M/s Him Overseas, Chandigarh V. ACIT, C-4(1), Chandigarh

ITA 780/CHANDI/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 8493 (ITAT-CHANDIGARH)
• Duration Of Justice: 10 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-04-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 27-03-2019
• Assessment Year: 2010-2011
• Appeal Filed On: 29-05-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: YOGENDRA MITTAL
• Keywords: Depreciation; Difference of opinion; Validity of assessment; Change of opinion
• Section: 80IB; 147; 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCHA, CHANDIGARH BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NOS. 780, 781 & 782/CHD/2018 ASSESSMENT YEARS: 2010-11 TO 2012-13 M/S HIM OVERSEAS VS. THE ASSTT. CIT, SCO 19, 1 ST FLOOR, CIRCLE 4(1), SECTOR 7C, CHANDIGARH CHANDIGARH PAN NO. AABFH7617P ITA NOS. 778, 821 & 822/CHD/2018 ASSESSMENT YEARS: 2010-11 TO 2012-13 THE ASSTT. CIT VS. M/S HIM OVERSEAS CIRCLE4(1), HOUSE NO. 39, SEC-28A CHANDIGARH CHANDIGARH (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. VINEET KRISHAN REVENUE BY : SH. YOGENDRA MITTAL DATE OF HEARING : 27/03/2019 DATE OF PRONOUNCEMENT : 08/04/2019 ORDER PER BENCH ALL THE ABOVE CAPTIONED CROSS APPEALS RELATE TO TH E SAME ASSESSEE AND ARE AGAINST SEPARATE ORDERS PASSED BY THE COMMISSIO NER OF INCOME TAX(APPEALS)-2,CHANDIGARH (IN SHORT REFERRED TO AS CIT(A), U/S 250(6) OF THE INCOME TAX ACT,1961,(HEREINAFTER REFERRED TO AS AC T) , DATED 26-03-18 FOR ASSESSMENT YEAR (A.Y)2010-11 AND 29-03-18 FOR A.Y 2011-12 & 2012-13. 2. IT WAS COMMON GROUND THAT THE ISSUE INVOLVED IN ALL THE APPEALS WAS IDENTICAL. THEY WERE ALL THEREFORE HEARD TOGETHER A ND ARE BEING DISPOSED OFF BY THIS COMMON ORDER. 3. IT WAS POINTED OUT THAT ALL THE ABOVE CASES WERE REOPENED FOR ASSESSMENT UNDER THE PROVISIONS OF 147 OF THE ACT AND THE SOL E ISSUE INVOLVED IN ALL THE ABOVE APPEALS RELATED TO RESTRICTION OF CLAIM OF DE DUCTION UNDER SECTION 80IC OF THE ACT, ,TO 25% OF THE ELIGIBLE PROFITS ,BY TH E ASSESSING OFFICER, AS AGAINST 100% CLAIMED BY THE ASSESSEE ON ACCOUNT OF SUBSTANT IAL EXPANSION UNDERTAKEN, 2 AFTER HAVING CLAIMED 100% DEDUCTION OF ELIGIBLE PRO FITS FOR THE STIPULATED PERIOD OF 5 YEARS.IT WAS POINTED OUT THAT IN APPEAL, THE LD. CIT(A) HAD ALLOWED THE ASSESSEES CLAIM ON MERITS, WHILE THE LEGAL GROUND RAISED BEFORE HIM, CHALLENGING THE VALIDITY OF THE ASSESSMENT FRAMED U NDER SECTION 147 OF THE ACT, WAS NOT ADJUDICATED. 4. AGGRIEVED BY THE SAME, THE ASSESSEE BEFORE US HA S CHALLENGED THE NON ADJUDICATION OF THE LEGAL GROUND BY THE LD. CIT(A) IN ITS APPEAL IN ITA NOS.780,781 & 782/CHD/2018, RAISING THE FOLLOWING IDENTICAL GROUNDS: 1. THAT THE ORDER PASSED BY LD. COMMISSIONER OF INCOME TAX (APPEALS)-II, CHANDIGARH VIDE APPEAL NO. 1/10448/16-17 DATED 26.03.2018 IS C ONTRARY TO LAW AND FACTS OF THE CASE. 2. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E LD. COMMISSIONER OF INCOME TAX (APPEALS) GRAVELLY ERRED IN NOT ADJUDICATING GROUND NO.2 WHICH IS REGARDING INITIATION OF PROCEEDINGS UNDER SECTION 147 OF THE INCOME TAX ACT , 1961 WHICH WERE INVALID, VOID AB- INITIO AND BASED ON MERE CHANGE OF OPINION. 3. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E LD. ASSESSING OFFICER GRAVELLY ERRED IN RE-OPENING THE ASSESSMENT WHICH IS VOID AB INITI O AS PROCEEDINGS WERE INITIATED ONLY ON THE CHANGE OF OPINION AS ALL THE FACTS AND MATERIAL WERE DISCLOSED DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS. 4. THAT THE APPELLANT CRAVES TO ADD, AMEND OR ALTER AN Y GROUND OF APPEAL BEFORE OR AT THE TIME OF HEARING OF APPEAL, WITH THE PERMISSION OF THE HON'BLE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH. WHILE THE REVENUE HAS CHALLENGED THE ACTION OF THE LD. CIT(A) IN ALLOWING THE CLAIM OF THE ASSESSEE UNDER SECTION 80IC OF THE ACT IN ALL ITS APPEALS IN ITA NO.778,821 & 822/CHD/2018, RAISING THE FOLLOWING I DENTICAL GROUNDS: (I) WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS NOT ERRED IN PARTLY ALLOWING THE APPEAL OF THE ASSE SSEE WITHOUT APPRECIATING THE FACTS OF THE CASE ? (II) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS NOT ERRED IN LAW AND FACT IN DELETING THE ADDITION OF RS.71,9 2,851/- (MADE ON ACCOUNT OF RESTRICTING THE CLAIM OF DEDUCTION U/S 80-IC OF THE INCOME TAX ACT, 1961 @ 25%) WITHOUT DISCUSSING THE MERITS OF THE ISSUE INVOLVED AND BY RELYING ON THE DECISION OF HON TALE HIMACHAL PRADESH HIGH COURT IN THE CASE OF M/S STOVEKRAFT IN DIA AND THE DECISION OF HONT>LE JURISDICTIONAL TRIBUNAL IN THE CASE OF M/S/ EUROLIN KS, WHEN THESE JUDGMENTS HAVE NOT BEEN ACCEPTED BY THE DEPARTMENT ON MERITS AND SLP HAS BE EN FILED IN SUCH CASES ? (III) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS NOT ERRED IN ALLOWING THE DEDUCTION U/S 80IC @ 100% TO THE ASSES SEE FOR 10 YEARS WITHOUT APPRECIATING AND IGNORING THE REAL INTENT AND PURPOSE OF INSERTI ON OF SECTION OF 80IC AND THE CBDT CIRCULAR NO. 7 OF 2003 DATED 05.09.2003 AND CIRCULA R NO. 49 OF 2003 OF CENTRAL EXCISE DEPARTMENT AND THE SUBSIDY SCHEME ISSUED BY MINISTR Y OF COMMERCE AND INDUSTRY, DIPP, GOI, WHICH ARE BINDING IN LAW ON AUTHORITIES AND AN YTHING WHICH IS LEGALLY RELEVANT, IS TO BE CONSIDERED FOR IMPLEMENTATION AS LAID DOWN BY SC IN 131 ITR 597(SC). (IV) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS NOT ERRED IN ALLOWING THE DEDUCTION U/S 80IC @ 100% TO THE ASSES SEE FOR 10 YEARS WITHOUT APPRECIATING AND IGNORING THE FACT THAT A PERUSAL OF THE PROVISO WOULD SHOW THAT BEFORE THE INTRODUCTION OF SECTION 80IC, THE DEDUCTION TO THE BACKWARD STATES WAS AVAILABLE IN TERMS OF SECTION 80IB (4), THE THIRD PROVISO MAKES CLEAR THAT AFTER 31.03.2004, THIS DEDUCTION WILL BE AVAILABLE ONLY UNDER SECTION 80IC, AND DEDUCTION WOULD BE @ 100% FOR THE FIRST FIVE YEARS THAT THERE AFTER @ 25%. (V) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW THE CIT(A) HAS NOT IGNORED THE EXPLICIT STATUTORY PROVISION OF THE SECOND PROVISO THAT CLARIFIES THAT IN THE CASE OF STATES OF NORTH-EASTERN REGIONS, THE DEDUCT ION WOULD BE @100% WAS ALLOWABLE FOR 3 10 YEARS WHEREAS IN THE CASE OF STATES OF HIMACHAL PRADESH, THE DEDUCTION WAS ALLOWABLE @ 100% FOR FIRST FIVE YEARS AND 25% FOR THE NEXT FI VE YEARS. (VI) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) (BY RELYING ON THE JUDGMENTS IN THE CASE OF M/S STOVEKRAFT INDIA ( SUPRA), NIRMAL SINGH PROP. K.N. PAPER & PACKAGES (SUPRA), IN THE CASE OF M/S EUROLINKS IN I TA NO. 1049/CHD/2017 ) HAS NOT ERRED IN HOLDING THAT THOSE UNDERTAKINGS OR ENTERPRISES WHIC H COMMENCED PRODUCTION AFTER 07.01.2013 CAN CARRY OUT MULTIPLE 'SUBSTANTIAL EXPA NSION' PRIOR TO 01.04.2012 AND THERE WILL BE INITIAL YEAR FOR EACH 'SUBSTANTIAL EXPANSION' AS LONG AS PROVISION OF SECTION 80IC(IX) ARE MET WITHOUT APPRECIATING THAT AS PER PROVISION OF S ECTION 80IC(2)(II) OF THE INCOME TAX ACT AND AS EXPLAINED IN CBDT CIRCULAR NO. 7/2003, READ WITH CIRCULAR NO. 49/2003 ISSUED BY CENTRAL EXCISE DEPARTMENT THAT BENEFIT OF SUBSTANTI AL EXPANSION WAS AVAILABLE ONLY TO UNITS THAT EXISTED AND WERE OPERATIONAL AS ON 07.01 .2003 AND SUBSTANTIAL EXPANSION COULD HAVE BEEN CARRIED OUT ONLY ON OR AFTER 07.01.2003 B Y AN UNDERTAKING THAT EXISTED PRIOR TO 07.01.2003. (VII) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS NOT ERRED IN ALLOWING THE DEDUCTION U/S 80IC @ 100% TO THE ASSES SEE FOR 10 YEARS WITHOUT APPRECIATING AND IGNORING THE FACT THAT THE EXPRESSION SUBSTANTI AL EXPANSION HAS BEEN USED IN BOTH SECTION 80IC(2)(A) AND 80IC(2)(B) HOWEVER 80IC(2)(A )(II) AND 80IC(2)(B)(II) IS APPLICABLE TO H.P. OR UTTRAKHAND AND 80IC(A)(III) AND 80IC(B)(III ) ARE APPLICABLE TO THE NORTH EASTERN STATES WHEN COMPARED WITH RATE OF DEDUCTION PROVIDE D U/S 80IC(3)(II), THE RATE GIVEN IS 100% FOR FIVE YEARS, AND 25% FOR NEXT FIVE YEARS, W HEREAS UNDER SUB SECTION 3(I), THE RATE HAS BEEN GIVEN @ 100% FOR NE STATES AND SIKKIM FOR ALL 10 YEARS AND THE MEANING OF SUBSTANTIAL EXPANSION WILL BE RENDERED REDUNDANT. (VIII) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCE S OF THE CASE AND IN LAW, THE LD. CIT(A) IS JUSTIFIED IN HOLDING THAT AN UNDERTAKING WHICH HAS CARRIED OUT SUBSTANTIAL EXPANSION IN ANY ASSESSMENT YEAR PRIOR TO 01.04.201 2 CAN OPT FOR THAT ASSESSMENT YEAR AS INITIAL ASSESSMENT YEAR FOR THE PURPOSE OF CLAIMING DEDUCTION U/S 80IC(3) OF THE INCOME TAX ACT WITHOUT APPRECIATING THE FACT THAT AN UNDER TAKING SET UP AFTER 07.01.2003 IS NOT ENTITLED TO BENEFIT OF 'SUBSTANTIAL EXPANSION' IN V IEW OF THE PROVISIONS OF SECTION 80IC(2)(A)(II) AND 80IC(2)(B)(II) AND AS CLARIFIED IN CBDT CIRCULAR NO. 7 OF 2003?' (IX) IT IS PRAYED THAT THE ORDER OF LD. CIT(A) BE S ET ASIDE AND THAT OF THE ASSESSING OFFICER MAY BE RESTORED. (X) THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY GROUNDS OF APPEAL BEFORE THE APPEAL IS HEARD OR IS DISPOSED OFF. 5. BRIEF FACTS RELEVANT TO THE CASE ARE THAT THE A SSESSEE FIRM WAS ENGAGED IN THE BUSINESS OF MANUFACTURING OF GALVANISED FENCE F ITTINGS, SCAFFOLDINGS AND ACCESSORIES ETC. FOR EXPORT AND DOMESTIC MARKET , A ND WAS ELIGIBLE FOR DEDUCTION U/S 80IC OF THE ACT. THE ASSESSEE HAD C OMMENCED ITS BUSINESS FROM 27.07.2004 AND HAD CLAIMED DEDUCTION @ 100% OF TH E ELIGIBLE PROFITS FOR THE INITIAL 5 YEARS BEGINNING FROM ASSESSMENT YEAR 2005 -06 TO A.Y 2009-10.THEREAFTER, IN ASSESSMENT YEAR 2010-11,IT UNDERTOOK SUBSTANTI AL EXPANSION AND ON THAT BASIS AGAIN CLAIMED DEDUCTION @100% OF ITS ELIGIBLE PRO FITS FOR THE IMPUGNED YEARS BEFORE US, I.E A.Y. 2010-11,2011-12 & 2012-13 WHIC H WERE THE 6 TH ,7 TH & 8 TH YEAR OF ITS OPERATION . KEEPING IN VIEW THE ABOVE STATED FA CTS, PROCEEDINGS IN THE IMPUGNED CASES WERE INITIATED U/S 147 OF THE ACT, A FTER RECORDING REASONS AND OBTAINING NECESSARY APPROVAL. IN RESPONSE, THE COUN SEL OF THE ASSESSEE FILED VARIOUS OBJECTIONS W.R.T INITIATION OF PROCEEDINGS U/S 147. THE OBJECTIONS RAISED BY THE ASSESSEE WERE DULY DISPOSED OFF BY PASSING A SP EAKING ORDER BY ASSESSING OFFICER( AO). THE ASSESSEE ALSO MADE VARIOUS SUBMIS SIONS TO JUSTIFY THE CLAIM OF 100% DEDUCTION U/S 80IC ON THE BASIS OF THE 'SUBSTA NTIAL EXPANSION' CARRIED OUT 4 BY IT. THE SUBMISSIONS OF THE ASSESSEE WERE CONSIDE RED BUT NOT FOUND ACCEPTABLE BY THE AO. PLACING RELIANCE ON THE DECIS ION OF THE HON'BLE ITAT, CHANDIGARH IN THE CASE OF HYCRON ELECTRONICS VS ITO (ITA NO. 798/CHD/2012), THE AO HELD THAT THE ASSESSEE WAS NOT ELIGIBLE FOR DEDU CTION AS A CONSEQUENCE OF SUBSTANTIAL EXPANSION @100% OF ITS ELIGIBLE PROFIT S AFTER HAVING CLAIMED ITS ENTIRE PROFITS AS DEDUCTION FOR 5 YEARS AND ACCORDINGLY RESTRICTED THE DEDUCTION U/S 80IC OF THE I.T ACT TO 25% OF THE ELIGIBLE PROFITS INSTEAD OF 100% AS CLAIMED BY THE ASSESSEE, IN ALL THE IMPUGNED YEARS. 6. THE MATTER WAS CARRIED IN APPEAL BEFORE THE LD. CIT(A) WHO ALLOWED THE ASSESSEES APPEAL FOR ALL THE IMPUGNED YEARS, FOLL OWING THE DECISION OF JURISDICTIONAL HIGH COURT IN THE CASE OF M/S STOVE CRAFT INDIA VS COMMISSIONER OF INCOME TAX, 160 DTR 378(H.P) 7. BEFORE US ,AT THE OUTSET ITSELF IT WAS POINTED OUT BY BOTH THE PARTIES THAT THE HON'BLE APEX COURT HAD SETTLED THIS ISSUE IN FA VOUR OF THE ASSESSEE IN A BUNCH OF CASES, WITH THE LEAD CASE BEING PR.CIT, SH IMLA VS. M/S AARHAM SOFTRONICS IN CIVIL NO.1784 OF 2019 DATED 20.2.2019 . 8. WE HAVE GONE THROUGH THE ORDER OF THE HON'BLE AP EX COURT IN THE CASE OF M/S AARHAM SOFTRONICS (SUPRA) AND FIND THAT THE HON 'BLE APEX COURT DEALT WITH THE ENTIRE SCHEME OF THE ACT RELATING TO THE RELEVA NT SECTION I.E. SECTION 80IC OF THE ACT, AND ARRIVED AT THE CONCLUSION THAT THE DEF INITION OF THE INITIAL ASSESSMENT YEAR CONTAINED IN CLAUSE (V) OF SUB-SECTION(8) OF S ECTION 80IC OF THE ACT CAN LEAD TO A SITUATION WHERE THERE CAN BE MORE THAN ON E ASSESSMENT YEAR WITHIN THE SAID PERIOD OF TEN YEARS. THE RELEVANT FINDING OF THE HON'BLE APEX COURT AT PARA 19 OF ITS ORDER IS AS UNDER: 19. HAVING EXAMINED THE SCHEME IN THE AFORESAID MA NNER, WE ARRIVE AT THE CONCLUSION THAT THE DEFINITION OF INITIAL ASSESSME NT YEAR CONTAINED IN CLAUSE (V) OF SUB- SECTION (8) OF SECTION 80-IC CAN LEAD TO A SITUATIO N WHERE THERE CAN BE MORE THAN ONE INITIAL ASSESSMENT YEAR WITHIN THE SAID PERIOD OF 10 YEARS. AS PER SUB-SECTION (6), CAP IS ON THE 10 ASSESSMENT YEARS. IT IS NOT ON QUANTUM. WE H AVE ALSO TO KEEP IN MIND THE PURPOSE FOR WHICH SECTION 80-IC WAS ENACTED. THE PURPOSE WA S TO ESTABLISH THE BUSINESS OF THE NATURE SPECIFIED IN THE SAID PROVISION IN THE SPECI FIED STATES. THIS PROVISION WAS, THUS, AIMED AT ENCOURAGING THE UNDERTAKINGS OR ENTERPRISES TO E STABLISH AND SET UP SUCH UNITS IN THE AFORESAID STATES TO MAKE THEM INDUSTRIALLY ADVANCED STATES AS WELL. UNDOUBTEDLY, THESE ARE DIFFICULT STATES AS MOST OF THESE STATES FALL I N HILLY AREAS. THEREFORE, COST OF PRODUCTION AND TRANSPORTATION MAY ALSO GO UP. 20. WHEN WE KEEP IN MIND THESE OBJECTIVES FOR WHICH SECTION 80-IC WAS ENACTED, AN IRRESISTIBLE CONCLUSION WOULD BE TO GRANT 100% DEDU CTION OF THE PROFITS AND GAINS EVEN FROM THE YEAR WHEN THERE IS SUBSTANTIAL EXPANSION IN THE EXISTING UNIT. AFTER ALL, THIS SUBSTANTIAL EXPANSION INVOLVES GREAT DEAL OF INVESTMENT WHICH H AS TO BE, AT LEAST 50% IN THE PLANT AND MACHINERY, OF THE BOOK VALUE THEREOF BEFORE TAKING DEPRECIATION IN ANY YEAR. WITH AN EXPANSION OF SUCH A NATURE NOT ONLY THERE WOULD BE INCREASE IN PRODUCTION BUT GENERATION OF MORE EMPLOYMENT AS WELL, WHICH WOULD BENEFIT THE LOCAL POPULACE. IT IS FOR THIS REASON, CARRYING OUT SUBSTANTIAL EXPANSION BY ITSELF IS TRE ATED AS INITIAL ASSESSMENT YEAR. IT WOULD 5 MEAN THAT EVEN WHEN AN OLD UNIT COMPLETES SUBSTANTI AL EXPANSION, SUCH A UNIT ALSO BECOMES ENTITLED TO AVAIL THE BENEFIT OF SECTION 80 -IC. IF THAT IS THE PURPOSE OF THE LEGISLATURE, WE SEE NO REASON AS TO WHY 100% DEDUCT ION OF THE PROFITS AND GAINS BE NOT ALLOWED TO EVEN THOSE UNITS WHO HAD AVAILED THIS DE DUCTION ON SETTING UP OF A NEW UNIT AND HAVE NOW INVESTED HUGE AMOUNT WITH SUBSTANTIAL EXPANSION OF THOSE UNITS. 9. THE HON'BLE APEX COURT THEREAFTER CONCLUDED THAT A NEWLY SET UP UNDERTAKING OR ENTERPRISE IN THE STATE OF HIMACHAL PRADESH WOULD BE ENTITLED TO DEDUCTION @ 100% OF THE ACT ITS PROFITS FOR THE FIR ST FIVE YEARS AND EVEN THEREAFTER IN THE CASE OF SUBSTANTIAL EXPANSION IS CARRIED OUT BY IT, WITH THE PREVIOUS YEAR IN WHICH SUBSTANTIAL EXPANSION IS UNDERTAKEN BECOMING THE INITIAL ASSESSMENT YEAR. THAT IN ANY CASE THE PERIOD OF DEDUCTION U/S 80IC O F THE ACT WOULD NOT EXCEED 10 YEARS. THAT THE DECISION IN THE CLASSIC BINDING (SUPRA) DID NOT LAY DOWN THE CORRECT LAW. THE CONCLUSION OF THE HON'BLE APEX COU RT AT PARA 24 OF ITS ORDER IS AS UNDER: 24. THE AFORESAID DISCUSSION LEADS US TO THE FOLLO WING CONCLUSIONS: (A) JUDGMENT DATED 20TH AUGUST, 2018 IN CLASSIC BINDINGINDUSTRIES CASE OMITTED TO TAKE NOTE OF THE DEFINITION INITIAL ASSESSMENT YEAR CO NTAINED IN SECTION 80-IC ITSELF AND INSTEAD BASED ITS CONCLUSION ON THE DEFINITION CONTAINED IN SECTION 80-IB, WHICH DOES NOT APPLY IN THESE CASES. THE DEFINITIONS OF INITIAL ASSESSMENT YEAR IN THE TWO SECTIONS, VIZ. SECTIONS 80-IB AND 80-IC ARE MATERIALLY DIFFERENT. THE DEFINITION OF INITIAL ASSESSMENT YEAR UNDER SECTION 80-IC HAS MADE ALL THE DIFFERENCE. THEREFORE, WE AR E OF THE OPINION THAT THE AFORESAID JUDGMENT DOES NOT LAY DOWN THE CORRECT LAW. (B) AN UNDERTAKING OR AN ENTERPRISE WHICH HAD SET U P A NEW UNIT BETWEEN 7TH JANUARY, 2003 AND 1ST APRIL, 2012 IN STATE OF HIMACHALPRADE SH OF THE NATURE MENTIONED IN CLAUSE (II) OF SUB-SECTION (2) OF SECTION 80-IC, WOULD BE ENTIT LED TO DEDUCTION AT THE RATE OF 100% OF THE PROFITS AND GAINS FOR FIVE ASSESSMENT YEARS COM MENCING WITH THE INITIAL ASSESSMENT YEAR. FOR THE NEXT FIVE YEARS, THE ADMISSIBLE DEDU CTION WOULD BE 25% (OR 30% WHERE THE ASSESSEE IS A COMPANY) OF THE PROFITS AND GAINS. (C) HOWEVER, IN CASE SUBSTANTIAL EXPANSION IS CARRI ED OUT AS DEFINED IN CLAUSE (IX) OF SUB- SECTION (8) OF SECTION 80-IC BY SUCH AN UNDERTAKING OR ENTERPRISE, WITHIN THE AFORESAID PERIOD OF 10 YEARS, THE SAID PREVIOUS YEAR IN WHICH THE SUBSTANTIAL EXPANSION IS UNDERTAKEN WOULD BECOME INITIAL ASSESSMENT YEAR, AND FROM TH AT ASSESSMENT YEAR THE ASSESSEE SHALL BEEN ENTITLED TO 100% DEDUCTIONS OF THE PROFITS AND GAINS. (D) SUCH DEDUCTION, HOWEVER, WOULD BE FOR A TOTAL P ERIOD OF 10 YEARS, AS PROVIDED IN SUB- SECTION (6). FOR EXAMPLE, IF THE EXPANSION IS CARRI ED OUT IMMEDIATELY, ON THE COMPLETION OF FIRST FIVE YEARS, THE ASSESSEE WOULD BE ENTITLED TO 100% DEDUCTION AGAIN FOR THE NEXT FIVEYEARS. ON THE OTHER HAND, IF SUBSTANTIAL EXPANS ION IS UNDERTAKEN, SAY, IN 8TH YEAR BY AN ASSESSEE SUCH AN ASSESSEE WOULD BE ENTITLED TO 100% DEDUCTION FOR THE FIRST FIVE YEARS, DEDUCTION @ 25% OF THE PROFITS AND GAINS FOR THE NE XT TWO YEARS AND @ 100% AGAIN FROM 8 TH YEAR AS THIS YEAR BECOMES INITIAL ASSESSMENT YEAR ONCE AGAIN HOWEVER, THIS 100% DEDUCTION WOULD BE FOR REMAINING THREE YEARS, I.E., 8TH, 9TH AND 10TH ASSESSMENT YEARS. 25. IN VIEW OF THE AFORESAID, WE AFFIRM THE JUDGMEN T OF THE HIGH COURT ON THIS ISSUE AND DISMISS ALL THESE APPEALS OF THE REVENUE. LIKEWISE, APPEALS FILED BY THE ASSESSEES ARE HEREBY ALLOWED. 10. IN VIEW OF THE ABOVE, IT IS NOW SETTLED LAW TH AT EVEN A NEW UNDERTAKING, WHICH HAS CLAIMED DEDUCTION OF ITS ELIGIBLE PROFITS @ 100% THEREOF FOR THE FIRST FIVE YEARS, IS ENTITLED TO CLAIM DEDUCTION @ 100% OF ITS PROFITS THEREAFTER ON ACCOUNT OF SUBSTANTIAL EXPANSION UNDERTAKEN BY IT. 11. SINCE IN THE PRESENT CASE, THE FACT THAT THE AS SESSEE HAD UNDERTAKEN SUBSTANTIAL EXPANSION IN A.Y. 2010-11 ,IS NOT DISP UTED, THE ASSESSEE, WE HOLD, IS 6 ENTITLED TO CLAIM DEDUCTION @ 100% OF ITS ELIGIBLE PROFITS EVEN IF IT HAS ALREADY CLAIMED DEDUCTION OF ITS PROFITS AT THE SAID RATE F OR FIVE YEARS, IN VIEW OF THE LAW LAID DOWN BY THE APEX COURT IN THIS REGARD IN ITS D ECISION IN THE CASE OF M/S AARHAM SOFTRONICS(SUPRA). 12. WE, THEREFORE, UPHOLD THE ORDER OF THE LD.CIT(A ) ON MERITS. ALL THE APPEALS OF THE REVENUE,CHALLENGING THE ORDER OF THE LD.CIT( A) ON MERITS ARE THEREFORE DISMISSED. 13. NOW TAKING UP THE ASSESSEES APPEALS AGAINST TH E ACTION OF THE LD. CIT(A) IN NOT DISPOSING OFF THE LEGAL GROUND RAISED BY IT, CHALLENGING THE VALIDITY OF ASSESSMENT FRAMED UNDER SECTION 147 OF THE ACT, THE LD. COUNSEL FOR THE ASSESSEE STATED THAT IT DO NOT WISH TO PRESS THE GR OUNDS RAISED. IN VIEW OF THE SAME, THE GROUNDS RAISED BY THE ASSE SSEE ARE DISMISSED AS NOT PRESSED. WE MAY ADD THAT OUR THIS DECISION SHA LL HAVE NO BEARING AND SHALL NOT ACT AS PRECEDENT FOR ANY SUCH IDENTICAL GROUND OR ISSUE IF RAISED BY THE ASSESSEE IN OTHER YEARS. 14. IN THE RESULT ALL THE APPEALS OF THE ASSESSEE A RE DISMISSED. 15. IN EFFECT ALL THE CROSS APPEALS, BOTH OF THE AS SESSEE AND THE REVENUE, ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (DIVA SINGH) (ANNAPURN A GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 08/04/2019 AG COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR