JASCO PAPER PRODUCTS,CHANDIGARH vs. ACIT, C-4(1), CHANDIGARH

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ITA 180/CHANDI/2018Status: DisposedITAT Chandigarh17 May 2018AY 2014-154 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee is entitled to 100% deduction under Section 80IC for substantial expansion, following the jurisdictional High Court's decision. The Assessing Officer's request for re-verification was rejected as the fact of substantial expansion was not disputed.

What were the facts?

The assessee claimed 100% deduction under Section 80IC for substantial expansion of its unit. The CIT(A) disallowed this claim. The assessee appealed to the ITAT.

What were the issues?

Whether an assessee is entitled to 100% deduction under Section 80IC for substantial expansion of a unit, and if the Assessing Officer can re-examine undisputed facts at a later stage.

Which sections of the Income-tax Act were involved?

Section 80IC

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, CHANDIGARH BENCHES, ‘A’ CHANDIGARH

Before: SHRI SANJAY GARG & Ms. ANNAPURNA GUPTA

For Respondent: Ms. Deepika Mohan, JCIT
Hearing: 17.05.2018Pronounced: 17.05.2018

Per Sanjay Garg, Judicial Member:

The captioned appeal has been preferred by the assessee against the order dated 19.12.2017 of the Commissioner of Income Tax (Appeals)-2, Chandigarh [hereinafter referred to as CIT(A)].

2.

Though the assessee has raised as many as four grounds of appeal but during the course of hearing the Ld. AR of the assessee has submitted that the only effective ground raised in this appeal is ground No. 2, which relates to the action of the CIT(A) in disallowing the claim of deduction @ 100% us 80IC of the Income-tax Act, 1961 (in short 'the Act') on account of substantial expansion of the Unit.

3.

Further, it has been 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 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 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)].”

4.

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.

5.

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.

6.

In view of the above discussion, the impugned order of the CIT(A) is set aside and the Assessing officer is directed to grant to the assessee deduction at the rate of hundred percent of its eligible profits,

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).

7.

In the result, the appeal of the assessee, therefore, stands allowed.

Order pronounced in the Open Court (ANNAPURNA GUPTA) JUDICIAL MEMBER Dated : 17.05.2018 Rkk Copy to:

1.

The Appellant

2.

The Respondent

3.

The CIT

4.

The CIT(A)

5.

The DR

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