MS PARK PHARMACEUTICALS vs. PRINCIPAL COMMISSIONER OF INCOME TAX

Vide order dated 18th May, 2017, the appeal was admitted on the following substantial questions of law:- a) Whether the Ld. Income Tax Appellate Tribunal is right in law in holding that benefit of deduction under Section 80IC are allowable to only those units which were existing prior to the year 2003 on account of their substantial expansions and the units which were set up after 2003 were ineligible in respect of the same? b) Whether the Ld. Income Tax Appellate Tribunal is right in law and facts in holding that undertaking which has been claimed deduction under Section 80IC is debarred from claiming further deduction though the factum of substantial expansion is not in dispute? c) Whether the Ld. Income Tax Appellate Tribunal is right in law and facts in holding that the circular bearing No.7 of 2003 could be relied upon while interpreting provisions of Section 80IC of the Income Tax Act, 1961? d) Whether the Ld. Income Tax Appellate Tribunal is right in law and facts in holding that definition of initial assessment year does not allow the undertaking to claim deduction under Section 80IC of 100% upon their substantial expansion? e) That whether the orders of the Ld. Income Tax Appellate Tribunal is perverse as the same is based on incorrect application of the provisions of law ?

Learned counsel for the appellant has submitted that the present appeal is liable to be allowed, in terms of the decision given by 3

Learned counsel for the respondent has not controverted the submission made by learned counsel for the appellant to the effect that the appeal is covered by the decision of the Hon’ble Supreme Court in Aarham Softronics’s case supra.

Hon’ble Supreme Court in Aarham Softronics’s case supra has held as under:- “24. The aforesaid discussion leads us to the following conclusions: (a) Judgment dated August 20, 2018 in Classic Binding Industries case omitted to take note of the definition "initial assessment year" contained in section 80-IC itself and instead based its conclusion on the definition contained in section 80-IB, which does not apply in these cases. The definitions of "initial assessment year" in the two sections, viz., sections 80- IB and 80-IC are materially different. The definition of "initial assessment year" under section 80-IC has made all the difference. Therefore, we are of the opinion that the aforesaid judgment does not lay down the correct law. (b) An undertaking or an enterprise which had set up a new unit between January 7, 2003 and April 1, 2012 in the State of Himachal Pradesh of the nature mentioned in clause (ii) of sub-section (2) of section 80-IC, would be entitled to deduction at the rate of 100 per cent. of 4

The substantial questions of law, framed in this case, stand answered accordingly. Consequently, the appeal is allowed and the impugned order dated 30th November, 2016, is modified, in terms of the order of Hon’ble Supreme Court in Aarham Softronics’s case supra.