M/s UPS Invertor.Com, Parwanoo V. DCIT, Parwanoo

ITA 870/CHANDI/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6581 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2013-2014
• Appeal Filed On: 26-05-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCHB, CHANDIGARH BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND DR. B.R.R. KUMAR, ACCOUNTANT MEMBER ITA NO.870/CHD/2017 (ASSESSMENT YEAR : 2013-14) UPS INVERTOR. COM VS. DCIT VILLAGE NARYAL, SECTOR-4 CIRCLE, PARWANOO PARWANOO PAN: AABFU7064R (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI MANOJ KUMAR (C.A) DEPARTMENT BY : SHRI. MANJIT SINGH (SR. DR) DATE OF HEARING : 27.09.2017 DATE OF PRONOUNCEMENT : 23/11/2017 O R D E R PER DR.B.R.R.KUMAR, A.M . : THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS), SHIMLA, DATED 28/04/2017. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE LD. CIT(A) IS WRONG IN DISALLOWING THE BENE FIT OF SUBSTANTIAL EXPANSION U/S 80IC AND CONFIRMING THE DEDUCTION U/S 80IC ONLY TO THE EXTENT OF 25% AS AGAINST 100% BY HOLDING THAT BENEFIT OF SUBSTANTIAL EXPANSI ON IS ALLOWABLE ONLY TO THE UNDERTAKING WHICH WERE EXISTING AS ON 07/01/2013. 2. IN VIEW OF ABOVE & SUCH OTHER GROUNDS, WHICH MAY BE TAKEN AT THE TIME OF HEARING, THE APPEAL MAY PLEASE BE ALLOWED & JUSTICE RENDERED. 3. THE ISSUE INVOLVED IN THE PRESENT APPEAL PERTAIN S TO RESTRICTION OF DEDUCTION, CLAIMED UNDER SECTION 80IC AT THE RATE O F 100% ON ACCOUNT OF SUBSTANTIAL EXPANSION UNDERTAKEN. 2 4. BRIEF FACTS RELEVANT TO THE CASE ARE THAT THE AS SESSEE STARTED ITS MANUFACTURING ACTIVITY/OPERATION ON 03/02/2005 AND INITIAL ASSESSMENT YEAR FOR CLAIM OF DEDUCTION U/S 80IC OF THE ACT WAS A.Y. 200 506. THE ASSESSEE CLAIMED DEDUCTION U/S 80 IC TO THE EXTENT OF 100% OF THE EL IGIBLE PROFITS FOR 5 YEARS PERIOD STARTING FROM A.Y.200506 TO A.Y. 200910. DURING A SSESSMENT PROCEEDINGS FOR THE IMPUGNED YEAR THE AO NOTICED THAT THE ASSESSEE FIRM HAD AGAIN CLAIMED HUNDRED PERCENT DEDUCTION OF ITS ELIGIBLE PROFITS ON ACCOUNT OF HAVING CARRIED OUT SUBSTANTIAL EXPANSION IN A . Y. 200910. THE ASSESSING OFFICER, FOR DETAILED REASONS MENTIONED IN THE ASSESSMENT ORDER ,HELD THA T THE ASSESSEE WAS ELIGIBLE FOR DEDUCTION U/S 80IC ONLY AT THE RATE OF 25% AS AGAINST THE CLAIM OF 100% MADE BY THE ASSESSEE. 5. THE MATTER WAS CARRIED IN APPEAL BEFORE THE LD. CIT(APPEAL) WHO DISMISSED THE ASSESSEES APPEAL AND RESTRICTED THE DEDUCTION CLAIMED TO 25% OF THE PROFITS, RELYING UPON THE JUDGEMENT OF THE CHAN DIGARH BENCH OF THE ITAT IN THE CASE OF M/S HYCRON ELECTRONICS VS ITO IN ITA NO . 798/CHD/2012 AND OTHER RELATED CASES. 6. AGGRIEVED BY THE SAME THE ASSESSEE HAS NOW COME UP IN APPEAL BEFORE US. 7. DURING THE COURSE OF HEARING BEFORE US, LD. COUN SEL RELIED ON THE SUBMISSIONS MADE BEFORE THE LD. CIT(A) WHILE THE SR . DR ARGUED THAT THE ISSUE WAS COVERED AGAINST THE ASSESSEE BY THE DECISION O F THE CHANDIGARH BENCH OF THE ITAT, IN THE CASE OF M/S HYCRON ELECTRONICS VS ITO IN ITA NO. 798/CHD/2012 AND OTHER RELATED CASES. 8. WE HAVE HEARD BOTH THE PARTIES AND ALSO PERUSED THE ORDERS OF THE AUTHORITIES BELOW. FACTS EMERGING IN THE PRESENT C ASE AND WHICH ARE RELEVANT FOR ADJUDICATING THE ISSUE AT HAND ARE THAT THE ASS ESSEE CAME INTO EXISTENCE 3 AND COMMENCED ITS MANUFACTURING ACTIVITY/OPERATION ON 03.02.2005, WAS ELIGIBLE TO CLAIM DEDUCTION OF 100% OF ITS PROFITS U/S 80IC OF THE INCOME TAX ACT,1961, AND HAD CLAIMED THE SAME FOR FIVE YEARS F ROM A.Y 2005-06 TO A.Y 2009- 10. FURTHER IT IS NOT DISPUTED THAT THE ASSESSEE UN DERTOOK SUBSTANTIAL EXPANSION OF ITS UNDERTAKING IN A.Y. 2010-11 AND ON ACCOUNT OF THE SAME CLAIMED DEDUCTION AGAIN @ 100% OF ITS ELIGIBLE PROFITS WHICH HAS BEEN DENIED TO IT, RESTRICTING THE SAME TO 25% OF THE PROFITS ,WHICH HAS BEEN CHALLE NGED BEFORE US. 9. WE HAVE GONE THROUGH THE ORDER OF THE LD CIT(A) AND FIND NO INFIRMITY IN THE SAME. THE ISSUE OF QUANTUM OF DEDUCTION AVAILAB LE TO NEW UNDERTAKINGS WHICH CAME INTO EXISTENCE AFTER 01.07.2003, AND WHI CH HAVE ALREADY CLAIMED DEDUCTION OF 100% OF THEIR ELIGIBLE PROFITS FOR THE STATUTORILY SPECIFIED PERIOD OF FIVE YEARS, ON SUBSTANTIAL EXPANSION OF THE SAID UN DERTAKING, HAS BEEN DEALT WITH BY THE ITAT CHANDIGARH BENCH IN THE CASE OF M/S HYC RON ELECTRONICS (SUPRA).THE HONBLE BENCH IN THE SAID ORDER, AFTER DEEPLY ANALY ZING THE PROVISIONS OF SECTION 80IC ,HAS CATEGORICALLY HELD THAT THE BENEFIT OF C LAIMING 100% DEDUCTION OF PROFITS ON UNDERTAKING SUBSTANTIAL EXPANSION IS NOT AVAILABLE TO NEW UNDERTAKINGS SET UP AFTER 01.07.2003. IT HAS BEEN CATEGORICALLY HELD BY THE ITAT THAT THERE CAN BE ONLY ONE INITIAL ASSESSMENT YEAR FOR THE PURPOSE OF CLAIMING DEDUCTION @ 100% OF PROFITS U/S 80IC OF THE ACT. IT HAS ALSO B EEN HELD THAT AS PER SECTION 80IC, ELIGIBLE UNDERTAKINGS SET UP IN SPECIFIED AR EAS OF THE STATE OF HIMACHAL PRADESH ARE NOT ENTITLED TO CLAIM DEDUCTION @ 100% OF THE PROFITS BEYOND A PERIOD OF FIVE YEARS. 10. THE LD CIT(A) ,WE FIND HAS CORRECTLY APPRECIATE D THE FACTS OF THE PRESENT CASE AND APPLIED THE AFORESAID DECISION OF THE ITA T TO RESTRICT THE DEDUCTION CLAIMED BY THE ASSESSEE U/S 80IC @ 25% OF THE PROFI TS, SINCE UNDISPUTEDLY THE ASSESSEE COMMENCED BUSINESS OPERATIONS AFTER 01.07. 2003, I.E. ON 03 . 02.2005 AND HAD ALREADY CLAIMED DEDUCTION OF 100% OF ITS PR OFITS FOR FIVE YEARS FROM A.Y 4 2005-06 TO A.Y 2009-10 . THE LD CIT(A) HAS CORRECTLY HELD THAT THE ASSESSEE WAS NOT ENTITLED TO CLAIM DEDUCTION @ 100% OF ITS PROFI TS IN THE IMPUGNED YEAR ON ACCOUNT OF HAVING UNDERTAKEN SUBSTANTIAL EXPANSION IN A . Y 2010-11 IN VIEW OF THE DECISION OF THE CO-ORDINATE BENCH OF ITAT, CHAN DIGARH IN THE CASE OF M/S HYCRON ELECTRONICS (SUPRA). 11. IN VIEW OF THE SAME WE FIND NO MERIT IN THIS GR OUND OF APPEAL RAISED BY THE ASSESSEE AND THE SAME IS THEREFORE DISMISSED. 12. THE APPEAL OF THE ASSESSEE, THEREFORE, STANDS D ISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (DIVA SINGH) (DR. B.R.R. KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 23/11/2017 AG COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE DR