M/s Seva Die Casting, Baddi v. DCIT, Circle, Parwanoo

ITA 1162/CHANDI/2017 | 2013-2014
Pronouncement Date: 30-11-2017 | Result: Allowed

Appeal Details

RSA Number 116221514 RSA 2017
Assessee PAN ABGFS9754G
Bench Chandigarh
Appeal Number ITA 1162/CHANDI/2017
Duration Of Justice 4 month(s) 9 day(s)
Appellant M/s Seva Die Casting, Baddi
Respondent DCIT, Circle, Parwanoo
Appeal Type Income Tax Appeal
Pronouncement Date 30-11-2017
Appeal Filed By Assessee
Tags No record found
Order Result Allowed
Bench Allotted B
Tribunal Order Date 30-11-2017
Last Hearing Date 28-11-2017
First Hearing Date 28-11-2017
Assessment Year 2013-2014
Appeal Filed On 21-07-2017
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCHB CHANDIGARH BEFORE SMT. DIVA SINGH JUDICIAL MEMBER AND SHRI B.R.R. KUMAR ACCOUNTANT MEMBER ITA NO.1162/CHD/2017 ASSESSMENT YEAR: 2013-14 M/S SEVA DIE CASTING VS. DCIT VILL- KATHA OPP. CIRCLE- PARWANOO COCA COLA FACTORY SOLAN H.P. PAN NO. ABGFS9754G (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. MANOJ KUMAR REVENUE BY : SH. MANJIT SINGH DATE OF HEARING : 30/11/2017 DATE OF PRONOUNCEMENT : 30/11/2017 ORDER PER DR. B.R.R. KUMAR A.M. THE PRESENT APPEAL HAS BEEN FILED BY ASSESSEE AGAIN ST THE ORDER OF THE LD. CIT(A) SHIMLA H.P DT. 20/05/2017 ON THE FOLLOWING GROUNDS: 1. THE LD. CIT(A) IS WRONG IN DISALLOWING THE BENEFIT OF SUBSTANTIAL EXPANSION UNDER SECTION 80IC(2) AND CONFIRMING THE DEDUCTION 80IC ONLY TO T HE EXTENT OF 25% AS AGAINST 100% BY HOLDING THAT BENEFIT OF SUBSTANTIAL EXPANSION IS AL LOWABLE ONLY TO THE UNDERTAKING WHICH WERE EXISTING AS ON 07/01/2003.. 2. IN VIEW OF ABOVE & SUCH OTHER GROUNDS WHICH MAY BE TAKEN AT THE TIME OF HEARING THE APPEAL MAY PLEASE BE ALLOWED & JUSTICE RENDERED. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FI RM IS ENGAGED IN MANUFACTURING OF ALUMINUM DYE CASTING DOING ACTIVIT Y FROM BADDI DISTRICT SOLAN. DURING THE YEAR THE ASSESSEE HAS CLAIMED 100% DEDUC TION UNDER SECTION 80IC ON THE PROFITS EARNED BY THE MANUFACTURING ACTIVITY. T HE ASSESSING OFFICER FOLLOWING THE ORDER OF THE ITAT CHANDIGARH IN THE CASE OF M/ S HYCRON ELECTRONICS IN ITA 798/CHD/2012 HAS RESTRICTED THE ADDITION TO THE TUN E OF 25% OF PROFITS AS ELIGIBLE DEDUCTION 80IC AS THE ASSESSEE HAS UNDERTAKING SUBS TANTIAL EXPANSION IN THE 2 LATER YEARS AND ALREADY CLAIMED DEDUCTION UNDER SEC TION 80IC FOR FIVE CONSECUTIVE YEARS. 3. THE ASSESSEE APPEALED BEFORE LD. CIT(A) WHO H AS CONFIRMED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER FOLLOWIN G THE ORDER OF THE ITAT CHANDIGARH MENTIONED BY THE ASSESSING OFFICER AS AB OVE. 4. THE ISSUE OF DEDUCTION UNDER SECTION 80IC IN CAS E OF M/S HYCRON ELECTRONICS IN ITA 798/CHD/2012 HAS TRAVELLED UP TO HONBLE HIGH COURT OF HIMACHAL PRADESH SHIMLA. 