M/s Tirupati LPG Industries Ltd., New Delhi V. DCIT, Dehradun

ITA 2786/DEL/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 6858 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 03-02-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 07-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V R SONBHADRA
• Assessee Lawyers: AMIT GOEL
• Keywords: Business income; Depreciation
• Section: 143(3)

Judgement Text

ITA NO.2786/DEL/2013 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER I.T.A.NO. 2786 /DEL/201 3 A.Y. : 20 10 - 11 M/S TIRUPATI LPG INDUSTRIES LTD., D-14, 2 ND FLOOR, PREET VIHAR, DELHI (PAN:AABCT2368J) VS. JOINT COMMISSIONER OF INCOME TAX, RANGE-2, 13-A, SUBHASH ROAD, DEHRADUN (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. AMIT GOEL, CA DEPARTMENT BY : SH. V.R. SONBHADRA, SR. DR DATE OF HEARING : 03-02-2016 DATE OF ORDER : 10-02-2016 ORDER PER H.S. SIDHU : JM THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE IMPUGNED ORDER DATED 22.2.2013 PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-I, NEW DELHI ON THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND CIRCUMSTANCES OF CASE AND IN L AW, THE COMMISSIONER OF INCOME TAX (APPEAL) ERRED IN CONFIR MING THE ACTION OF ASSESSING OFFICER OF ALLOWING DEDUCTION U /S 80LC OF INCOME TAX ACT, 1961 @ 30% INSTEAD OF 100% AS CLAIMED BY T HE ASSESSEE COMPANY. 2. ON THE FACTS AND CIRCUMSTANCES OF CASE AND IN L AW, THE COMMISSIONER OF INCOME TAX (APPEAL) ERRED IN CONFIR MING THE ACTION OF ASSESSING OFFICER OF ALLOWING DEDUCTION U /S 80LC OF RS. 2,67,33,841/- INSTEAD OF RS.9,26,57,160/- AS CL AIMED BY THE ASSESSEE. ITA NO.2786/DEL/2013 2 3. ON THE FACTS AND CIRCUMSTANCES OF CASE AND IN L AW, THE ASSESSEE COMPANY WAS ENTITLED TO DEDUCTION U/S 80LC OF INCOM E TAX ACT, 1961 @ 100% OF PROFIT DERIVED FROM THE INDUSTRIAL U NDERTAKING AND THE CIT(A) AND THE ASSESSING OFFICER HAS ERRED IN R ESTRICTING THE DEDUCTION TO 30%. THE ALLEGED REASONS GIVING BY THE A.O. AND CIT(A) FOR RESTRICTING THE DEDUCTION TO 30% ARE ERR ONEOUS. 4. ON THE FACTS AND CIRCUMSTANCES OF CASE AND IN L AW, THE COMMISSIONER OF INCOME TAX (APPEAL) ERRED IN CONFIR MING THE ACTION OF ASSESSING OFFICER OF NOT ALLOWING DEDUCTI ON U/S 80LC ON INTEREST INCOME OF RS.35,44,359/-. 5. ON THE FACTS AND CIRCUMSTANCES OF CASE AND IN LAW, THE COMMISSIONER OF INCOME TAX (APPEAL) ERRED IN CONFIR MING THE ACTION OF ASSESSING OFFICER OF TREATING THE INTERES T INCOME OF RS.35,44,359/- AS INCOME FROM OTHER SOURCES INSTEAD OF BUSINESS INCOME. 6. THE APPELLANT CRAVES LEAVE TO ADD ONE OR MORE G ROUND OF APPEAL OR TO ALTER / MODIFY THE EXISTING GROUND BEFORE OR AT THE TIME OF HEARING OF APPEAL. 2. FACTS OF THE CASE AS NARRATED FROM PARAS 2.1 TO 2.6 OF ASSESSING OFFICERS ORDER IS EXTRACTED HEREUNDER FOR READY REFERENCE. 2.1 THE ASSESSEE IS A LIMITED COMPANY INCORPORATED IN THE YEAR 2000. ITS REGISTERED OFFICE IS AT D-14, IIND FLOOR, PREET VIHAR, DELHI. IT HAS THREE DIRECTORS, SHRI GC GOYAL AAFPG 5331 F, SHRI A RUN GOYAL AAIPG 7139 G AND SHRI ANKIT GARG AFYPG8199R. 2.2 THE COMPANY IS ENGAGED IN MANUFACTURING AND S ELLING OF NEW LPG CYLINDERS AND CONDUCTOR WIRES. THE ASSESSEE COMPANY MANUFACTURES DOMESTIC LPG CYLINDERS FOR VARIOUS GOVERNMENT OIL C OMPANIES. 2.3 DURING THE INSTANT YEAR, THE ASSESSEE HAS CLAI MED DEDUCTION U/S 80 IC AMOUNTING TO RS.9,26,57,160/-. 2.4 THE MANUFACTURING UNIT OF THE COMPANY IS LOCATE D AT KHASRA NO. 235,237,238/1 AND 238/2, INDUSTRIAL AREA, SELAQUI, DEHRADUN. THIS ITA NO.2786/DEL/2013 3 UNIT COMPLETED SUBSTANTIAL EXPANSION DURING THE ASS ESSMENT YEAR 2004-05 AND CLAIMED DEDUCTION U/S 80 IC FROM THE AS SESSMENT YEAR 2004-05 BY DECLARING IT TO BE ITS INITIAL ASSE SSMENT YEAR FOR THE CLAIM OF DEDUCTION. 2.5 CLAIM OF DEDUCTION U/S 80 IC WAS ALLOWED BY THE ASSESSING OFFICER FOR THE ASSESSMENT YEAR 2004-05. THE CLAIM HAS BEEN ALLOWED U/S 143(3) FOR THE ASSESSMENT YEARS 2004-05 TO 2008-09 @ 100% AND FOR THE AY 2009-10 @30% . 2.6 INSTANT ASSESSMENT YEAR IS THE SEVENTH ASSESSM ENT YEAR OF CLAIMING DEDUCTION U/S 80 IC OF THE ACT. THE ASSESS EE HAS CLAIMED DEDUCTION @ 100% OF THE PROFITS IN THE SIXTH ASSESS MENT YEAR WHILE IT WAS ELIGIBLE FOR DEDUCTION @ 30% OF ITS PROFIT D URING THE INSTANT YEAR. 3. THE A.O. IN HIS ORDER U/S 143(3) REJECTED THE C LAIM OF THE ASSESSEE AFTER ANALYZING THE PROVISION OF S.80-IC AND THE GOVERNME NT POLICY FOR THE STATE OF UTTARANCHAL AND THE STATE OF HIMACHAL PRADESH. THE ASSESSING OFFICER HELD AS FOLLOWS. 3.8. NOW THE INSTANT CASE IS BEING EXAMINED IN THE LIGHT OF DISCUSSION ABOVE. THE ASSESSEE FALLS IN THE SECOND CATEGORY I. E. AN ALREADY EXISTING UNIT ON THE CUTOFF DATE THAT COMPLETED SUBSTANTIAL EXPANSION DURING THE ASSESSMENT YEAR 2004-05. THE ASSESSEE CLAIMED ASSES SMENT YEAR 2004- 05 TO BE ITS INITIAL ASSESSMENT YEAR FOR CLAIMING D EDUCTION, MEANING THEREBY, THAT THE SUBSTANTIAL EXPANSION WAS COMPLET ED DURING FY 2003-04 RELEVANT TO THE ASSESSMENT YEAR 2004-05. BY VIRTUE OF COMPLETING SUBSTANTIAL EXPANSION DURING THE ASSESSMENT YEAR 20 04-05 AND FULFILLING OTHER CONDITIONS MENTIONED IN THE SECTION, THE ASSE SSEE BECAME ELIGIBLE FOR CLAIMING DEDUCTION U/S 80 IC FOR A PERIOD OF TE N YEARS, @ 100% FOR FIRST FIVE YEARS AND @ 30 YEARS FOR THE BALANCE FIV E YEARS. 3.9. THE SUBMISSION OF THE LD.COUNSEL REGARDING THE ASSESSEE FULFILLING ALL THE CONDITIONS CLAIMING DEDUCTION AND THE CLAIM HAV ING BEEN ALLOWED BY THE DEPARTMENT SINCE ASSESSMENT YEAR 2004-05 IS WEL L TAKEN. EVEN DURING THE INSTANT YEAR, THE CLAIM IS NOT QUESTIONED FOR N ON-FULFILLMENT OF ITA NO.2786/DEL/2013 4 STATUTORY CONDITIONS. WHAT IS BEING QUESTIONED IS T HE CLAIM @ 100% OF PROFITS FOR THE SEVENTH ASSESSMENT YEAR. 3.10. THE ASSESSEE IS CLAIMING THAT SUBSTANTIAL EXP ANSION HAS BEEN COMPLETED AGAIN DURING THE A.Y. 2009-10 RESULTING IN INCREASE OF INSTALLED CAPACITY OF THE UNIT. SINCE THE SUBSTANTIAL EXPANSI ON IS COMPLETED AGAIN THEREFORE, THE INITIAL ASSESSMENT YEAR IS BEING REF IXED AT ASSESSMENT YEAR 2009-10. THIS ACTION OF THE ASSESSEE, CLAIMING THAT SUBSTANTIAL EXPANSION CAN BE UNDERTAKEN TWICE AND INITIAL ASSESSMENT YEAR CAN BE REFIXED AGAIN DURING THE PERIOD OF TEN YEARS IS NEITHER IN CONFOR MITY WITH THE LETTER NOR WITH THE SPIRIT OF THE LEGISLATURE. 3.11. FOR THE AY 2009-10 WHICH WAS SIXTH YEAR FOR T HE CLAIM OF DEDUCTION U/S. 80IC, THE AO AFTER DETAILED DISCUSSIONS VIDE A SSESSMENT ORDER DATED 19.12.2011 REJECTED THE ASSESSEES CLAIM OF DEDUCTI ON @100% IN THE SIXTH YEAR ON THE BASIS OF SUBSTANTIAL EXPANSION. AGGRIEV ED WITH THIS ORDER THE ASSESSEE FILED APPEAL BEFORE CIT(A), DEHRADUN WHO REJECTED THE THE PLEA AND UPHELD THE DECISION OF THE AO. THE RELEVANT POR TION OF CIT(A) ORDER IS REPRODUCED AS UNDER:- 'AS NOTED ABOVE, THE PROVISION APPLIES TO AN UNDERT AKING OR ALL ENTERPRISE EXISTING AS ON 07.01.2003 AND ACHIEV ING SUBSTANTIAL EXPANSION DURING THE PREVIOUS YEAR WHIC H IS RECKONED AS TIRE INITIAL ASSESSMENT YEAR AND DEDUCT ION IS TO BE ALLOWED FOR 10 YEARS BEGINNING FROM THE SAID ASS ESSMENT YEAR. IF THE ASSESSEE'S CONTENTION WERE ACCEPTED, I T WOULD AMOUNT TO RE-WRITING THE PROVISION OF LAW SO AS TO ALLOW TIRE DEDUCTION TO AN UNDERTAKING EXISTING AS ON 01.04.2 009 AND ACHIEVING SUBSTANTIAL EXPANSION DURING TIRE PREVIOU S YEAR. CLEARLY. IF TIRE ASSESSEE'S EXISTENCE AS ON 07.01.2 003 IS KEPT IN MIND, LITE INITIAL ASSESSMENT YEAR WOULD BE AY 2 004-05 (WHEN IT ACHIEVED SUBSTANTIAL EXPANSION). SINCE THE LAW PROVIDES FOR ONLY ONE 'INITIAL ASSESSMENT YEAR' AND A SINGLE STREAM OF DEDUCTION FOR 10 ASSESSMENT YEARS WITH RE FERENCE TO THE FORMER, THERE IS NO SCOPE FOR HAVING A SECON D INITIAL ASSESSMENT YEAR FOR IT. IF THAT WERE ALLOWED, IT WO ULD AMOUNT ITA NO.2786/DEL/2013 5 TO EVER GREENING OF THE INCENTIVE PROVISION. LOOKED EITHER WAY, THERE IS NO SCOPE FOR ALLOWING DEDUCTION @ 100 % AFTER THE END OF THE FIVE ASSESSMENT YEARS FROM THE INITI AL ASSESSMENT YEAR. THE SUBSTANTIAL EXPANSION UNDERTAK EN BY THE ASSESSEE DURING THE PREVIOUS YEAR UNDER CONSIDE RATION IS IMMATERIAL AS FAR AS DEDUCTION U/S 80-IC IS CONCERN ED. LAW HAS RECOGNIZED ONLY ONE 'INITIAL ASSESSMENT YEAR' F OR AN UNDERTAKING/ENTERPRISE. TIRE ASSESSEE'S ATTEMPT AMO UNTS TO ABUSE OFTHE INCENTIVE PROVISION. THE ASSESSEE, IN SUPPORT OF ITS CLAIM, LIAS RELIED ON TIRE DECISION OF TIRE HON, ITAT IN THE CASE OF S.R. PARY AVAN ENGINEERS (P) LTD. V. DEPARTMENT OF INCOME TAX (ITA NO. 340/CHD/2010), DT, 39.08.2010. IN THAT CASE, TIRE A SSESSEE WAS ENTITLED TO DEDUCTION U/S 80-IC ON SUBSTANTIAL EXPANSION BUT HAD, BY MISTAKE, CLAIMED THE SAME U/S 80-IB. TH E DEDUCTION WAS NOT ALLOWED BY THE AO SINCE TIRE LATT ER DEDUCTION IS NOT ALLOWABLE ON SUBSTANTIAL EXPANSION . ON APPEAL, IT WAS HELD THAT THE ASSESSEE HAD COMMITTED A MISTAKE IN CLAIMING DEDUCTION UNDER A WRONG SECTION AND THAT IT SHOULD BE ALLOWED THE SAME UNDER THE CORRECT ONE , I.E. 80- IC. THE FACTS OF THE CASE ARE ENTIRLY DIFFERENT. T HE ASSESSEES CLAIM HAS BEEN MADE UNDER A CORRECT SECTION ACCORDI NG TO IT, IT IS FOUND TO BE NOT ALLOWABLE IN LAW. HENCE, THE DECISION RELIED ON BY THE ASSESSEE ISN OT SUPPORTING ITS CAS E. 3.12 IN VIEW OF THE ABOVE DISCUSSIONS, THE DEDUCTIO N U/S 80 IC IS RESTRICTED TO 30% OF PROFITS OF THE INSTANT ASSESSM ENT YEAR. THE ASSESSEE MADE THE CLAIM OF DEDUCTION @ 100% OF PROFITS IN TH E SEVENTH YEAR WHILE IT KNEW FULLY WELL THAT IT WAS ELIGIBLE FOR DEDUCTI ON @ 30% OF THE PROFITS. THEREFORE, I HAVE REASONS TO BELIEVE THAT THE ASSES SEE FURNISHED INACCURATE PARTICULARS OF INCOME. ACCORDINGLY PROCE EDINGS U/S 271(1)(C ) OF THE ACT ARE BEING INITIATED SEPARATELY FOR FURNI SHING INACCURATE PARTICULARS OF INCOME. ITA NO.2786/DEL/2013 6 4. AGGRIEVED WITH THE AFORESAID ORDER OF THE AO, ASSESSEE APPEALED BEFORE THE LD. CIT(A) WHO VIDE IMPUGNED ORDER DATED 22.2.2013 UPHELD THE ORDER OF THE AO ON THE ISSUE OF DISPUTE AND DISMISSED THE APPEAL FILED BY THE ASSESSEE. 4.1 AGAINST THE ORDER DATED 22.2.2013 PASSED BY T HE LD. CIT(A), ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. FIRST WE TAKE UP THE GROUND NO. 4 & 5 RAISED BY THE ASSESSEE, IN THESE GROUNDS THE GRIEVANCE OF THE ASSESSEE IS THAT LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF AO OF NOT ALLOWING DEDUCTION U/S. 80 IC ON THE INTEREST INCOME OF RS. 35,44,359/-. THE AO HAS DENIED THE DEDUCTION O N THIS AMOUNT ON THE GROUND THAT IT IS NOT DERIVED FROM THE ELIGIBLE BU SINESS. ON THE OTHER HAND THE SUBMISSION OF THE ASSESSEE IS THAT INTEREST INCOME HAS ARISEN NOT ON ACCOUNT OF ANY INVESTMENT ACTIVITY BUT DUE TO COMPULSION OF PL ACING FDRS WITH BANK AS MARGIN FOR OBTAINING BANK GUARANTEE WHICH WAS PART OF THE COMMERCIAL ARRANGEMENT BETWEEN THE ASSESSEE AND ITS SUPPLIER. 5.1 WE HAVE HEARD BOTH THE PARTIES ON THE ISSUES IN DISPUTE AND ON CAREFUL CONSIDERATION, WE FIND THAT FULL FACTS RELATING TO ISSUE ARE NOT COMING OUT OF RECORDS. THE DEDUCTION U/S. 80IC ON THE IMPUGNED IN TEREST INCOME CAN BE ALLOWED ONLY IF IT IS ESTABLISHED THAT IT IS AROSE ON ACCOUNT OF COMPULSION OF BUSINESS. THEREFORE, THE ISSUES ARE SET ASIDE TO T HE FILE OF THE AO FOR FRESH ADJUDICATION FOR EXAMINING THE ASSESSEES CLAIM OF NEXUS OF INTEREST INCOME WITH BUSINESS. THE AO SHALL PROVIDE PROPER OPPORTUNITY TO THE ASSESSEE. ACCORDINGLY, THE GROUND NO. 4 & 5 ARE ALLOWED FOR STATISTICAL PU RPOSES. 6. NOW WE DEAL WITH THE GROUND NOS. 1, 2 & 3. AT TH E TIME OF HEARING, LD. COUNSEL OF THE ASSESSEE HAS STATED THAT THE ISSUE S INVOLVED IN GROUND NO. 1 TO 3 ARE SQUARELY COVERED BY THE ORDER DATED 29/1/201 4 OF THE COORDINATE BENCH OF TRIBUNAL DECIDED IN THE ASSESSEES OWN CASE IN ITA NO. 991/DEL/2013 FOR THE ASSESSMENT YEAR 2009-10. FOR THE SAKE OF CONVENIE NCE, HE FILED THE COPY OF THE TRIBUNALS ORDER DATED 29.1.2014. ACCORDINGLY, H E REQUESTED THAT THE ISSUE NO. 1, 2, & 3 IN THE PRESENT CASE MAY BE DECIDED IN F AVOUR OF THE ASSESSEE BY FOLLOWING THE TRIBUNALS ORDER IN ASSESSEES OWN CA SE. 7. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDERS OF THE REVENUE AUTHORITIES. ITA NO.2786/DEL/2013 7 8. WE HAVE HEARD BOTH THE PARTIES, PERUSED AND C ONSIDERED THE RELEVANT RECORDS AVAILABLE WITH US SPECIALLY THE IMPUGNED OR DERS PASSED BY THE REVENUE AUTHORITIES AND THE COPY OF THE ORDER DATED 29.1.2014 OF THIS BENCH PASSED IN THE CASE OF ASSESSEE TITLED AS TIR UPATI LPG INDUSTRIES LTD. VS. DCIT IN ITA NO. 991/DEL/2013 (AY 2009-10). THE RELEVANT PARA NOS. 10.3 TO 12 AT PAGE 11 TO 16 IS REPRODUCED BE LOW:- 10.3. THERE IS NO DISPUTE ON THE FACT THAT (A) THE ASSESSEE IS ENTITLED TO EXEMPTION U/S 80 IC OF THE ACT I.E. THA T THE ASSESSEE HAS SATISFIED ALL THE CONDITIONS SPECIFIED IN THE SECTION; (B) THAT THERE IS SUBSTANTIAL EXPANSION DU RING THE YEAR AS PER REQUIREMENT OF THE SECTION. 10.4. THE ONLY DISPUTE THAT ARISES FOR OUR CONSIDER ATION IS THE INTERPRETATION OF THE TERM INITIAL ASSESSMENT YEAR AND WHETHER THE SAME COMES WITH ANY RESTRICTION. THE RE VENUE SEEKS TO TAKE THE COLOR FROM THE OBJECT OF INTRODUC ING SECTION 80-IC. THE A.O. REFERRED TO POLICY OF THE GOVERNMEN T FOR GIVING INCENTIVES TO THE STATE OF UTTARANCHAL AND H IMACHAL PRADESH. IT IS WELL SETTLED THAT EXTERNAL AIDS SHOU LD NOT BE TAKEN FOR THE PURPOSE OF INTERPRETING THE STATUTE, WHEN THE LANGUAGE OF THE SECTION IS CLEAR AND UNAMBIGUOUS. A PLAIN READING OF SEC.80-IC(8)(V) WHICH DEFINES THE TERM INITIAL ASSESSMENT YEAR READ WITH SEC.80-IC(8)(IX) WHICH D EFINES THE TERM SUBSTANTIAL EXPANSION MAKES IT CLEAR THA T THERE IS NO RESTRICTION OR BAR ON MORE THAN ONE SUBSTANTIAL EXPANSION BEING UNDERTAKEN BY AN ASSESSEE. IN OUR VIEW, A UNI T CAN UNDERTAKE ANY NUMBER OF SUBSTANTIAL EXPANSIONS, IN THE ABSENCE OF ANY SPECIFIC RESTRICTION IN THE SECTION. THERE IS NO SUGGESTION IN THE LANGUAGE OF THE SECTION THAT INCE NTIVE U/S 80 IC IS NOT AVAILABLE IF THE ASSESSEE SUBSTANTIALLY E XPANDS FOR A SECOND OR THIRD TIME. SUBSTANTIAL EXPANSION REQUIRE S ADDITIONAL INVESTMENT AND RESULTS IN HIGHER PRODUCT ION, ITA NO.2786/DEL/2013 8 EMPLOYMENT ETC. INDUSTRIALISTS HAVE TO BE ENCOURAGE D TO UNDERTAKE SUBSTANTIAL EXPANSION. THE SECTION RECOGN IZES THIS FACT AND PROVIDES FOR AN INCENTIVE, IF AN ASSESSEE UNDERTAKES SUBSTANTIAL EXPANSION. 10.5. THE TERM SUBSTANTIAL EXPANSION IS STATED IN S.80- IC(8)(IX) REQUIRES INVESTMENT IN PLANT & MACHINERY EXCEEDING ATLEAST 50% OF THE BOOK VALUE OF PLANT AND MACHINER Y I.E. GROSS VALUE BEFORE TAKING DEPRECIATION INTO ACCOUNT . IF SUCH SUBSTANTIAL EXPANSION IS COMPLETED, THEN, FOR THE P URPOSE OF THIS SECTION, THE ASSESSMENT YEAR RELEVANT TO THE P .Y. IN WHICH SUCH SUBSTANTIAL EXPANSION IS COMPLETED BECOMES THE INITIAL ASSESSMENT YEAR. ONCE IT BECOMES THE INITIAL ASSESS MENT YEAR CONSEQUENTLY UNDER SUB SECTION (3) THE ASSESSEE WOU LD BE ENTITLED TO 100% DEDUCTION OF PROFITS AND GAINS FOR A PERIOD OF 5 YEARS COMMENCING FROM SUCH INITIAL ASSESSMENT YEA R, AND THEREAFTER THE % OF DEDUCTION FROM PROFITS COME DOW N. THE TERM INITIAL YEAR HAS BEEN DEFINED, AS A YEAR IN WHICH SUBSTANTIAL EXPANSION IS COMPLETED. THERE IS NOTHIN G TO SUGGEST THAT THERE CANNOT BE A SECOND INITIAL YEAR IF A SECOND SUBSTANTIAL EXPANSION IS COMPLETED. EVEN IF AN EXIS TING UNIT WHICH IS CLAIMING 80 IC, UNDERTAKES FIRST SUBSTANTI AL EXPANSION THEN ALSO THE YEAR OF COMPLETION OF THE SUBSTANTIAL EXPANSION WILL BE THE INITIAL YEAR. IF THE LITERAL MEANING OF THE TERM INITIAL ASSESSMENT YEAR IS TO BE TAKEN, THEN THER E IS NO REQUIREMENT OF DEFINING THIS TERM IN THE SECTION. W E HAVE TO GO BY THE LANGUAGE OF THE SECTION. 10.6. THE CIT(A) DENIES THE DEDUCTION ON THE GROUND THAT IT WOULD AMOUNT TO EVERGREENING OF AN INCENTIVE PROVIS ION. SUB SECTION (6) OF S.80-IC READS AS FOLLOWS. ITA NO.2786/DEL/2013 9 6) NOTWITHSTANDING ANYTHING CONTAINED IN THIS ACT, NO DEDUCTION SHALL BE ALLOWED TO ANY UNDERTAKING OR EN TERPRISE UNDER THIS SECTION, WHERE THE TOTAL PERIOD OF DEDUC TION INCLUSIVE OF THE PERIOD OF DEDUCTION UNDER THIS SEC TION, OR UNDER THE SECOND PROVISO TO SUB-SECTION (4) OF SECT ION 80-IB OR UNDER SECTION 10C, AS THE CASE MAY BE, EXCEEDS TEN ASSESSMENT YEARS. THIS SECTION IMPOSES A RESTRICTION FOR A TOTAL PERI OD OF 10 YEARS FOR CLAIMING THE DEDUCTION IN QUESTION, IRRESPECTIV E OF