M/s Friends Alloys, Chandigarh V. ACIT, C-4(1), Chandigarh

ITA 84/CHANDI/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5022 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-05-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 30-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUKHWINDER SHARM
• Assessee Lawyers: B K NOHRIA
• Keywords: Opportunity of being heard
• Section: 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH A, CHANDIGARH BEFORE MS. DIVA SINGH, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NOS. 84 & 85/CHD/2018 A.Y.: 2011-12 & 2014-15 M/S FRIENDS ALLOYS, VS. THE ACIT, H.NO. 2906/1,SECTOR 37-C, CIRCLE 4(1), CHANDIGARH. CHANDIGARH. PAN NO. : AABFF1623P (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI B.K.NOHRIA RESPONDENT BY : SMT. SUKHWINDER SHARM, ADDL. CIT DATE OF HEARING : 08.05.2018 DATE OF PRONOUNCEMENT : 11.05.2018 ORDER PER BENCH THE PRESENT APPEALS HAVE BEEN FILED BY THE ASSESSEE A SSAILING THE CORRECTNESS OF THE SEPARATE ORDERS DATED 27.11.2017 PE RTAINING TO 2011- 12 AND 2014-15 ASSESSMENT YEARS ON IDENTICAL GROUNDS. A CCORDINGLY, FOR THE SAKE OF CONVENIENCE, BOTH THE APPEALS ARE BEING DECIDED TOGETHE R. 2. THE RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSE E IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF MANUFACTURING OF STEEL INGOTS , IRON ANGLE, CHANNEL FLATE ETC.THE MANUFACTURING UNIT OF THE ASSESSEE IS AT BADDI (HP ). THE INITIAL ASSESSMENT YEAR FOR CLAIMING DEDUCTION U/S 80IC WAS 2005- 06 ASSESSMENT YEAR. 100% DEDUCTION U/S 80IC FOR FIVE YE ARS STOOD CLAIMED AND GRANTED TO THE ASSESSEE. 2011-12 ASSESSME NT YEAR WAS CONSIDERED TO BE THE 8 TH YEAR WHEREIN CLAIMING SUBSTANTIAL EXPANSION HAVING BEEN CARRIED OUT IN 2010-11 ASSESSMENT YEAR. THE AO RELYING UPON DECISION OF THE ITAT IN ITA 798/CHD/2012 IN THE CAS E OF M/S HYCRON ELECTRONICS V ITO DATED 27.05.2015 RESTRICTED TH E DEDUCTION TO 25% OF THE ELIGIBLE PROFITS. THE SAID VIEW WAS CONFIRMED IN APP EAL BY THE CIT(A). 3. IT WAS COMMON STAND OF THE PARTIES BEFORE THE BENCH THAT THE SUBMISSIONS RAISED IN ITA 84/CHD/2018 WOULD FULLY ADDRESS THE ISSUE IN ITA 85/CHD/2018 AND INFACT THE ISSUE IS FULLY COVERED B Y THE DECISION OF THE JURISDICTIONAL HIGH COURT DATED 28.11.2017 IN THE CA SE OF M/S ITA 84 & 85/CHD/2018 A.Y. 2011-12 & 2014-15 2 STOVE CRAFT INDIA VERSUS CIT-V AND OTHERS IN ITA 20 TO 24/2015 AS THE SOLE ISSUE RAISED BY THE ASSESSEE IN THE RESPECTIVE APPE ALS IS THE CLAIM OF 100% DEDUCTION OF ELIGIBLE PROFITS U/S 80-IC ON THE GROUND THAT SUBSTANTIAL EXPANSION HAS BEEN CARRIED OUT IN 2010-11 ASSESSMENT YEAR. 4. THE LD. AR RELYING UPON THE ORDER OF THE CO-ORDINATE BENCH DATED 24.01.2018 IN ITA 9/CHD/2018 SUBMITTED THAT THE INTERVEN ING YEAR I.E. 2013-14 HAS COME UP BEFORE THE ITAT WHEREIN THE IDENTIC AL ISSUE HAS BEEN CONSIDERED BY THE CO-ORDINATE BENCH AND HAS BEEN REMANDED TO THE AO WITH THE FOLLOWING DIRECTION : 7. IN VIEW OF THE ABOVE DISCUSSION, THE IMPUGNED ORDER OFF THE CIT(A) IS SET ASIDE AND THE AO IS DIRECTED TO G RANT TO THE ASSESSEES DEDUCTION AT THE RATE OF HUNDRED PERCENT OF ITS ELIGIBLE PROFITS, AS PER THE RULING OF THE JURISDICTIONAL HIGH COURT IN THIS REGARD IN THE CASE OF 'M/S STOVEKRAFT INDIA VS. COMMISSIONER OF INCOME T AX' (SUPRA). 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE NOTE THAT JURISDICTIONAL HIGH COURT IN PARA 55 IN THE SAID DECISION HAS SETTLED THE CONTROVERSY HOLDI NG AS UNDER : 55. THUS, IN VIEW OF THE ABOVE DISCUSSION, THESE APPEAL S ARE ALLOWED AND ORDERS PASSED BY THE ASSESSMENT OFFICER AS WELL AS THE APPELLATE AUTHORITY AND THE TRIBUNAL IN THE CASE OF EACH ONE OF THE ASS ESSEES, ARE QUASHED AND SET ASIDE, HOLDING AS UNDER: (A) SUCH OF THOSE UNDERTAKINGS OR ENTERPRISES WHICH WER E ESTABLISHED, BECAME OPERATIONAL AND FUNCTIONAL PRIOR TO 07/01/20 03 AND HAVE UNDERTAKEN SUBSTANTIAL EXPANSION BETWEEN 07/01/2003 UPTO 01/04 /2012, SHOULD BE ENTITLED TO BENEFIT OF SECTION 80-IC OF THE ACT, FO R THE PERIOD FOR WHICH THEY WERE NOT ENTITLED TO THE BENEFIT OF DEDUCTION UNDER SECTION 80-IB. (B) SUCH OF THOSE UNITS WHICH HAVE COMMENCED PRODUCTION AFTER 07/01/2003 AND CARRIED OUT SUBSTANTIAL EXPANSION PRIOR TO 01/0 4/2012, WOULD ALSO BE ENTITLED TO BENEFIT OF DEDUCTION AT DIFFERENT RATES OF PERCENTAGE STIPULATED UNDER SECTION 80-IC. (C) SUBSTANTIAL EXPANSION CANNOT BE CONFINED TO ONE EXP ANSION. AS LONG AS REQUIREMENT OF SECTION 80-IC (8) (IX) IS MET, TH ERE CAN BE NUMBER OF MULTIPLE SUBSTANTIAL EXPANSIONS. (D) CORRESPONDINGLY, THERE CAN BE MORE THAN ONE INITIAL ASSESSMENT YEARS. (E) WITHIN THE WINDOW PERIOD OF 07/01/2013 UPTO 01/04/2 012, AN UNDERTAKING OR AN ENTERPRISE CAN BE ENTITLED TO DEDUCTION @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 SHALL NOT BE ENTITLED TO DEDUCTION UNDER ANY OTHER SECTION, CONT AINED IN CHAPTER VI-A OR SECTION 10A OR 10B OF THE ACT [SECTION 80-IB(5)]. 6. ACCORDINGLY, IN THE LIGHT OF THE DECISION OF THE CO-ORDINATE BENCH IN THE CASE OF THE ASSESSEE ITSELF, THE ISSUE IS REMAN DED TO THE AO TO GRANT NECESSARY RELIEF IN ACCORDANCE WITH LAW AS PER THE RULING OF THE ITA 84 & 85/CHD/2018 A.Y. 2011-12 & 2014-15 3 JURISDICTIONAL HIGH COURT. SAID ORDER WAS PRONOUNC ED IN THE OPEN COURT AT THE TIME OF HEARING ITSELF. 7. SIMILARLY IN ITA 85/CHD/2018, SINCE THE SOLE ISS UE RAISED IS CLAIM OF 100% DEDUCTION U/S 80IC AND THE YEAR BEING 9 TH YEAR, THE ISSUE IS REMANDED WITH THE AFORESAID DIRECTIONS BACK TO THE AO TO GRANT NECESSARY RELIEF IN ACCORDANCE WITH LAW. NEEDLESS TO SAY THA T THE ASSESSEE SHALL BE AFFORDED A REASONABLE OPPORTUNITY OF BEING HEARD. 8. IN THE RESULT, BOTH APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 11. 05.2018. SD/- SD/- (ANNAPURNA GUPTA) (DIVA SIN GH) ACCOUNTANT MEMBER JUDICIAL MEMBER POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR ASSTT. REGISTRAR ITAT CHANDIGARH