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Income Tax Appellate Tribunal, DIVISION BENCH ‘A’, CHANDIGARH
Before: MS. DIVA SINGH & MS. ANNAPURNA GUPTA
IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH ‘A’, CHANDIGARH
BEFORE MS. DIVA SINGH, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER
ITA No. 53/CHD/2018 Assessment year: 2014-15 Associated Biotech, Vs. The DCIT, Vill. Kishanpura, Circle, Nalagarh, Distt-Solan(HP). Parwanoo. PAN No. : AALFA5132G (Appellant) (Respondent)
Appellant by : Shri Yogesh Monga, CA Respondent by : Smt. Chanderkanta, Addl. CIT
Date of hearing : 02.05.2018 Date of Pronouncement : 04.05.2018
ORDER PER DIVA SINGH The present appeal has been filed by the assessee assailing the correctness of the order dated 20/11/2017 of CIT-(A) Shimla pertaining to 2014-15 assessment year on the following ground :
That the order of Ld.ClT(A) is bad and against the facts & Law. 2. That the Learned C.I.T. (A) has wrongly upheld the order of Learned Assessing Officer disallowing deduction, amounting to Rs. 2,78,57,589/-, u/s 801C, without appreciating the fact that the act allows deduction of 100% for first five years after substantial expansion. Further the Hon'ble Himachal Pradesh High Court in case of M/s Stovecraft India Vs CIT has held that deduction of 100% for first five years after substantial expansion is allowed.
It was a common stand of the parties before the Bench that the point at issue is fully covered by the decision dated 28.11.2017 of the Hon’ble High Court dated 28/11/2017 in the case of M/s Stove Craft India Versus CIT-V and others in ITA 20 to 24/2015. Ld. AR submitted that similar issue had been considered by the ITAT vide order dated 06.04.2018 in assessee's own case in 2012-13 and 2013-14 assessment year and accordingly, it was his submission that the issue may be remanded to the AO.
We have heard the submissions and perused the material available on record. The relevant facts of the case are the assessee company was engaged in the manufacturing of pharmaceutical Formulations. The assessee had claimed hundred percent deduction under section 80-IC of the eligible profits for 5 years starting from 2007-08 to 2011-12 assessment years. The
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assessee claimed hundred percent deduction of its eligible profits in the year under consideration which is the 8th year of production claiming to have carried out substantial expansion in 2012-13 assessment year. The deduction was restricted to 25% by the AO. The said order was upheld by the CIT(A) relying on the order of the ITAT in the case of M/s Hycron Electronics Vs ITO, Baddi ITA No. 326/CHD/2015. We note that in assessee's own case, ITAT relying upon the aforesaid decision of the High Court and taking note of the following conclusions thereon has remanded the issue back to the AO with the following decision:-
5 During the course of hearing before us, it was brought to our notice that the issue involved in this appeal 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 was pointed out that the Hon'ble High Court had 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 was drawn to the relevant conclusions of the Hon'ble High Court in this regard at para 55 of the order 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(61 ]. (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 fairly admitted that the issue is squarely covered by the above decision of the Hon'ble jurisdictional High Court. 7. In view of the above discussion, the impugned order of the CIT(A) is set aside and the AO is directed to grant to the assessees deduction as per the ruling of the jurisdictional High Court in this regard in the case of 'M/s Stovekraft India vs. Commissioner of Income Tax' (supra) after due examination.”
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Respectfully following the same, the issue is remanded with identical direction to the AO. Said order was pronounced in the Open Court at the time of hearing itself. 5. In the result the appeal of the assessee is allowed for statistical purposes. Order pronounced in the Open Court on 04.05.2018.
Sd/- Sd/- (ANNAPURNA GUPTA) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER
‘Poonam’ Copy to: 1. The Appellant 2. The Respondent 3. The CIT 4. The CIT(A) 5. The DR Asstt. Registrar ITAT Chandigarh