Indian Herbs Specialities, Saharanpur V. DCIT, Chandigarh

ITA 197/CHANDI/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5074 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2013-2014
• Appeal Filed On: 30-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GULSHAN RAJ
• 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 NOS. 196 & 197/CHD/2017 ASSESSMENT YEARS: 2012-13 & 2013-14 INDIAN HERBS SPECIALITIES VS. THE DCIT, CIRCLE 4( 1), (NOW INDIAN HERBS SPECIALITIES CHANDIGARH PVT LTD) BRANCH OFFICE SHARDA NAGAR, SAHARANPUR-247001 (U.P.) PAN NO. AABFI6971R (APPELLANT) (RESPONDENT) APPELLANT BY : SH. SANJAY GUPTA, CA RESPONDENT BY : SH. GULSHAN RAJ, CIT DR DATE OF HEARING : 27.03.2018 DATE OF PRONOUNCEMENT: 27.03.2018 ORDER PER BENCH: THE ABOVE CAPTIONED APPEALS RELATING TO THE DIFFERE NT ASSESSMENT YEARS HAVE BEEN PREFERRED BY THE ASSESSEE AGAINST T HE SEPARATE ORDERS OF COMMISSIONER OF INCOME TAX (APPEALS), [HEREINAFT ER REFERRED TO AS CIT(A)]-2, CHANDIGARH DATED 10.11.2016. 2. SINCE THE ISSUES RAISED IN BOTH THE APPEALS ARE IDENTICAL, THESE WERE HEARD TOGETHER AND ARE BEING DECIDED BY THIS COMMON ORDER. 3. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE SUBM ITTED THAT HE WANTS TO WITHDRAW GROUND NOS. 1.1 & 2.1 IN BOTH THE APPEALS AND TO THIS EFFECT HE ITA NOS. 196 & 197/CHD/2017 INDIAN HERBS SPECIALTIES, SAHARANPUR 2 HAS MADE HIS REMARKS AS GROUNDS WITHDRAWN AGAINST THE SAID GROUNDS ITSELF. THE LD. DR HAS NO OBJECTION FOR THE SAID W ITHDRAWAL. 4. IN VIEW OF THE ABOVE, GROUNDS NOS. 1.1 AND 2 .1 IN BOTH THE APPEALS ARE HEREBY DISMISSED AS WITHDRAWN 5. THE SOLE ISSUE RAISED VIDE GROUND NOS. 2.2, 3.1 AND 3.2 IN BOTH THE APPEALS RELATE TO THE ACTION OF THE CIT(A) IN DISA LLOWING THE CLAIM OF DEDUCTION @ 100% US 80IC OF THE INCOME-TAX ACT, 196 1 (IN SHORT 'THE ACT') ON ACCOUNT OF SUBSTANTIAL EXPANSION OF THE UN IT. 6. 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 ITA NOS. 196 & 197/CHD/2017 INDIAN HERBS SPECIALTIES, SAHARANPUR 3 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 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)]. 7. 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 OFFICERS FOR VERIFICATION AS TO WHETHER T HE ASSESSEE HAS ACTUALLY CARRIED OUT THE SUBSTANTIAL EXPANSION TO B E ENTITLED TO CLAIM DEDUCTION U/S 80IC OF THE ACT. 8. WE DO NOT AGREE TO THE ABOVE CONTENTION RAISED B Y THE REVENUE AT THIS STAGE. A PERUSAL OF THE ORDERS OF THE ASSESSIN G OFFICERS REVEAL THAT THE ASSESSING OFFICERS HAVE NOT DISPUTED THAT THE A SSESSEE UNIT HAS 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 B Y THE HON'BLE ITA NOS. 196 & 197/CHD/2017 INDIAN HERBS SPECIALTIES, SAHARANPUR 4 HIMACHAL PRADESH HIGH COURT IN THE CASE OF M/S STO VEKRAFT INDIA VS. 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 OFFICERS A SECOND INNINGS TO RE-EXAMINE UNDISPUTED FACTS. 9. IN VIEW OF THE ABOVE DISCUSSION, THE IMPUGNED OR DERS OF THE CIT(A) ARE SET ASIDE AND THE ASSESSING OFFICERS ARE DIRECTED TO GRANT TO THE ASSESSEE DEDUCTION AT THE RATE OF HUNDRED PERC ENT 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). 10. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSE E, THEREFORE, STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT SD/- SD/- (ANNAPURNA GUPTA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 27.03.2018 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR