Shell Apparels Pvt Ltd , Bangalore V. Deputy Commissioner of Income TAx Circle-6(1)(1), Bangalore

ITA 2032/BANG/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5675 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2004-2005
• Appeal Filed On: 23-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR G MANOJ KUMAR
• Assessee Lawyers: S RAMASUBRAMANIAN
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-A BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO. 2032 / BANG/201 7 ASSESSMENT YEAR : 20 04 - 05 M/S. SHELL APPARELS PVT. LTD., NO. 10/14-10/16, G T INDUSTRIAL COMPLEX, MAGADI MAIN ROAD, SUNKADAKATTE, BANGALORE 560 091. PAN: AAHCS 2166B VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 6 (1) (1), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI S. RAMASUBRAMANIAN, CA RESPONDENT BY : DR. G. MANOJKUMAR, ADDL. CIT (DR) DATE OF HEARING : 08.01.2018 DATE OF PRONOUNCEMENT : 19 .0 1 .201 8 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE ASSESSEE AND THIS IS DI RECTED AGAINST THE ORDER OF LD. CIT(A)-6, BANGALORE DATED 14.07.2017 FOR ASSESSMENT YEAR 2004-05. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER. 1. THAT THE ORDER OF THE LEARNED COMMISSIONER OF IN COME TAX (APPEALS) IN SO FAR IT IS PREJUDICIAL TO THE INTERE ST OF THE APPELLANT, IS BAD AND ERRONEOUS IN LAW AND AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS) ERRED IN LAW AND ON FACTS IN CONFIRMING THE DISALLOWANCE OF DEDUCTION U/S 80IB TO THE EXTENT OF RS.5,03,414 AND COMPUTING THE TOTA L INCOME OF RS.15,92,490 AS AGAINST RETURNED INCOME OF RS.10,89 ,075. 3. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS) ERRED IN LAW AND ON FACTS IN NOT ALLOWING THE DEDUCTION U/S 80IB TO THE EXTENT OF RS.5,03,414. ITA NO.2032/BANG/2017 PAGE 2 OF 8 4. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS) ERRED IN LAW AND ON FACTS IN IN HOLDING THAT THE APPELLANT H AS BEEN FORMED BY TRANSFER OF PLANT AND MACHINERY PREVIOUSLY USED FOR ANY PURPOSE IN INDIA AND ALSO ERRED IN LAW AND ON FACTS INHOLDING THAT THE APPELLANT HAD VIOLATED CONDITIONS SPECIFIED IN 80 IB (2)(I) A ND (II) OF THE ACT. EACH OF THE ABOVE GROUNDS IS WITHOUT PREJUDICE TO O NE ANOTHER AND THE APPELLANT CRAVES LEAVE OF THE HONBLE INCOME TAX AP PELLATE TRIBUNAL, BANGALORE, TO ADD, DELETE OR AMEND OR OTHERWISE MOD IFY ONE OR MORE OF THE ABOVE GROUNDS EITHER BEFORE OR DURING THE HE ARING OF THIS APPEAL. 3. THIS APPEAL WAS FILED BY THE ASSESSEE AFTER A DE LAY OF 36 DAYS AND THE ASSESSEE HAS FILED AN APPLICATION SEEKING CONDONATI ON OF DELAY ALONG WITH AN AFFIDAVIT OF SHRI S. GOPALA KRISHNA, FINANCE MANAGE R OF THE ASSESSEE- COMPANY. IN THE CONDONATION APPLICATION, IT IS STA TED THAT MR. GOPALA KRISHNA, FINANCE MANAGER WAS LOOKING AFTER THE INCOME TAX MA TTERS OF THE ASSESSEE COMPANY AND HE WAS INDISPOSED AND WAS NOT ATTENDING THE OFFICE FROM 20.08.2017 TILL 10.09.2017 AND AFTER JOINING THE DU TY, MR. GOPALA KRISHNA WAS BUSY WITH CLEARING ALL THE ARREARS OF WORK AND ALSO IN IMPLEMENTATION OF NEW GST REGIME AND HENCE, THERE WAS A DELAY IN FILING T HE APPEAL BEFORE THE TRIBUNAL. WHEN HE REALIZED THIS LAPSE ON 10.10.201 7, THE APPEAL WAS FILED. CONSIDERING THESE FACTS, WE CONDONE THE DELAY IN FI LING THE APPEAL. 4. THE ONLY ISSUE INVOLVED IN THIS APPEAL IS REGARD ING ALLOWABILITY OF DEDUCTION U/S. 80IB OF IT ACT. WE FIND THAT AS PER THE ASSESSMENT ORDER, M/S. SHELL APPARELS WAS A PROPRIETARY CONCERN OF SMT. VASUDA (PRESENTLY DIRECTOR OF THE ASSESSEE- COMPANY). THE AO FURTHER NOTED THAT IT WAS STATED BEFORE HIM THAT IN ORDER TO MEET THE CONDITIONS OF THE BANKERS, THE PROPRIETARY CONCERN WAS CONVERTED INTO A PRIVATE LIMITED COMPANY UNDER THE NAME AND STYLE OF M/S. SHELL APPARELS PVT. LTD. AND THE ASSESSEE COMPANY TOOK OVER THE UNDERTA KING AS A GOING CONCERN. THE AO REFERRED TO THE PROVISIONS OF SECTION 80IB O F IT ACT AND MAINLY CLAUSES (I) AND (II) OF SUB-SECTION (2) OF SECTION 80IB AND NOTED THAT WHERE THE OLD MACHINERY AND PLANT THAT HAS BEEN TRANSFERRED / USE D IN THE BUSINESS, THEN THIS CONDITION IS DEEMED TO HAVE BEEN VIOLATED. THE AO HAS FOLLOWED THE JUDGEMENT OF HON'BLE KARNATAKA HIGH COURT RENDERED IN THE CASE OF CIT VS. ITA NO.2032/BANG/2017 PAGE 3 OF 8 NIPPON ELECTRONICS INDIA PVT. LTD. AS REPORTED IN 1 81 ITR 518 AND REJECTED THE CLAIM OF THE ASSESSEE FOR GRANTING DEDUCTION U/S. 8 0IB. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A) BUT WITHOUT SUCCESS. NOW THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 5. IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT THE JUDGMENT OF HON'BLE KARNATAKA HIGH COURT FOLLOWED BY THE AO HAVING BEEN RENDERED IN THE CASE OF CIT VS. NIPPON ELECTRONICS INDIA PVT. LTD. (SUPRA) IS NOT A PPLICABLE IN THE PRESENT CASE. HE PLACED RELIANCE ON A RECENT JUDGMENT OF HONBLE KERALA HIGH COURT RENDERED IN THE CASE OF KANAN DEVAN HILLS PLANTATIONS COMPAN Y P. LTD. VS. ACIT AS REPORTED IN 400 ITR 43 (KER). HE POINTED OUT THAT IN THE JUDGEMENT OF HONBLE KERALA HIGH COURT, HONBLE HIGH COURT HAS CONSIDERE D A CLARIFICATORY NOTE OF THE CENTRAL BOARD OF DIRECT TAXES DATED 13.12.1963 IN R ESPECT OF SECTION 84 OF THE IT ACT (SINCE REPEALED) AND AS PER THE SAME, IT WAS NOTED THAT THE BENEFIT OF SECTION 84 OF THE IT ACT, 1961 ATTACHES TO THE UNDE RTAKING AND NOT TO THE OWNER THEREOF. HE ALSO PLACED RELIANCE ON A JUDGMENT OF HONBLE ALLAHABAD HIGH COURT RENDERED IN THE CASE OF CIT VS. HAJI MOHD. AL I MOHD. ISHAQ AS REPORTED IN 295 ITR 109 (ALL) AND POINTED OUT THAT IN THIS CASE ALSO, HONBLE ALLAHABAD HIGH COURT HAS CONSIDERED THE SAME BOARD CIRCULAR DATED 13.12.1963 IN WHICH IT HAS BEEN CLARIFIED BY THE BOARD THAT THE BENEFIT OF SEC TION 84 ATTACHES TO THE UNDERTAKING AND NOT TO THE OWNER THEREOF. IT IS AL SO NOTED BY HONBLE ALLAHABAD HIGH COURT THAT SECTION 80J WAS INSERTED IN THE ACT IN THE PLACE OF OLD SECTION 84, WHICH WAS DELETED BY FINANCE (NO. 2) ACT, 1967. THE HONBLE ALLAHABAD HIGH COURT HAS NOTED THAT THE BOARD HAS CLARIFIED T HAT THE SUCCESSOR WILL BE ENTITLED TO THE BENEFIT FOR THE UNEXPIRED PERIOD OF FIVE YEARS, PROVIDED THE UNDERTAKING IS TAKEN OVER AS A RUNNING CONCERN. TH E HONBLE ALLAHABAD HIGH COURT ALSO NOTED THAT THERE IS NOT EVEN A TRANSFER OF OWNERSHIP OF THE UNDERTAKING, BUT THERE IS A MERE CHANGE OF THE CON STITUTION OF THE FIRM, WHICH APPARENTLY HAS BEEN ACCEPTED BY THE DEPARTMENT. HE SUBMITTED THAT THIS JUDGEMENT IS ALSO APPLICABLE IN THE PRESENT CASE AN D THEREFORE, THE CLAIM OF THE ASSESSEE SHOULD BE ALLOWED. THE LD. DR OF REVENUE S UPPORTED THE ORDERS OF AUTHORITIES BELOW. ITA NO.2032/BANG/2017 PAGE 4 OF 8 6. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. FIRST OF ALL, I REPRODUCE THE RELEVANT PARA FROM PAGE NO. 3 OF THE ASSESSMENT ORDER WHICH IS AS UNDER. ON PERUSAL OF RECORDS IT IS SEEN THAT M/S SHELL APP ARELS WAS A PROPRIETARY CONCERN OF SMT. VASUDA (PRESENTLY DIREC TOR OF THE COMPANY). IT IS STATED THAT IN ORDER TO MEET THE CO NDITION OF THE BANKERS, THE PROPRIETARY CONCERN WAS CONVERTED INTO A PRIVATE LIMITED COMPANY UNDER THE NAME AND STYLE OF M/S SHELL APPAR ELS PVT. LTD. THE ASSESSEE COMPANY TOOK OVER THE ABOVE UNDERTAKIN G AS A GOING CONCERN WHICH COULD NOT SATISFY THE CONDITIONS OF T HE LAID DOWN UNDER THE PROVISIONS OF THE SECTION80IB OF THE INCOME-TAX ACT. READING CLAUSES OF (I) AND (II) OF SUB-SECTION (2) OF SECTI ON 80IB IT WILL BE CLEAR THAT WHERE THE OLD MACHINERY AND PLANT THAT HAS BEE N TRANSFERRED/ USED IN THE BUSINESS, THEN THIS CONDITION IS DEEMED TO HAVE BEEN VIOLATED. BESIDES THIS, THAT THE UNDERTAKING MUST N OT HAVE FORMED BY TRANSFER TO THE NEW BUSINESS OF THE MACHINERY AND P LANT PREVIOUSLY USED FOR ANY PURPOSE . AS ALREADY STATED THAT THE U NDERTAKING WAS A PROPRIETARY CONCERN AND IN ORDER TO MEET THE CONDIT IONS OF THE BANKERS, IT WAS CONVERTED IN TO A PRIVATE LTD. COMP ANY. IN THE PROCESS, THE PROPRIETARY CONCERN HAS TRANSFERRED AL L ITS ASSETS & LIABILITIES AND PLANT & MACHINERY TO PRIVATE LIMITE D COMPANY, THEREBY VIOLATING THE REQUIREMENT OF SEC.80IB OF THE INCOME TAX ACT. THE ASSESSEE COMPANY RELYING ON THE BOARD'S LETTER IN F .NO.15/563/(A-I) DT. 13.12.1963, WHEREIN IT TOOK STAND THAT THE COMP ANY IS STILL ELIGIBLE TO CLAIM DEDUCTION U/S.80IB OF THE INCOME TAX ACT. IT MAY NOT BE OUT OF PLACE TO MENTION HERE THAT THE PROVISIONS OF SEC .80IB WERE INTRODUCED ONLY FROM 01.04.02 AND TWO OF THE CONDIT IONS ARE THAT IT SHOULD NOT HAVE BEEN FORMED BY SPLITTING UP OR RECO NSTRUCTION OF THE BUSINESS ALREADY IN EXISTENCE AND IT SHOULD NOT BE FORMED BY THE TRANSFER TO THE NEW BUSINESS OF MACHINERY OR PLANT PREVIOUSLY USED FOR ANY PURPOSE. WHEN THE ASSESSEE IS NOT IN A POSITION TO COMPLY THESE REQUIREMENTS, IT IS NOT ELIGIBLE TO CLAIM DEDUCTION U/S.80IB OF THE ACT. IN THE SIMILAR CIRCUMSTANCES, IT IS WORTH QUOTING T HE DECISION OF THE HONBLE HIGH COURT OF KARNATAKA IN THE CASE OF CIT VS. NIPPON ELECTRONICS INDIA PVT. LTD. 181 ITR 518, IT HAS HEL D: 7. FROM THE ABOVE PARA, IT IS SEEN THAT THE AO HAS FOLLOWED THE JUDGEMENT OF HON'BLE KARNATAKA HIGH COURT RENDERED IN THE CASE O F CIT VS. NIPPON ELECTRONICS INDIA PVT. LTD. (SUPRA). IN THAT CASE, THE FACTS WERE THAT IN THE INITIAL YEAR IN WHICH SECTION 80J WAS CLAIMED, IT IS NOTED BY THE AO THAT RELIEF U/S. 80J IS NOT ALLOWABLE BECAUSE THE VALUE OF THE OLD MACHI NERY OR PLANT THAT HAS BEEN TRANSFERRED EXCEEDED THE LIMIT OF 20% AS STIPULATED IN 80J(4)(2)(II) OF THE IT ACT. IN THE PRESENT CASE, THE DISPUTE IS NOT REGARDING T HE INITIAL YEAR BECAUSE THIS IS NOT IN DISPUTE THAT THE UNDERTAKING WAS IN EXISTENC E PRIOR TO THE PRESENT YEAR IN THE FORM OF PROPRIETARY CONCERN WHICH WAS CONVERTED INTO PRIVATE LIMITED ITA NO.2032/BANG/2017 PAGE 5 OF 8 COMPANY IN THE PRESENT YEAR. IN THE FACTS OF THE P RESENT CASE, THIS JUDGEMENT IS NOT APPLICABLE BECAUSE IN THE PRESENT CASE, AN U NDERTAKING BEING SOLE PROPRIETARY CONCERN OF SMT. VASUDA HAS BEEN CONVERT ED INTO PRIVATE LIMITED COMPANY AND THIS IS NOT THE CASE OF THE AO THAT THE SAID UNDERTAKING WAS NOT ELIGIBLE FOR DEDUCTION U/S 80IB IN THE INITIAL YEAR . 8. NOW, I EXAMINE THE APPLICABILITY OF THE PROVISIO NS OF CLAUSES (I) & (II) OF SUB SECTION (2) OF SECTION 80IB BECAUSE THE AO HAS ALLE GED THAT THESE CLAUSES ARE VIOLATED. I REPRODUCE THESE PROVISIONS FOR READY RE FERENCE:- '(2) THIS SECTION APPLIES TO ANY INDUSTRIAL UNDERTA KING WHICH FULFILS ALL THE FOLLOWING CONDITIONS, NAMELY: (I) IT IS NOT FORMED BY SPLITTING UP, OR THE RECONS TRUCTION, OF A BUSINESS ALREADY IN EXISTENCE: PROVIDED THAT THIS CONDITION SHALL NOT APPLY IN RES PECT OF AN INDUSTRIAL UNDERTAKING WHICH IS FORMED AS A RESULT OF THE RE-ESTABLISHMENT, RECONSTRUCTION OR REVIVAL BY THE ASSESSEE OF THE BUSINESS OF ANY SUCH INDUSTRIAL UNDERTAKING AS IS REFERRED TO IN SECTION 33B, IN THE CIRCUMSTANCES AN D WITHIN THE PERIOD SPECIFIED IN THAT SECTION; (II) IT IS NOT FORMED BY THE TRANSFER TO A NEW BUSI NESS OF MACHINERY