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Income Tax Appellate Tribunal, SMC, CHANDIGARH
Before: MS. DIVA SINGH
IN THE INCOME TAX APPELLATE TRIBUNAL SMC, CHANDIGARH BEFORE MS. DIVA SINGH, JUDICIAL MEMBER ITA No. 421/Chd/2018 (Assessment Year: 2014-15)
JCIT (OSD) Vs. M/s Quixotic Healthcare Circle-1(1) Plot No. 784, Indl Area-II Chandigarh Chandigarh PAN No. AAAFQ21947N
(Appellant) (Respondent)
Assessee By : Shri. Parikshit Aggarwal Revenue By : Shri Manoj Kumar Date of hearing : 21/06/2018 Date of Pronouncement : 29/06/2018
ORDER PER DIVA SINGH, J.M.
The present appeal has been filed by Revenue assailing the correctness of the order dt. 10/01/2018 of CIT(A)-1, Chandigarh pertaining to A.Y. 2014-15, wherein the relief granted by the CIT(A) by relying upon the decision of jurisdictional High Court in the case of M/s Stovekraft India is assailed.
The Revenue in the present appeal specifically assails the order on the ground that the judgment has not been accepted by the department.
Both the parties have been heard. The facts on record are that the assessee is engaged in the business of manufacturing of pharmaceutical formulations. The assessee firm has two units located at Baddi (H.P.) and are claiming deduction u/s 80IC in both the units. The deduction under section 80IC claimed by the assessee @100% was allowed in Unit-II as this was the first year. However for Unit-I it was restricted to 25% in view of the fact that the five assessment years commencing from the initial assessment year stood exhausted and the claim of substantial expansion having been carried out by the assessee in the eighth year was held to be not allowable for a claim of deduction @100%. The CIT(A) relying upon the decision of the jurisdictional High Court in the case of M/s Stovekraft India which had consistently been followed by the ITAT granted relief which order is under challenge in the present proceedings. We note that the issue is no longer as integra. The jurisdictional High Court in the aforesaid
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decision reported in 400 ITR (H.P.) has very categorically considering identical issues has held after considering the facts of the aforesaid decision in para 51 as under:
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)].
Accordingly, in the peculiar facts, we find no infirmity in the order of the CIT(A) passed in compliance to the directions and the decision of the Court. No infirmity distinguishing the decision either on facts or circumstances has been brought to our notice by the department. The department appeal accordingly is dismissed. Said order was pronounced in the open Court at the time of hearing itself.
In the result, the appeal of the assessee is allowed for statistical purposes.
Sd/- (DIVA SINGH) JUDICIAL MEMBER Dated : 29/06/2018 AG Copy to: The Appellant, The Respondent, The CIT, The CIT(A), The DR