DCIT, Circle , Parwanoo V. M/s Rubykon Manufacturing Co., Kala Amb

ITA 617/CHANDI/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 2350 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 04-05-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH B,CHANDIGARH !, ' # $ . .. . & , '( # BEFORE: SMT. DIVA SINGH, JM & DR. B.R.R.KUMAR, AM ./ ITA NO. 617/CHD/2018 / A.Y : 2014-15 THE DCIT, CIRCLE, PARWANOO. VS M/S RUBYKON MANUFACTURING CO., VILLAGE OGLI, KALA AMB, SIRMOUR (HP). ./ PAN NO: AAJFR0316D / APPELLANT / RESPONDENT ! / REVENUE BY : SHRI MANJIT SINGH, SR.DR '# ! / ASSESSEE BY : NONE $ % #&/ DATE OF HEARING : 09.10.2018 '()* #&/ D ATE OF PRONOUNCEMENT : 29.10.2018 ')/ ORDER PER DIVA SINGH THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE ASSAILING THE CORRECTNESS OF THE ORDER DATED 08.02.2018 OF CIT(A) SHIMLA PERTAINING TO 2014-15 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LD. CIT (A) HAS ERRED IN DELETING THE ADDITION OF RS.82,17,253/- MADE BY AO BY RESTRICTING THE CLAIM OF THE ASSESSEE TO 25% AS AGAINST THE 100% CLAIM MADE IN T HE 8 TH YEAR, IGNORING THE FACT THAT UNITS WHICH COMMENCED PRODUCTION AFTER 07.01. 2003 CANT CARRY OUT MULTIPLE 'SUBSTANTIAL EXPANSION' AS PER PROVISIONS OF SECTIO N 80-IC OF THE INCOME TAX ACT AND AS EXPLAINED IN CBDT CIRCULAR NO. 7/2003. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT (A) HAS ERRED IN HOLDING THAT THERE CAN BE MORE THAN ONE 'INITIAL AS SESSMENT YEAR' FOR AVAILING THE DEDUCTION UNDER SECTION 80-IC OF THE INCOME TAX ACT . IN OTHER WORDS, THE ASSESSEE CAN FIRST CLAIM DEDUCTION FROM THE INITIAL ASSESSMENT Y EAR, BEING THE YEAR OF SETTING UP OF THE INDUSTRIAL UNDERTAKING AND, THEREAFTER, ONCE AG AIN CLAIM THE DEDUCTION FROM ANOTHER INITIAL ASSESSMENT YEAR, BEING THE ASSE SSMENT YEAR IN WHICH THE ASSESSEE CARRIES OUT SUBSTANTIAL EXPANSION OF ITS UNDERTAK ING. 2. AT THE TIME OF HEARING, NO ONE WAS PRESENT ON BEHALF OF THE ASSESSEE. THE RECORD SHOWS THAT NOTICE HAS BEEN SENT TO THE AS SESSEE AT THE ADDRESS MENTIONED IN FORM NO. 11 IN THE MEMO OF APPEAL FILED. THE LD. S R.DR MR. MANJIT SINGH RELYING UPON DECISION OF THE APEX COURT IN T HE CASE OF CIT VS CLASSIC BINDING INDUSTRIES (2018) 96 TAXMANN.COM 405 (S.C) SU BMITTED THAT ITA 617/CHD/2018 A.Y.2014-15 PAGE 2 OF 2 THE POINT AT ISSUE IS FULLY COVERED IN FAVOUR OF THE DEPART MENT. INVITING ATTENTION TO THE IMPUGNED ORDER, IT WAS HIS SUBMISSION THA T DEDUCTION @ 100% OF ELIGIBLE PROFITS QUA MANUFACTURING ACTIVITY IN THE 8 TH YEAR WAS MADE BY THE AO RELYING UPON THE PROVISIONS OF THE ACT AS CON SIDERED BY THE ITAT IN THE CASE OF HYCRON ELECTRONICS V ITO IN ITA 798/CHD/201 2 DATED 27.05.2015 WHICH STOOD UPSET BY THE CIT(A) RELYING UPON T HE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF M/S STOVE CRAFT I NDIA VERSUS CIT-V AND OTHERS IN ITA 20 TO 24/2015. IT WAS HIS SUBMISSION THAT THE SAID DECISION HAS NOT BEEN APPROVED BY THE HON'BLE APEX COU RT, ACCORDINGLY RELYING UPON THE SAID DECISION, IT WAS HIS PRAYER THAT THE DEPARTMENTAL APPEAL MAY BE ALLOWED. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IT IS SEEN THAT IN THE FACTS OF THE PRESENT CAS E, QUA MANUFACTURING ACTIVITY THE ASSESSEE HAD STARTED ITS OPERATION ON 08.04 .2006 AND THE CLAIM OF DEDUCTION @ 100% OF ELIGIBLE PROFITS STOOD EXHAUSTED FOR FI VE YEARS AND THE AO IN THE FACTS OF THE PRESENT CASE, CONSIDERING THE YEA R UNDER CONSIDERATION BEING THE 8 TH YEAR, RESTRICTED THE DEDUCTION TO THE EXTENT OF 25% W HICH POSITION OF LAW HAS BEEN CONFIRMED BY THE APEX COURT IN T HE AFORESAID DECISION IN THE CASE OF CIT VS CLASSIC BINDING INDUSTRIES (SU PRA). ACCORDINGLY, IN TERMS OF THE SAID JUDICIAL PRECEDENT AVAILABL E, THE APPEAL OF THE REVENUE IS ALLOWED. THE IMPUGNED ORDER IS SET ASIDE UPHOLDING THE ASSESSMENT ORDER. 4. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29.10. 2018. SD/- SD/- ( . .. . & ) ( ! ) (DR. B.R.R. KUMAR) (DIVA SINGH) '( #/ ACCOUNTANT MEMBER ' #/ JUDICIAL MEMBER + , (+ #,- .-#/ COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT - 2. / THE RESPONDENT - 3. $ /#/ CIT 4. $ /# ()/ THE CIT(A) 5. -23 #4, & 4, 67839/ DR, ITAT, CHANDIGARH 6. 38 :%/ GUARD FILE (+ $ / BY ORDER, ; / ASSISTANT REGISTRAR ITAT,CHANDIGARH.