OR PLANT PREVIOUSLY USED FOR ANY PURPOSE; ' 9. FROM THE ABOVE PROVISIONS, IT IS SEEN THAT THE C ONDITIONS APPLICABLE ARE TO BE EXAMINED WITH REFERENCE TO THE INDUSTRIAL UNDERTAKI NG AND NOT WITH REFERENCE TO THE ASSESSEE AND THESE HAVE TO BE EXAMINED IN TH E YEAR OF FORMATION OF THE INDUSTRIAL UNDERTAKING. EVEN AS PER THE AO, AS PER THE RELEVANT PARA OF THE ASSESSMENT ORDER REPRODUCED ABOVE, THE ASSESSEE COMPANY TOOK OVER THE RELEVANT INDUSTRIAL UNDERTAKING AS A GOING CONC ERN. THIS IS NOT THE CASE OF THE AO THAT THE INDUSTRIAL UNDERTAKING SO ACQUIR ED BY THE ASSESSEE WAS NOT ELIGIBLE FOR DEDUCTION U/S 80IB IN THE INITIAL YEAR OR IN ANY YEAR PRIOR TO SUCH TAKE OVER BY THE PRESENT ASSESSEE ON CONVERSIO N OF THE PROPRIETARY CONCERN INTO A COMPANY. THE OBJECTION OF THE AO IS THIS MUCH ONLY THAT ON CONVERSION OF THE PROPRIETARY CONCERN INTO A COMPAN Y, THE SAID PROPRIETARY CONCERN HAS TRANSFERRED ALL ITS ASSETS AND LIABILIT IES INCLUDING PLANT & MACHINERIES TO THE PRIVATE LIMITED COMPANY. IN FACT , THE UNDERTAKING ITSELF ITA NO.2032/BANG/2017 PAGE 6 OF 8 WAS TAKEN OVER AS A GOING CONCERN AND NOT THE INDIV IDUAL ASSETS. IN THE CASE OF CIT VS. HAJI MOHD. ALI MOHD. ISHAQ (SUPRA) ALSO, THE FIRM WAS RECONSTITUTED AND THE DISPUTE WAS THIS AS TO WHETHE R THE RECONSTITUTED FIRM WAS ELIGIBLE FOR THE BENEFITS OF SECTION 80J AND IT WAS HELD THAT THE RECONSTITUTED FIRM WAS ENTITLED FOR THE UNEXPIRED P ERIOD OF FIVE YEARS, PROVIDED THE UNDERTAKING IS TAKEN OVER AS A RUNNING CONCERN. HON'BLE ALLAHABAD HIGH COURT ALSO HELD THAT THERE IS NOT EVEN A TRANSFER O F THE UNDERTAKING BUT THERE IS MERE CHANGE OF THE CONSTITUTION OF THE FIRM IN THAT CASE. IN THE PRESENT CASE ALSO, THERE IS MERE CONVERSION OF A PROPRIETARY CON CERN INTO A PRIVATE LIMITED COMPANY. AT THE BEST, IT CAN BE SAID THAT IN THE PR ESENT CASE, THERE IS A TRANSFER OF THE UNDERTAKING BUT DEFINITELY, IT IS NOT A CASE OF TRANSFER OF THE ASSETS INCLUDING PLANT & MACHINERY. IN MY CONSIDERED OPINI ON, THIS JUDGMENT OF HON'BLE ALLAHABAD HIGH COURT IS APPLICABLE AND RESPECTFULLY FOLLOWING THE SAME, I HOLD THAT THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S 80 IB IS TO BE ALLOWED AS PER LAW AND THE PROVISIONS OF CLAUSES (I) & (II) OF SECTION 80 IB (2) ARE NOT VIOLATED IN THE FACTS OF THE PRESENT CASE. 10. REGARDING THE JUDGMENT OF HON'BLE KARNATAKA HIG H COURT FOLLOWED BY THE AO HAVING BEEN RENDERED IN THE CASE OF CIT VS. NIPPON ELECTRONICS INDIA PVT. LTD. (SUPRA), I FIND THAT THIS JUDGMENT IS NOT RENDERING ANY HELP TO THE REVENUE IN THE FACTS OF THE PRESENT CASE. IN THAT CASE, THE DISPUT E BEFORE HON'BLE KARNATAKA HIGH COURT WAS THIS THAT IF THE REQUIRED CONDITIONS OF ELIGIBILITY FOR DEDUCTION U/S 80J WERE NOT SATISFIED IN THE INITIAL YEAR I.E. THE FIRST YEAR WHEN THE INDUSTRIAL UNDERTAKING BEGINS THE MANUFACTURE, WHETHER SUCH DE DUCTION CAN BE ALLOWED IN A SUBSEQUENT YEAR IF THE REQUIRED CONDITIONS ARE FU LFILLED IN THAT SUBSEQUENT YEAR. IN THAT CASE, IN THE INITIAL YEAR, I.E. A.Y. 1971 72, THE ASSESSEE WAS NOT ENTITLED TO RELIEF U/S 80J BECAUSE IN THAT YEAR, THE OLD ASS ETS EXCEEDED 20 PERCENT OF TOTAL ASSETS BUT IN A. Y. 1973 74, IT WAS BROUGHT DOWN BELOW 20% BY MAKING NEW INVESTMENT IN A. Y. 1973 74 BUT IT WAS HELD T HAT THE ELIGIBILITY HAS TO BE SEEN IN THE INITIAL YEAR AND IF THE ASSESSEE IS NOT ELIGIBLE IN THE INITIAL YEAR, THE QUESTION OF GRANTING EXEMPTION IN A SUBSEQUENT YEAR DOES NOT ARISE. IN THE PRESENT CASE, THIS IS NOT THE CASE OF THE AO THAT I N THE INITIAL YEAR IN WHICH THE INDUSTRIAL UNDERTAKING BEGAN THE MANUFACTURE, IT WA S NOT ELIGIBLE FOR DEDUCTION ITA NO.2032/BANG/2017 PAGE 7 OF 8 U/S 80 IB . ONCE IT IS ACCEPTED THAT THE INDUSTRIAL UNDERTAKING IS ELIGIBLE FOR DEDUCTION U/S 80IB IN THE INITIAL YEAR, THE ELIGIBI LITY IN A SUBSEQUENT YEAR BEING PART OF UNEXPIRED PERIOD OF SPECIFIED NO. OF YEARS CANNOT BE DISPUTED OR DOUBTED AND DEDUCTION HAS TO BE ALLOWED DURING UNEXPIRED PE RIOD OF ELIGIBLE NO. OF YEARS AT THE SPECIFIED PERCENTAGE. IN FACT, THIS JUDGMENT ALSO HELPS THE ASSESSEE IN THE FACTS OF THE PRESENT CASE. HENCE, I HOLD THAT AS PE R THIS JUDGMENT OF HON'BLE KARNATAKA HIGH COURT RENDERED IN THE CASE OF CIT VS . NIPPON ELECTRONICS INDIA PVT. LTD. (SUPRA) ALSO, THE ASSESSEE IS ELIGIBLE FO R THE DEDUCTION U/S 80IB BECAUSE THIS IS NOT THE CASE OF AO THAT THE UNDERTA KING IN QUESTION WAS NOT ELIGIBLE FOR DEDUCTION U/S 80 IB IN THE INITIAL YEAR. REGARDING TWO OTHER ASPECTS I.E. THAT THE PRESENT YEAR IS A PART OF UNEXPIRED P ERIOD OF SPECIFIED NO. OF YEARS OR NOT AND WHETHER THE CLAIM OF THE ASSESSEE IS AT AN ELIGIBLE PERCENTAGE AS PER THE SECTION, NECESSARY FACTS ARE NOT AVAILABLE ON R ECORD AND THERE IS NO FINDING OF THE LOWER AUTHORITIES ON THESE TWO ASPECTS. HENC E, I RESTORE THE MATTER TO THE AO WITH THE DIRECTION THAT THE ASSESSEE SHOULD BE A LLOWED DEDUCTION U/S 80IB IF THE PRESENT YEAR IS A PART OF UNEXPIRED PERIOD OF S PECIFIED NO. OF YEARS AFTER THE INITIAL YEAR AT THE ELIGIBLE PERCENTAGE I.E. 100% O R 25/30% AS ALLOWABLE AS PER LAW AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING H EARD TO THE ASSESSEE. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSES IN THE TERMS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- (ARUN KUMAR GARODIA) ACCOUNTANT MEMBER BANGALORE, DATED, THE 19 TH JANUARY, 2018. /MS/ ITA NO.2032/BANG/2017 PAGE 8 OF 8 COPY TO: 1. APP ELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.