M/S MICROPET INDUSTRIES,KALA AMB vs. DEPUTY COMMISSIONER OF INCOME TAX, SHIMLA

The ld. AR submitted that the point at issue is fully covered in favour of the assessee by virtue of 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. 3. Elaborating the facts, it was his submission that the year under consideration is the 8th year and the substantial expansion has been carried out by the assessee in 2011-12 assessment year. Accordingly, it was his submission that in terms of the decision of the jurisdictional High Court, relief may be directed to be granted. It was clarified that on the issue of substantial expansion having been carried out in 2011-12

The ld. Sr.DR on the other hand, submitted that the facts need to be verified.

We have heard the rival submissions and perused the material on record. It is seen that the assessee firm was engaged in the business of manufacturing of pet bottles. The AO required the assessee to justify the claim of 100% deduction on the eligible profits as 100% deduction of eligible profits u/s 80IC stood claimed for five years starting from 2007-08 to 2011-12 assessment years and the year under consideration was the 8th year. Relying upon decision of ITAT in the case of Hycron Electronics V ITO dated 27.05.2015in ITA 798/CHD/2012, claim was restricted to 25%. In appeal before the CIT(A), said order was confirmed taking note of the fact that the manufacturing activity/operation was started on 06.06.2006 and the initial claim for deduction u/s 80IC was 2007-08. We find that the issue is no longer res-integra as the jurisdictional High Court in the aforesaid decision considered the facts of the specific case in para 51 has come to the following conclusion:- 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 assessees, are quashed and set aside, holding as under: (a) Such of those undertakings or enterprises which were established, became operational and functional prior to 07/01/2003 and have undertaken substantial expansion between 07/01/2003 upto 01/04/2012, 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 07/01/2003 and carried out substantial expansion prior to 01/04/2012, 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 07/01/2013 upto 01/04/2012, 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)].

In the result, the appeal of the assessee is allowed for statistical purposes.