ITO, Ward, Baddi V. M/s V.R. Papercone Industries, Solan

ITA 445/CHANDI/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7492 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 11-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, SMD, CHANDIGARH BEFORE MS. DIVA SINGH, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO 445/CHD/2018 ASSESSMENT YEAR : 2014-15 THE ITO, VS. M/S V.R. PAPER CONE INDUSTRIES, WARD-BADDI, VILLAGE DAMMUWALA, BADDI, (H.P.) DISTT.SOLAN (HP). PAN NO. AAGFV1990E (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI AKHILESH GUPTA, SR.DR RESPONDENT BY : SHRI ASHWANI KUMAR, C.A. DATE OF HEARING : 27.06.2018 DATE OF PRONOUNCEMENT : 27.07.2018 ORDER PER DIVA SINGH THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE ASSAILIN G THE CORRECTNESS OF THE ORDER DATED 17/01/2018 OF CIT(A) SHIM LA PERTAINING TO 201415 ASSESSMENT YEAR ON THE FOLLOWING GROUND : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 25,25,950/- MADE BY THE A.O. BY RESTRICTING THE CLAIM OF THE ASSESSEE TO 25% AS AGAINST THE 100% CLAIM MADE IN THE 8 TH YEAR, IGNORING THE FACT THAT UNITS WHICH COMMENCED PRODUCTION AFTER 07.01.2003 CAN'T CARRY O UT MULTIPLE 'SUBSTANTIAL EXPANSION' AS PER PROVISIONS OF SECTION 80-IC OF TH E INCOME TAX ACT AND AS EXPLAINED IN CBDT CIRCULAR NO. 07/2003. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN HOLDING THAT THERE CAN BE MORE THAN ONE 'INITIAL ASSES SMENT YEAR' FOR AVAILING THE DEDUCTION UNDER SECTION 80IC OF THE INCOME TAX ACT. IN OTHER WORDS, THE ASSESSEE CAN FIRST CLAIM DEDUCTION FROM THE INITIAL ASSESSMENT YEAR, B EING THE YEAR OF SETTING UP OF THE INDUSTRIAL UNDERTAKING AND, THEREAFTER, ONCE AGAIN CLAIM THE DEDUCTION FROM ANOTHER INITIAL ASSESSMENT YEAR, BEING THE ASSESSMENT YEAR IN WHICH THE ASSESSEE CARRIES OUT SUBSTANTIAL EXPANSION OF ITS UNDERTAKING. 2. IT WAS A COMMON STAND OF THE PARTIES BEFORE TH E BENCH THAT THE ISSUE IS COVERED BY THE ORDER OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF M/S STOVEKRAFT INDIA VERSUS CIT REPORTED IN 400 ITR 225 (HP). 3. THE RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSE E FIRM IS ENGAGED IN MANUFACTURING OF PAPER CORNS WHICH ARE USED IN SPINNING IND USTRY. THE DEDUCTION CLAIMED U/S 80IC OF THE ACT TO THE EXTENT OF 1 00% OF ELIGIBLE PROFITS WAS DECLINED IN THE YEAR UNDER CONSIDERATION REJEC TING THE CLAIM OF HAVING CARRIED OUT SUBSTANTIAL EXPANSION IN 2012-13 ASSES SMENT YEAR ON THE GROUNDS THAT THE YEAR UNDER CONSIDERATION WAS THE 8 TH YEAR AND THE FIVE ITA-445/CHD/2018 A.Y. 2014-15 PAGE 2 OF 2 YEAR PERIOD FOR CLAIMING SUCH DEDUCTION STOOD EXHAUSTED FROM 2007-08 TO 2011-12 ASSESSMENT YEAR. 4. THE CIT(A) RELYING UPON THE AFORESAID DECISION OF THE JU RISDICTIONAL HIGH COURT, ALLOWED THE APPEAL OF THE ASSESSEE. AGGRIEVED B Y THIS, THE REVENUE IS IN APPEAL BEFORE THE ITAT. 5. SINCE THE ISSUE IS NO LONGER RE-INTEGRA AND STANDS DE CIDED BY THE JURISDICTIONAL HIGH COURT, THUS IN THE ABSENCE OF ANY ARGU MENT DISTINGUISHING EITHER ON FACTS OR POSITION OF LAW, RESPECTFULLY FOLLOWING THE DECISION OF THE HON'BLE HIGH COURT, THE DEPARTMENTAL APPEA L IS DISMISSED. SAID ORDER WAS PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING IT SELF. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 27.07. 2018. SD/- SD/- (ANNAPURNA GUPTA) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMB ER POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR ASSTT. REGISTRAR ITAT,CHANDIGARH.