BHUPINDER KAUR,DHARAMPUR vs. DCIT, CIRCLE, SHIMLA

Both the parties at the time of hearing, stated that the legal issue stands decided in favour of the assessee by the decision of the jurisdictional High Court in the case of M/s Stove Craft & others dated 28.11.2017. Accordingly, it was a common prayer that the issue may be remanded to the AO with a direction to grant necessary relief in terms of the direction of the Hon’ble High Court considering the peculiar facts and circumstances of the present case. 3. We have heard the submissions and perused the material available on record. We have seen that the assessee in the year under consideration claimed 100% deduction of its eligible profits on account of substantial expansion having been carried out in 2005-06 assessment year. Relying upon the decision of the ITAT in the case of M/s Hycron Ltd., the AO restricted it to 25%. It is seen that by virtue of the aforesaid decision of the Hon'ble High Court, the issue is no longer res-integra.

It is seen that the jurisdictional High Court in the aforesaid decision considered the facts of the specific case in para 51 and considering the same came 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. Order pronounced in the Open Court on 13.03. 2018.