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Income Tax Appellate Tribunal, CHANDIGARH
Before: SMT. DIVA SINGH, JM & Dr. B.R.R.KUMAR, AM
आदेश/ORDER
PER DIVA SINGH
The present appeal has been filed by the Revenue assailing the correctness of the order dated 08.02.2018 of CIT(A) Shimla pertaining to 2014-15 assessment year on the following grounds :
On the facts and in the circumstances of the case, the Ld. CIT (A) has erred in deleting the addition of Rs.82,17,253/- made by AO by restricting the claim of the assessee to 25% as against the 100% claim made in the 8th year, ignoring the fact that units which commenced production after 07.01.2003 can’t carry out multiple "substantial expansion" as per provisions of section 80-IC of the Income Tax Act and as explained in CBDT Circular No. 7/2003. 2. On the facts and in the circumstances of the case, the Ld. CIT (A) has erred in holding that there can be more than one "initial assessment year" for availing the deduction under section 80-IC of the Income Tax Act. In other words, the assessee can first claim deduction from the initial assessment year, being the year of setting up of the industrial undertaking and, thereafter, once again claim the deduction from another initial assessment year, being the assessment year in which the assessee carries out substantial expansion of its undertaking.
At the time of hearing, no one was present on behalf of the assessee. The record shows that notice has been sent to the assessee at the address mentioned in form No. 11 in the Memo of Appeal filed. The ld. Sr.DR Mr. Manjit Singh relying upon decision of the Apex Court in the case of CIT Vs Classic Binding Industries (2018) 96 taxmann.com 405 (S.C) submitted that
ITA 617/CHD/2018 A.Y.2014-15 Page 2 of 2
the point at issue is fully covered in favour of the Department. Inviting attention to the impugned order, it was his submission that deduction @ 100% of eligible profits qua manufacturing activity in the 8th year was made by the AO relying upon the provisions of the Act as considered by the ITAT in the case of Hycron Electronics V ITO in ITA 798/CHD/2012 dated 27.05.2015 which stood upset by the CIT(A) relying upon the decision of the jurisdictional High Court in the case of M/s Stove Craft India Versus CIT-V and others in ITA 20 to 24/2015. It was his submission that the said decision has not been approved by the Hon'ble Apex Court, accordingly relying upon the said decision, it was his prayer that the departmental appeal may be allowed.
We have heard the rival submissions and perused the material on record. It is seen that in the facts of the present case, qua manufacturing activity the assessee had started its operation on 08.04.2006 and the claim of deduction @ 100% of eligible profits stood exhausted for five years and the AO in the facts of the present case, considering the year under consideration being the 8th year, restricted the deduction to the extent of 25% which position of law has been confirmed by the Apex Court in the aforesaid decision in the case of CIT Vs Classic Binding Industries (supra). Accordingly, in terms of the said judicial precedent available, the appeal of the Revenue is allowed. The impugned order is set aside upholding the assessment order.
In the result, the appeal of the Revenue is allowed.
Order Pronounced in the Open Court on 29.10. 2018.
Sd/- Sd/- ( डा. बी.आर.आर. कुमार) (�दवा �संह ) (Dr. B.R.R. KUMAR) (DIVA SINGH) लेखा सद�य/ Accountant Member �या�यक सद�य/Judicial Member “पूनम” आदेश क� ��त�ल�प अ�े�षत/ Copy of the order forwarded to : अपीलाथ�/ The Appellant - 1. ��यथ�/ The Respondent - 2. आयकर आयु�त/ CIT 3. आयकर आयु�त (अपील)/ The CIT(A) 4. �वभागीय ��त�न�ध, आयकर अपील�य आ�धकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 5. गाड� फाईल/ Guard File 6.
आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar ITAT,Chandigarh.