ITO, Ward, Parwanoo V. Sh. Sudhish Soni, Parwanoo

ITA 507/CHANDI/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7578 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-07-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 23-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MANOJ KUMAR CA
• 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 NO. 506/CHD/2018 ASSESSMENT YEAR: 2014-15 THE ITO, WARD, VS. M/S JAIN INDUSTRIAL MANUFACTUR ING CO., PARWANOO (HP) NEAR HRTC, KALI MANDIR, SECTOR 1, PARWANOO, PAN NO. AAFFJ5907N (APPELLANT) (RESPONDENT) APPELLANT BY : SH MANOJ KUMAR SR. DR RESPONDENT BY : SH. MANOJ KUMAR, CA & ITA NO. 507/CHD/2018 ASSESSMENT YEAR: 2014-15 THE ITO, WARD, VS. SMT. SUDHISH SONI, PARWANOO (HP) PROP M/S SUNRISES PACKAGING, VALLEY VIEW, SECTOR 1, PARWANOO PAN NO. AUAPS3289F APPELLANT BY : SH MANOJ KUMAR SR. DR RESPONDENT BY : SH. SURINDER BABBAR, CA DATE OF HEARING : 02.07.2018 DATE OF PRONOUNCEMENT : 02.07.2018 ORDER PER BENCH: THE CAPTIONED APPEALS HAVE BEEN PREFERRED BY THE RE VENUE AGAINST THE SEPARATE ORDERS OF COMMISSIONER OF INCO ME TAX (APPEALS), ITA NO. 506 & 507/CHD/2018- JAIN INDUSTRIAL MANUFACATURING CO & SUDISH SONI, PA RWANOO 2 SHIMLA [HEREINAFTER REFERRED TO AS CIT(A)] DATED 19 & 20.02.2018 RESPECTIVELY. SINCE THE COMMON ISSUE RELATING TO TH E DEDUCTION CLAIMED U/S 80IC OF THE ACT HAS BEEN RAISED IN BOTH THE APP EALS, THEREFORE, THEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. ITA NO.506/CHD/2018 IS TAKEN AS LEAD CASE FOR THE PURPOSE OF NARRATION OF FACTS. 2. THE BRIEF FACTS RELATING TO THE ISSUE ARE THAT T HE ASSESSEE CLAIMED DEDUCTION U/S 80IC OF THE ACT @100% ON ACCO UNT OF SUBSTANTIAL EXPANSION OF THE UNIT. THE ASSESSING O FFICER, HOWEVER, DENIED THE CLAIM OBSERVING THAT ASSESSEE ONCE HAD A VAILED THE DEDUCTION U/S 80IC AT THE TIME OF ESTABLISHMENT OF UNIT AND THUS WAS NOT ENTITLED TO 100% DEDUCTION SUBSEQUENTLY ON ACCO UNT OF SUBSTANTIAL EXPANSION. THE LD. CIT(A), HOWEVER, DELETED THE AD DITIONS SO MADE BY THE ASSESSING OFFICER RELYING UPON THE JUDGEMENT OF THE HON'BLE H.P. HIGH COURT SHIMLA IN THE CASE OF M/S STOVE KRA FT INDIA VS. CIT (SUPRA). THE REVENUE IS, THUS, IN APPEAL BEFORE US AGITATING THE ABOVE ACTION OF THE CIT(A). 3. FURTHER, IT HAS BEEN BROUGHT TO OUR NOTICE THAT THE ISSUE INVOLVED IN THESE APPEALS NOW IS WELL SETTLED WHICH HAS ALR EADY BEEN ADJUDICATED BY THE HONBLE HIMACHAL PRADESH HIGH COURT VIDE THE IR ORDER DT. 28 NOVEMBER 2017 IN THE GROUP OF CASES WITH THE LEAD C ASE TITLED AS M/S STOVEKRAFT INDIA VS. COMMISSIONER OF INCOME TAX, IT A NO.20 OF 2015, AND IT HAS BEEN POINTED OUT THAT THE HONBLE HIGH C OURT HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE, HOLDING THAT THERE IS NO BAR IN THE SAID SECTION DENYING THE BENEFIT OF HUNDRED PERCENT DEDU CTION TO NEW UNITS UNDERTAKING SUBSTANTIAL EXPANSION. OUR ATTENTION HA S BEEN DRAWN TO THE ITA NO. 506 & 507/CHD/2018- JAIN INDUSTRIAL MANUFACATURING CO & SUDISH SONI, PA RWANOO 3 RELEVANT CONCLUSIONS OF THE HONBLE HIGH COURT IN T HIS REGARD AT PARA 55 OF THE ORDER WHICH READ 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 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)]. 4. LD. DR HAS FAIRLY ADMITTED THAT THE ISSUE IS SQU ARELY COVERED BY THE ABOVE DECISION OF THE HON'BLE JURISDICTIONAL HI GH COURT. HE, HOWEVER, HAS SUBMITTED THAT THE ISSUE BE RESTORED T O THE FILE OF THE ASSESSING OFFICER FOR VERIFICATION AS TO WHETHER TH E ASSESSEE HAS ACTUALLY CARRIED OUT THE SUBSTANTIAL EXPANSION TO B E ENTITLED TO CLAIM DEDUCTION U/S 80IC OF THE ACT. ITA NO. 506 & 507/CHD/2018- JAIN INDUSTRIAL MANUFACATURING CO & SUDISH SONI, PA RWANOO 4 5. WE DO NOT AGREE TO THE ABOVE CONTENTION RAISED B Y THE REVENUE AT THIS STAGE. A PERUSAL OF THE ORDER OF THE ASSESSING OFFICER REVEALS THAT THE ASSESSING OFFICER HAS NOT DISPUTED THAT THE ASS ESSEE UNIT HAS CARRIED OUT SUBSTANTIAL EXPANSION AS PROVIDED UNDER CLAUSE (B) OF SUB SECTION (2) READ WITH CLAUSE (IX) OF SUB SECTION (7) OF SEC TION 80IC OF THE ACT. ALMOST SIMILAR VIEW HAS ALSO BEEN TAKEN BY THE HON' BLE HIMACHAL PRADESH HIGH COURT IN THE CASE OF M/S STOVEKRAFT I NDIA 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 OFFICER A SECOND INNINGS TO RE-EXAMINE UNDISPUTED FACTS. 6. IN VIEW OF THE ABOVE DISCUSSION, WE FIND THAT TH E LD. CIT(A) THAT CORRECTLY FOLLOWED THE JUDGEMENT OF THE HON'BLE H.P . HIGH COURT SHIMLA IN THE CASE OF M/S STOVE KRAFT INDIA VS. CIT (SUPRA). WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) AND THE S AME IS, THEREFORE, UPHELD. OUR FINDINGS GIVEN ABOVE MUTATIS-MUTANDIS APPLIES TO ITA NO.507/CHD/2018 ALSO. IN THE RESULT, BOTH APPEALS OF THE REVENUE ARE DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT SD/- SD/- (ANNAPURNA GUPTA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 02.07.2018 ITA NO. 506 & 507/CHD/2018- JAIN INDUSTRIAL MANUFACATURING CO & SUDISH SONI, PA RWANOO 5 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR