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Income Tax Appellate Tribunal, CHANDIGARH BENCHES, ‘A’ CHANDIGARH
Before: SHRI SANJAY GARG & Ms. ANNAPURNA GUPTA
IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, ‘A’ CHANDIGARH
BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER & Ms. ANNAPURNA GUPTA, ACCOUNTANT MEMBER
ITA No. 506/Chd/2018 Assessment Year: 2014-15
The ITO, Ward, Vs. M/s Jain Industrial Manufacturing Co., Parwanoo (HP) Near HRTC, Kali Mandir, Sector 1, Parwanoo, PAN No. AAFFJ5907N (Appellant) (Respondent) Appellant By : Sh Manoj Kumar Sr. DR Respondent By : Sh. Manoj Kumar, CA &
ITA No. 507/Chd/2018 Assessment Year: 2014-15
The ITO, Ward, Vs. Smt. Sudhish Soni, Parwanoo (HP) Prop M/s Sunrises Packaging, Valley View, Sector 1, Parwanoo PAN No. AUAPS3289F
Appellant By : Sh Manoj Kumar Sr. DR Respondent By : Sh. Surinder Babbar, CA Date of hearing : 02.07.2018 Date of Pronouncement : 02.07.2018
ORDER Per Bench:
The captioned appeals have been preferred by the Revenue against the separate orders of Commissioner of Income Tax (Appeals),
ITA No. 506 & 507/Chd/2018- Jain Industrial Manufacaturing Co & Sudish Soni, Parwanoo 2
Shimla [hereinafter referred to as ‘CIT(A)’] dated 19 & 20.02.2018
respectively. Since the common issue relating to the deduction claimed
u/s 80IC of the Act has been raised in both the appeals, therefore,
they were heard together and are being disposed of by this common order. ITA No.506/Chd/2018 is taken as lead case for the purpose of
narration of facts.
The brief facts relating to the issue are that the assessee
claimed deduction u/s 80IC of the Act @100% on account of
substantial expansion of the Unit. The Assessing officer, however,
denied the claim observing that assessee once had availed the
deduction u/s 80IC at the time of establishment of unit and thus was
not entitled to 100% deduction subsequently on account of substantial
expansion. The Ld. CIT(A), however, deleted the additions so made
by the Assessing officer relying upon the judgement of the Hon'ble
H.P. High Court Shimla in the case of M/s Stove Kraft India Vs. CIT
(supra). The Revenue is, thus, in appeal before us agitating the above
action of the CIT(A).
Further, it has been brought to our notice that the issue involved
in these appeals now is well settled which has already been adjudicated
by the Hon’ble Himachal Pradesh High Court vide their order dt. 28
November 2017 in the group of cases with the lead case titled as M/s
Stovekraft India vs. Commissioner of Income Tax, ITA No.20 of 2015,
and it has been pointed out that the Hon’ble High Court has decided the
issue in favour of the assessee, holding that there is no bar in the said
section denying the benefit of hundred percent deduction to new units
undertaking substantial expansion. Our attention has been drawn to the
ITA No. 506 & 507/Chd/2018- Jain Industrial Manufacaturing Co & Sudish Soni, Parwanoo 3
relevant conclusions of the Hon’ble High Court in this regard at para 55
of the order which read as under:
“55.Thus, in view of the above discussion, these appeals are allowed and orders passed by the Assessment Officer as well as the Appellate Authority and the Tribunal, in the case of each one of the Assesses, are quashed and set aside, holding as under: (a) Such of those undertakings or enterprises which were established, became operational and functional prior to 7.1.2003 and have undertaken substantial expansion between 7.1.2003 upto 1.4.2012, should be entitled to benefit of Section 80-IC of the Act, for the period for which they were not entitled to the benefit of deduction under Section 80-IB. (b) Such of those units which have commenced production after 7.1.2003 and carried out substantial expansion prior to 1.4.2012, would also be entitled to benefit of deduction at different rates of percentage stipulated under Section 80-IC. (c) Substantial expansion cannot be confined to one expansion. As long as requirement of Section 80-IC(8)(ix) is met, there can be number of multiple substantial expansions. (d) Correspondingly, there can be more than one initial Assessment Years. (e) Within the window period of 7.1.2013 upto 1.4.2012, an undertaking or an enterprise can be entitled to deduction @ 100% for a period of more than five years. (f) All this, of course, is subject to a cap of ten years. [Section 80-IC(6)]. (g) Units claiming deduction under Section 80-IC shall not be entitled to deduction under any other Section, contained in Chapter VI-A or Section 10A or 10B of the Act [Section 80- IB(5)].”
Ld. DR has fairly admitted that the issue is squarely covered by
the above decision of the Hon'ble jurisdictional High Court. He,
however, has submitted that the issue be restored to the file of the
Assessing officer for verification as to whether the assessee has
actually carried out the substantial expansion to be entitled to claim
deduction u/s 80IC of the Act.
ITA No. 506 & 507/Chd/2018- Jain Industrial Manufacaturing Co & Sudish Soni, Parwanoo 4
We do not agree to the above contention raised by the Revenue at
this stage. A perusal of the order of the Assessing officer reveals that
the Assessing officer has not disputed that the assessee unit has carried
out substantial expansion as provided under clause (b) of sub section
(2) read with clause (ix) of sub section (7) of section 80IC of the Act.
Almost similar view has also been taken by the Hon'ble Himachal
Pradesh High Court in the case of ‘M/s Stovekraft India vs.
Commissioner of Income Tax’ (supra) in the following concluding para
of the order:-
“58. On facts, we may clarify that the Revenue has not disputed, (a) the units having carried out substantial expansion within the definition of the Section, (b) their entitlement and extent of deduction would be dependent upon interpretation of the relevant provisions.” We, therefore, do not find any justification at this stage to give the
Assessing officer a second innings to re-examine undisputed facts.
In view of the above discussion, we find that the Ld. CIT(A) that
correctly followed the judgement of the Hon'ble H.P. High Court
Shimla in the case of M/s Stove Kraft India Vs. CIT (supra). We do not
find any infirmity in the order of CIT(A) and the same is, therefore, upheld. Our findings given above mutatis-mutandis applies to ITA No.507/Chd/2018 also.
In the result, both appeals of the Revenue are dismissed.
Order pronounced in the Open Court
Sd/- Sd/- (ANNAPURNA GUPTA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated : 02.07.2018
ITA No. 506 & 507/Chd/2018- Jain Industrial Manufacaturing Co & Sudish Soni, Parwanoo 5
Rkk
Copy to: 1. The Appellant 2. The Respondent 3. The CIT 4. The CIT(A) 5. The DR