THE FACT WHETHER THE DEDUCTION IS CLAIMED U/S 80-IC OR U/S 8 0-IB OR U/S 10C AS THE CASE MAY BE. THUS THERE IS NO EVERGR EENING OF THE PROVISIONS. THE ASSESSEE CANNOT CLAIM THE SAID DEDUCTION FOR A TOTAL PERIOD EXCEEDING 10 YEARS. THE DEDUCTIO N COULD BE ALLOWABLE ONLY FOR THE BALANCE PERIOD OF 5 YEARS IN CLUDING THIS ASSESSMENT YEAR 2009-10. ONLY THE RATE OF DEDUCTION GOES UP. 10.7. THE CHANDIGARH B BENCH OF THE TRIBUNAL IN T HE CASE OF M/S S.R.PARYAVARAN ENGINEERS P.LTD. (SUPRA) WAS CONSIDE RING A CASE WHERE THE ASSESSEE ORIGINALLY CLAIMING DEDUCTION U/ S 80 IB(IV) OF THE ACT FROM THE A.Y. 1999-2000. FOR THE FIRST 5 YE ARS IT HAD CLAIMED EXEMPTION OF 100%. THEREAFTER IT UNDERTOOK SUBSTANTIAL EXPANSION AND CLAIMED DEDUCTION U/S 80 IB(IV). THE AO REJECTED THE SAME AND OBSERVED THAT BENEFIT COULD BE AVAILED U/S 80 IC AND AS THE SUBSTANTIAL EXPANSION WAS LESS THAN 50% OF THE VALUE OF PLANT ITA NO.2786/DEL/2013 10 AND MACHINERY THE CLAIM IS TO BE REJECTED. THE TRIB UNAL OBSERVED THAT THE ASSESSEE IS ENTITLED TO DEDUCTION U/S 80-I C. IT HELD THAT MERE MENTION OF A WRONG SECTION WOULD NOT DISENTIT LE THE ASSESSEE TO CLAIM THE ABOVE SAID DEDUCTION. TO OUR MIND THIS CASE LAW IS NOT DIRECTLY ON THE POINT. 11. IN VIEW OF THE ABOVE DISCUSSION, AS ON A PLAIN READING OF THE SECTION AND INTERPRETATION OF THE TERM INITIAL ASSE SSMENT YEAR, WE CONCLUDE THAT THE CLAIM OF THE ASSESSEE IS ADMISSIB LE. EVEN IF A VIEW IS TAKEN THAT THERE IS SOME AMBIGUITY IN THE LANGUA GE OF THE SECTION, THEN, BEING AN INCENTIVE PROVISIONS, THE R ATIO OF THE DECISIONS OF THE HONBLE SUPREME COURT IN THE CASE OF BAJAJ TEMPO (SUPRA), GWALIOR RAYON SILKS MFG.CO.LTD.(SUPRA) HAV E TO BE FOLLOWED AND BENEFIT GIVEN TO THE ASSESSEE. WE ALSO MAKE IT CLEAR THAT THE DEDUCTION CANNOT BE EXTENDED BEYOND THE PERIOD OF 1 0 YEARS FROM THE A.Y. 2004-05. 12. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED. 9. AFTER GOING THROUGH ALL THE RELEVANT FACTS AND C IRCUMSTANCES, ALL RECORDS AS WELL AS THE TRIBUNALS ORDER DATED 29.1 .2014 IN ASSESSEES OWN CASE, AS AFORESAID, WE ARE OF THE VIEW THAT THE FACTS AND CIRCUMSTANCES OF THE CASE INVOLVED IN THE ISSUE IN DISPUTE IS SQUARELY COVERE D BY THE TRIBUNALS ORDER DATED 29.01.2014 IN ASSESSEES OW N CASE. THEREFORE, ITA NO.2786/DEL/2013 11 RESPECTFULLY FOLLOWING THE PRECEDENT, AS AFORESAID , WE DELETE THE ADDITION IN DISPUTE AND QUASH THE ORDERS OF THE REVENUE A UTHORITIES AND ALLOWED THE GROUND NO. 1, 2 & 3 RAISED BY THE ASSESSEE. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 10/2/2016. SD/- SD/- [L.P. SAHU] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 10/2/2016 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES