MNC HERS,NEW DELHI vs. ACIT, CIRCLE- 35(1), NEW DELHI

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ITA 300/DEL/2019Status: HeardITAT Delhi06 September 2022AY 2012-135 pages
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What did the Tribunal hold?

The Tribunal followed the Supreme Court's decision in Aarham Softronics, which ruled in favor of the assessee. Consequently, the AO was directed to allow the full 100% deduction under Section 80IC.

What were the facts?

The assessee claimed 100% deduction under Section 80IC of the Income Tax Act due to substantial expansion. The AO restricted the deduction to 25%, and the CIT(A) upheld this, relying on previous judicial pronouncements.

What were the issues?

The primary issue was whether the assessee was eligible for 100% deduction under Section 80IC based on substantial expansion, or if it was limited to 25%.

Which sections of the Income-tax Act were involved?

Section 80IC

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Income Tax Appellate Tribunal, DELHI BENCH ‘E’, NEW DELHI

Before: SH. N. K. BILLAIYA & SH. KUL BHARAT

Hearing: 06/09/2022Pronounced: 06/09/2022

This appeal by the assessee is preferred against the order of the CIT(A)-12, New Delhi dated 11.10.2018 for A.Y.2012-13.

2.

The grievance of the assessee read as under :-

3.

At the very outset the counsel for the assessee stated that under the instructions she is not pressing ground No.1 to 4, therefore, grounds No. 1 to 4 are dismissed as not pressed.

4.

The only ground survives for our adjudication relates to the restriction of the of deduction u/s. 80 IC of the Act to 25% as against the claim of 100%.

5.

The entire quarrel relates to the fact that the assessee claimed 100% deduction u/s. 80 IC of the Act on the ground that there was substantial expansion under taken by the assessee which according to the amended provision make the assessee an eligible assessee for the claim of deduction @ 100%.

6.

The entire claim of the assessee was rejected by the AO who was of the firm belief that the assessee is only entitled for the claim of deduction @ 25% drawing support from the decision of the Tribunal Chandigarh Bench in the case of Hycron Electronics in order dated 27.05.2015.

7.

When the matter was agitated before the CIT(A) the CIT(A) followed the interpretation given by the Hon’ble Supreme Court in the case of Classic Binding Industries in Civil Appeal No.7208 of 2018. The CIT(A) dismissed the appeal.

8.

The impugned quarrel has now been well settled by the Hon’ble Supreme Court in the case of Aarham Softronics Vs DCIT 102 taxmann.com 343 in favour of the assessee and against the revenue. The Hon’ble Supreme Court while deciding the quarrel has considered the judgment given in the case of Classic Binding Industries (supra) and Mahabir Industries 94 taxmann.com 260. The relevant findings read as under :-

9.

Respectfully following the decision of the Hon’ble Supreme court we direct the AO to allow the claim of deduction u/s. 80 IC of the Act @ 100%. The appeal filed by the assessee is partly allowed.

10.

Decision announced in the open court on 06.09.2022.

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