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (DIVA SINGH) (B.R.R.KUM AR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 22/03/2018 AG COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR