Shri Subhash Chand, Chandigarh V. ACIT, Chandigarh

ITA 892/CHANDI/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7019 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2013-2014
• Appeal Filed On: 31-05-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO.892/CHD/2017 (ASSESSMENT YEAR : 2013-14) SHRI SUBHASH CHAND, VS. THE A.C.I.T., SCF: 12, SECTOR 26, CIRCLE-5(1), CHANDIGARH. CHANDIGARH. PAN: ABUPC8069N (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI TEJ MOHAN SINGH RESPONDENT BY : NONE DATE OF HEARING : 24.07.2017 DATE OF PRONOUNCEMENT : 01.08.2017 O R D E R PER ANNAPURNA GUPTA, A.M . : THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINS T THE ORDER OF LD.CIT(APPEALS)-2, CHANDIGARH DATED 21 .3.2017 RELATING TO ASSESSMENT YEAR 2013-14. 2. AT THE OUTSET IT MAY BE POINTED OUT THAT NONE APPEARED ON BEHALF OF THE REVENUE ON THE DATE OF HE ARING. A LETTER COMMUNICATING THE REASON FOR NON-APPEARANC E OF ANY REPRESENTATIVE OF THE REVENUE ON THE SAID DATE WAS FILED BEFORE US. AS PER THE SAID COMMUNICATION CELEBRATIO N OF INCOME TAX DAY WAS STATED TO BE THE REASON FOR NON APPEARANCE. SINCE THE SAID REASON DID NOT FIND FAVO UR WITH THE BENCH FOR ADJOURNING THE CASE, THE HEARING WAS PROCEEDED WITH. 2 3. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS O F APPEAL: 1. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEAL S) HAS ERRED IN LAW AS WELL AS ON FACTS IN UPHOLDING THE REDUCTION OF DEDUCTION UNDER SECTION 80IC OF THE ACT TO 25% AS AGAINST 100% CLAIMED AS THE ASSESSEE HAS ADMITTEDLY CARRIED OUT SUBSTANTIAL EXPANSION WHICH MAKES THE UNIT ELIGIBLE FOR DEDUCTION @ 100% AND AS SUCH NON ALLOWANCE OF DEDUCTION AT 100% IS ILLEGAL, ARBITRARY AND UNJUSTIFIED. 2. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS FAILED TO CONSTRUE THE BENEVOLENT PROVISIONS AS ENACTED IN CHAPTER VI OF THE ACT IN A HARMONIOUS AND LIBERAL MANNER ESPECIALLY WHEN THERE ARE DECISIONS OF VARIOUS COURTS IN FAVOUR OF THE ASSESSEE AND AS SUCH UPHOLDING OF THE ASSESSMENT ORDER IS ARBITRARY AND UNJUSTIFIED. 3. THAT THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IS ERRONEOUS, ARBITRARY, OPPOSED TO LAW AND FACTS OF THE CASE AND IS, THUS, UNTENABLE. 4. BRIEF FACTS RELEVANT TO THE CASE ARE THAT ASSES SEE HAD CLAIMED DEDUCTION U/S 80IC OF THE INCOME TAX AC T, 1961, (HEREINAFTER REFER TO AS 'ACT') AMOUNTING TO RS.1,51,43,656/- @ 100% OF THE ELIGIBLE PROFITS. IN THIS CASE, THE INDUSTRIAL UNDERTAKING OF THE ASSESSEE CO MMENCED OPERATION/ACTIVITY ON 10.7.2007 AND THE INITIAL ASS ESSMENT YEAR IS 2008-09. THE ASSESSEE HAS CLAIMED 100% DED UCTION FROM THE PROFITS DURING FIRST FIVE ASSESSMENT YEARS . IN THE RELEVANT YEAR UNDER CONSIDERATION I.E. SIXTH YEAR F ROM COMMENCEMENT OF THE PRODUCTION, THE ASSESSEE HAD AG AIN CLAIMED DEDUCTION U/S 801C OF THE ACT, @ 100% FROM THE ELIGIBLE PROFITS CLAIMING THAT SUBSTANTIAL EXPANSIO N OF THE UNDERTAKING WAS CARRIED OUT DURING THE ASSESSMENT Y EAR 2012-13. THE ASSESSEE RELIED UPON THE JUDGMENT OF T HE HON'BLE ITAT, DELHI IN THE CASE OF TIRUPATI LPG IND USTRIES 3 LTD. VS. DCIT (45 TAXMANN.COM 326) TO INTERPRET THE TERM SUBSTANTIAL EXPANSION' AND 'INITIAL ASSESSMENT YEA R'. THE ASSESSING OFFICER HAS ELABORATELY DISCUSSED THE ISS UE IN THE ASSESSMENT ORDER AND DISTINGUISHING THE JUDGMENT IN THE CASE OF TIRUPATI INDUSTRIES LTD., RESTRICTED THE CL AIM OF DEDUCTION TO THE EXTENT OF 25% IN THE RELEVANT ASSE SSMENT YEAR BEING SIXTH ASSESSMENT YEAR FROM THE INITIAL ASSESSMENT YEAR 2008-09 FOLLOWING THE DECISION OF T HE HON'BLE ITAT CHANDIGARH BENCH IN THE CASE OF HYCRON ELECTRONICS VS ITO, BADDI IN ITA NO.798/CHD/2012. 5. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER THE MATTER WAS CARRIED BEFORE THE LD.CIT(APPEALS), WHO DISMISSED THE ASSESSEES APPEAL HOLDING THAT IT WAS SQUARELY COVERED BY THE DECISION OF THE ITAT CHANDI GARH BENCH IN CASE OF HYCRON ELECTRONICS (SUPRA). 6. BEFORE US LD.COUNSEL RELIED UPON THE SUBMISSION S MADE BEFORE THE AO AND CIT(A). 7. WE HAVE HEARD THE CONTENTIONS OF LD. COUNSEL FO R ASSESSEE. WE FIND NO REASON TO INTERFERE IN THE O RDER OF THE LD.CIT(APPEALS) WHO HAS RESTRICTED THE DEDUCTION CL AIMED U/S 80IC OF THE ACT TO THE EXTENT OF 25% OF THE ELI GIBLE PROFITS FOLLOWING THE DECISION OF THE ITAT CHANDIGA RH BENCH IN THE CASE OF HYCRON ELECTRONICS (SUPRA). UNDISPU TEDLY THE ASSESSEE IS ELIGIBLE TO CLAIM DEDUCTION U/S 80IC OF THE ACT AND HAS CLAIMED THE SAID DEDUCTION FOR FIVE YEARS A LREADY. ALSO IT IS NOT DISPUTED THAT THE ASSESSEE UNDERTAKI NG IS A NEW UNDERTAKING HAVING COME INTO EXISTENCE AFTER SE CTION 4 80IC WAS BROUGHT ON THE STATUTE I.E 01-04-2004. FUR THER THE ASSESSEE IS CLAIMING 100% DEDUCTION OF ITS PROF ITS IN THE IMPUGNED YEAR BEING THE SIXTH YEAR, ON ACCOUNT OF H AVING UNDERTAKEN SUBSTANTIAL EXPANSION. THE ITAT CHANDIG ARH BENCH HAS CLEARLY HELD IN THE CASE OF HYCRON ELECTR ONICS (SUPRA) THAT NEW UNDERTAKINGS ARE NOT ENTITLED TO C LAIM 100% DEDUCTION OF PROFITS ON ACCOUNT OF SUBSTANTIAL EXPANSION UNDERTAKEN. IT HAS ALSO HELD THAT AS PER SECTION 80 IC, ELIGIBLE UNITS IN THE STATE OF HIMACHAL PRA DESH ARE ENTITLED TO DEDUCTION @ 100% OF THE PROFITS ONLY FO R FIRST FIVE YEARS SINCE COMMENCEMENT OF BUSINESS AND NOT THEREA FTER. THE LD. COUNSEL FOR ASSESSEE HAS NOT BROUGHT TO OUR NOTICE ANY DISTINGUISHING FACTS IN THE PRESENT CASE. IN V IEW OF THE SAME, WE SEE NO REASON TO INTERFERE IN THE ORDER O F THE LD.CIT(APPEALS) WHICH IS HEREBY UPHELD AND THE APPE AL OF THE ASSESSEE ON THIS COUNT IS DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (SANJAY GARG) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 1 ST AUGUST, 2017 *RATI* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE DR ASSISTANT REGISTRAR, ITAT, CHANDIGARH