M/s Swastik Wire Product, Baddi V. DCIT, Parwanoo

ITA 988/CHANDI/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8301 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-02-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Next Hearing Date: 22-02-2017
• Assessment Year: 2013-2014
• Appeal Filed On: 14-09-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Assessee Lawyers: B M MONGA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE MS. DIVA SINGH, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO.994/CHD/2016 (ASSESSMENT YEAR : 2013-14) M/S GMH ORGANICS HOUSE NO.118, VS. THE A.C.I.T., MDC, SECTOR 5, PANCHKULA CIRCLE, PANCHKULA. PANCHKULA. PAN: AAGFG9690N (APPELLANT) (RESPONDENT) APPELLANT BY : S/SHRI B.M. MONGA & ROHIT KAURA RESPONDENT BY : SHRI MANJIT SINGH, SR.DR ITA NO.988/CHD/2016 (ASSESSMENT YEAR : 2013-14) M/S SWASTIK WIRE PRODUCT, VS. THE D.C.I.T., PLOT NO.65A-65B, CIRCLE PARWANOO, H.P. EPIP JHARMMAJRI, PHASE-I, BADDI, H.P. PAN: ABGFS3429J (APPELLANT) (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY : SHRI MANJIT SINGH, SR.DR ITA NO.989/CHD/2016 (ASSESSMENT YEAR : 2013-14) M/S YASH INTERNATIONAL, VS. THE D.C.I.T., PLOT NO.3, VILLAGE-KATHA, CIRCLE PARWANOO, H.P. BEHIND COCA COLA FACTORY, BADDI, H.P. PAN: AAAFY5823B (APPELLANT) (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY : SHRI MANJIT SINGH, SR.DR 2 ITA NO.991/CHD/2016 (ASSESSMENT YEAR : 2013-14) M/S ARION HEALTHCARE, VS. THE D.C.I.T., SCO 907, MANIMAJRA, CIRCLE 3(1), CHANDIGARH. CHANDIGARH. BADDI, H.P. PAN: AALFA7634D (APPELLANT) (RESPONDENT) APPELLANT BY : S/SHRI B.M. MONGA & ROHIT KAURA RESPONDENT BY : SHRI MANJIT SINGH, SR.DR ITA NO.995/CHD/2016 (ASSESSMENT YEAR : 2011-12) & ITA NO.996/CHD/2016 (ASSESSMENT YEAR : 2012-13) M/S R.H. LABORATORIES, VS. THE J.C.I.T., OPP.WEGH BRIDGE SOLAN RANGE, VILL.GONDPUR, PAONTA SAHIB, SOLAN (H.P.) DISTT. SIRMOUR. PAN: AAIFR3825L (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAJIV SACHDEVA RESPONDENT BY : SHRI MANJIT SINGH, SR.DR ITA NO.1450/CHD/2016 (ASSESSMENT YEAR : 2013-14) BHUPINDER KAUR, VS. THE D.C.I.T., PROP.M/S P.A.PINIONS, CIRCLE SHIMLA, H.P. KASAULI ROAD, DHARAMPUR, DISTT. SOLAN. BADDI, H.P. PAN: AASPP4053G (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SACHIN JAIN RESPONDENT BY : SHRI MANJIT SINGH, SR.DR 3 ITA NO.1457/CHD/2016 (ASSESSMENT YEAR : 2012-13) & ITA NO.1458/CHD/2016 (ASSESSMENT YEAR : 2013-14) M/S MICROPET INDUSTRIES, VS. THE D.C.I.T., VILLAGE OGLI, NAHAN ROAD, CIRCLE SHIMLA, H.P. KALA AMB, TEHSIL NAHAN, DISTT. SIRMOUR, HIMACHAL