M/S SHREE BALAJI ENTERPRISES,BADDI vs. ITO, BADDI

Per Bench:

The captioned appeals have been preferred by the assessees against the separate orders of the Commissioner of Income Tax

1596& 1597/Chd/2017 – Shree Bala Ji Enterprises & Zenith International , HP 2 (Appeals), [hereinafter referred to as CIT(A)], Shimla dated

19.09.2017.

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.

notice that the issue involved in these appeals 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

1596& 1597/Chd/2017 – Shree Bala Ji Enterprises & Zenith International , HP 3 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)].”

above decision of the Hon'ble jurisdictional High Court. It was,

however, submitted that the issue be restored to the file of the

Assessing officer for verification as to whether the assessees have

actually carried out the substantial expansion to be entitled to claim

deduction u/s 80IC of the Act.

this stage. A perusal of the order of the Assessing officer reveals that

the Assessing officer has not disputed that the assessees units have

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.

1596& 1597/Chd/2017 – Shree Bala Ji Enterprises & Zenith International , HP 4 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.

CIT(A) are set aside and the Assessing officer is directed to grant to

the assessees 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).

allowed.

Order pronounced in the Open Court

Sd/- Sd/- (ANNAPURNA GUPTA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated : 26.03.2018 Rkk Copy to: 1. The Appellant 2. The Respondent 3. The CIT 4. The CIT(A) 5. The DR

1596& 1597/Chd/2017 – Shree Bala Ji Enterprises & Zenith International , HP 5