PRADESH. PAN: AAMFM5828L (APPELLANT) (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY : SHRI MANJIT SINGH, SR.DR DATE OF HEARING : 22.02.2017 DATE OF PRONOUNCEMENT : 23.02.2017 O R D E R PER BENCH : THIS BUNCH OF NINE APPEALS FILED BY THE DIFFERENT ASSESSEES ARE DIRECTED AGAINST SEPARATE ORDERS OF COMMISSIONER OF INCOME TAX (APPEALS) PERTAINING TO DIFFERENT ASSESSMENT YEARS. SINCE THE ISSUE INVOLV ED IN ALL THE APPEALS IS IDENTICAL, THEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS COMMON ORDER. WE SHALL BE DEALING WITH THE FACTS IN ITA NO.994/CHD/2016. ITA NO.994/CHD/2016 : 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUND O F APPEAL: 1. THAT THE LEARNED CIT(A), IS NOT JUSTIFIED IN NO T ALLOWING THE 100% DEDUCTION BY NOT ACCEPTING THE YEAR OF 'SUBSTA NTIAL EXPANSION' AS 'INITIAL YEAR' THUS NOT INTERPRETING THE 4 PROVISIONS OF SECTION 80-IC IN ITS TRUE AND LIBERAL SPIRIT BEING AN INCENTIVE PROVISION. 2. THAT THE LEARNED CIT(A), IS NOT JUSTIFIED IN MIS CONSTRUING THE PROVISIONS OF SECTION 80-IC OF THE INCOME TAX ACT B Y NOT FOLLOWING OR DISTINGUISHING THE JUDGMENT OF HON'BLE DELHI TRIBUNA LIN THE CASE OF TIRUPATI LPG INDUSTRIES LTD. NEW DELHI VS. DCIT, DEHRADUN. 3. THAT LEARNED CIT(A) IS UNJUSTIFIED BY NOT FOLLOW ING THE LAW LAID DOWN BY THE HON'BLE SUPREME COURT OF INDIA IN THE CASE OF CIT VS. VEGETABLE PRODUCTS LTD., [1973] 88 ITR 192 (SC) THAT VF TWO REASONABLE CONSTRUCTIONS OF A TAXING PROVISION ARE POSSIBLE, THAT CONSTRUCTION WHICH FAV OURS THE ASSESSEE MUST BE ADOPTED'. 4. THAT LEARNED ASSESSING OFFICER AND CIT(A) ARE UN JUSTIFIED BY NOT GIVING THE BENEFIT OF DOCTRINE OF 'PROMISSOR Y ESTOPPEL' ENSHRINED UNDER THE 'CONSTITUTION OF INDIA' AS WORT HY CIT, SHIMLA HAD MADE A CLEAR AND UNEQUIVOCAL PROMISE AND /OR ASSURANCE OF 100% DEDUCTION FOR FURTHER 5 YEARS AFT ER 'SUBSTANTIAL EXPANSION' IN THE CASE OF OTHER SIMILA R ASSESSEES AS THERE IS NO BAR FOR REFIXING THE 'INITIAL YEAR' IN THE STATUE. 5. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROUNDS OF APPEAL BEFORE THE APPEAL IS FINALLY HEARD AND DI SPOSED OFF. 3. BRIEF FACTS RELATING TO THE ISSUE ARE THAT DURI NG ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAD CLAIMED DEDUCTION U/S 80IC OF THE ACT OF 100% OF THE PROFITS FOR THE YEAR UNDER CONSIDERATIO N, WHICH WAS THE 6 TH YEAR AFTER COMMENCEMENT OF THE ELIGIBLE BUSINESS UNIT. THE ASSESSING OFFICER NOTED THAT AS PER THE INFORMATION GIVEN IN FORM NO.10CCB BY THE ASSES SEE, IT HAD STARTED ITS BUSINESS ACTIVITIES/OPERATION IN OCTOBER, 5 2007 AND INITIAL ASSESSMENT YEAR FOR CLAIM OF DEDUC TION U/S 80IC OF THE ACT WAS ASSESSMENT YEAR 2008-09. HOWEVER, AFTER UNDERTAKING SUBSTANTIAL EXPANSION DU RING THE FINANCIAL YEAR 2011-12, BY WAY OF ADDITION TO T HE PLANT AND MACHINERY, THE ASSESSEE FIRM HAD AGAIN STARTED CLAIMING DEDUCTION OF 100% OF THE PROFITS U/S 80IC OF THE ACT, CLAIMING ASSESSMENT YEAR 2012-13 AS THE INITIA L ASSESSMENT YEAR. THE ASSESSING OFFICER ALSO OBSERV ED THAT THE ASSESSEE FIRM HAD ALREADY CLAIMED DEDUCTION U/S 80IC TO THE EXTENT OF 100% OF ELIGIBLE PROFITS FOR FIVE YEARS FROM ASSESSMENT YEAR 2008-09 TO 2012-13. HOWEVER, IN TH E IMPUGNED ASSESSMENT YEAR THE ASSESSEE HAD AGAIN CLA IMED 100% DEDUCTION OF ITS ELIGIBLE PROFITS ON ACCOUNT O F UNDERTAKING SUBSTANTIAL EXPANSION DURING THE FINANC IAL YEAR 2011-12. THE ASSESSING OFFICER THEREAFTER EXA MINED THE APPLICABILITY OF PROVISIONS OF SECTION 80IC OF THE ACT ON SUBSTANTIAL EXPANSION AND AFTER ELABORATING ON I NITIAL ASSESSMENT YEAR, SUBSTANTIAL EXPANSION AND AVAILABL E DEDUCTION U/S 80IC OF THE ACT CONCLUDED THAT THE B ENEFIT OF SUBSTANTIAL EXPANSION IS AVAILABLE ONLY TO THE E XISTING UNIT I.E. THE UNITS THAT EXISTED AND WERE OPERATION AS ON 7.1.2003 AND THAT IT IS NOT MEANT FOR UNITS THAT CA ME INTO BEING OR AFTER THE INTRODUCTION OF THE SCHEME. ACCORDINGLY, THE ASSESSING OFFICER ALLOWED DEDUCTIO N U/S 80IC TO THE EXTENT OF 25% OF THE ELIGIBLE PROFITS F OR THE IMPUGNED ASSESSMENT YEAR AND THE EXCESS CLAIM OF DEDUCTION AMOUNTING TO RS.97,18,856/- WAS DISALLOWE D AND ADDED TO THE TAXABLE INCOME OF THE ASSESSEE. 6 4. THE LD. CIT (APPEALS) UPHELD THE ORDER OF THE ASSESSING OFFICER FOLLOWING THE DECISION OF THE I.T .A.T., CHANDIGARH BENCH IN THE CASE OF HYCRON ELECTRONICS VS. ITO , IN ITA NO.798/CHD/2012 DATED 27.5.2015. 5. AGGRIEVED BY THE SAME, THE ASSESSEE HAS NOW COME UP IN APPEAL BEFORE US. DURING THE COURSE OF HEARING BEFORE US, IT WAS FAIRLY CONCEDED BY THE LD . COUNSEL FOR THE ASSESSEE THAT THE ISSUE WAS COVERED AGAINST THE ASSESSEE BY THE ORDER OF THE I.T.A.T., CHANDIGARH BENCH IN THE CASE OF HYCRON ELECTRONICS (SUPRA), THOUGH CONTESTED BEFORE THE HIGH COURT. 6. CONSIDERING THE ABOVE FACT WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT (APPEALS) RESTRICTING T HE DEDUCTION CLAIMED BY THE ASSESSEE TO 25% OF THE ELI GIBLE PROFITS FOLLOWING THE DECISION OF THE I.T.A.T., CHA NDIGARH BENCH IN THE CASE OF HYCRON ELECTRONICS (SUPRA). T HE I.T.A.T. IN THE SAID CASE, WE FIND, DISCUSSED AND A NALYSED THE PROVISIONS OF SECTION 80IC OF THE ACT AT LENGTH AND CATEGORICALLY HELD THAT FOR THE PURPOSE OF CLAIMING 100% DEDUCTION U/S 80IC, THERE CAN BE ONLY ONE INITIAL ASSESSMENT YEAR. THE I.T.A.T. ALSO HELD THAT THE B ENEFIT OF 100% DEDUCTION ON SUBSTANTIAL EXPANSION IS AVAILABL E ONLY TO NEW UNITS WHICH CAME INTO EXISTENCE AFTER THE PR OVISION WAS BROUGHT ON STATUTE I.E. 1.7.2003 AND HAD ALSO H ELD THAT THE ELIGIBLE UNITS SET UP IN HIMACHAL PRADESH ARE ENTITLED TO DEDUCTION OF 100% OF THE PROFITS ONLY F OR A PERIOD OF FIVE YEARS AND NOT THEREAFTER. 7 7. IN THE PRESENT CASE, THE UNDISPUTED FACTS ARE THAT THE ELIGIBLE ASSESSEE UNDERTAKING CAME INTO EXISTENCE/COMMENCED BUSINESS ACTIVITY IN OCTOBER, 2 007 I.E. MUCH AFTER THE PROVISIONS OF SECTION 80IC WAS BROUGHT ON THE STATUTE IN 2003. FURTHER, IT IS AN UNDISPUT ED FACT THAT THE ASSESSEE HAS ALREADY CLAIMED DEDUCTION @ 1 00% OF ITS PROFITS FOR FIVE YEARS BEING ASSESSMENT YEAR 2008-09 TO 2012-13, CLAIMING ASSESSMENT YEAR 2008-09 TO BE THE INITIAL ASSESSMENT YEAR. IN VIEW OF THE SAID FACTS AND IN VIEW OF THE DECIS ION RENDERED BY THE I.T.A.T. IN THE CASE OF HYCRON ELEC TRONICS (SUPRA), THE LD. CIT (APPEALS) HAS RIGHTLY APPLIED THE RATIO LAID DOWN BY THE I.T.A.T. IN THE SAID CASE AND THER EBY RESTRICTED THE DEDUCTION OF PROFITS TO 25%, SINCE T HE ASSESSEE UNDERTAKING WAS UNDENIABLY A NEW UNIT AND NOT AN EXISTING UNIT, HAD ALREADY CLAIMED ASSESSMENT YE AR 2008-09 AS INITIAL ASSESSMENT YEAR AND ACCORDINGLY, DEDUCTION OF 100% OF ITS PROFITS FOR A PERIOD OF FI VE YEARS THEREAFTER. AS PER THE DECISION OF THE I.T.A.T. IN THE CASE OF HYCRON ELECTRONICS (SUPRA) THE ASSESSEE WAS NO LONGER ELIGIBLE TO CLAIM DEDUCTION OF 100% OF ITS PROFITS FROM 6 TH YEAR ONWARDS. IN VIEW OF THE SAME, WE UPHOLD THE O RDER OF THE CIT (APPEALS) AND DISMISS THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE. 8. THE APPEAL OF THE ASSESSEE IS, THEREFORE, DISMISSED. 8 9. SINCE THE FACTS & CIRCUMSTANCES AND ISSUES INVOLVED IN ITA NO.988/CHD/2016, ITA NO.989, ITA NO.991/CHD/2016, ITANO.995/CHD/2016, ITA NO NO.996/CHD/2016, ITA NO.1450/CHD/2016, ITA NO.1457/CHD/2016 AND ITA NO.1458/CHD/2016 ARE IDENTICAL AND EVEN THE SUBMISSIONS MADE BY COUNSELS WERE SIMILAR TO THAT IN ITA NO.994/CHD/2016, THEREFORE, OUR DECISION RENDERED IN ITA NO.994/CHD/2016 WILL APPLY TO THESE APPEALS WITH EQUAL FORCE. 10. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE S ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (DIVA SINGH) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 23 RD FEBRUARY, 2017 *RATI* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE DR ASSISTANT REGISTRAR, ITAT, CHANDIGARH