5. BEFORE US DURING THE HEARING TODAY I.E; ON 30/11 /2017 THE LD. AR BROUGHT TO OUR NOTICE THE JUDGMENT OF HONBLE HIGH COURT VI DE ORDER DT. 28/11/2017 WHEREIN IT IS HELD AS UNDER: 48. WE FIND THERE CAN BE DIFFERENT FACT SITUATION S SOME OF WHICH WE HAVE TRIED TO ILLUSTRATE; (I) A UNIT ESTABLISHED PRIOR TO 07/01/2003 CLAIMING DEDUCTION UNDER SECTION 80-IB POST INSERTION OF SECTION 80-I C CARRIED OUT SUBSTANTIAL EXPANSION WOULD BE ENTITLED TO DEDUCTION ONLY UNDE R SECTION 80-IC AT THE ADMISSIBLE PERCENTAGE FOR THE REMAINING PERIOD WHI CH IN ANY CASE WHEN COMBINED CANNOT EXCEED TEN YEARS (II) JUST AS IN THE CASE OF THE PRESENT ASSESSEE A UNIT ESTABLISHED AFTER 07/01/2003 CARR IES OUT SUBSTANTIAL EXPANSION ONLY IN THE 8 TH YEAR OF ITS ESTABLISHMENT FOR THE FIRST FIVE YEAR S WOULD HAVE ALREADY CLAIMED DEDUCTION @ 100%; FOR THE 6 TH AND 7 TH YEARS @ 25% AND THEN FOR THE PERIOD POST SUBSTANTIAL EXPANSION IN OUR CONSIDERE D VIEW THE INITIAL YEAR OF ASSESSMENT BEING IN THE 8 TH YEAR WOULD BE ENTITLED FOR DEDUCTION @100% SUBJE CT TO THE CAP OF TEN ASSESSMENT YEARS (III) THE ASSES SEEE ESTABLISHED A UNIT AFTER JANUARY 2003 SAY IN THE YEAR 2005-06 AND CLAIMS DE DUCTION UNDER SECTION 80-IC FOR THE FIRST TIME IN THE ASSESSMENT YEAR 2006-07 @ 100% OF ITS PROFITS. THEREAFTER SUBSTANTIALLY EXPANDS THE UNIT IN THE YEAR 2009-10 RELEVANT TO ASSESSMENT YEAR 2010-11 CAN CLAIM DEDUCTION @100% FOR NEXT FIVE YEA RS SUBJECT TO THE CAP OF TEN ASSESSMENT YEARS (IV) AN EXISTING UNIT NOT CLAIMIN G ANY DEDUCTION UNDER SECTION 80-IA 80-IB OR 80-IC SUBSTANTIALLY EXPANDS IN THE I N THE YEAR 2003 AND CLAIMS DEDUCTION UNDER SECTION 80-IC FIRST TIME IN AY 2004 -05 AND THEN SUBSTANTIALLY EXPANDS IN THE YEAR 2007-08 CAN CLAIM DEDUCTION @ 100% W.E.F. ASSESSMENT YEAR 2008-09 FOR NEXT FIVE YEARS (V) THE ASSESSEE SETS UP ITS UNIT IN THE YEAR 2000-01 CLAIMING DEDUCTION UNDER SECTION 80-IB TILL THE ASS ESSMENT YEAR 2003-04 AND THEREAFTER UNDER SECTION 80-IC AS PER LAW. CARRYING OUT SUBSTANTIAL EXPANSION IN THE ASSESSMENT YEAR 2004-05 NOW CLAIMS DEDUCTION @ 100% W.E.F ASSESSMENT YEAR 2004-05 AGAIN SUBSTANTIALLY EXPANDS IN THE ASS ESSMENT YEAR 2008-09 CAN CLAIM 100% DEDUCTION W.E.F 2008-09 (VI) THE ASSESS EE SETS UP A UNIT IN THE YEAR 2005-06 AND DOES NOT UNDERGO SUBSTANTIAL EXPANSION AT ALL CAN CLAIM DEDUCTION UNDER SECTION 80-IC. 49. IN VIEW OF ABOVE DISCUSSION WE DO NOT FIND THE IMPUGNED ORDERS TO BE SUSTAINABLE IN LAW. 3 6. ACCORDINGLY THE LD. AR SUBMITTED THAT SINCE THE APPEAL OF THE ASSESSEE ALLOWED BY THE HONBLE HIGH COURT NECESSARY RELIEF MAY BE GRANTED TO THE ASSESSEE. 7. THE LD. SR. DR ON CONSIDERING THE AFORESAID ORDE R OF HONBLE HIGH COURT SUBMITTED THAT SINCE THE FACTS OF THE PRESENT CASE MAY BE REQUIRED TO BE SEEN AND THE ASSESSING OFFICER AND THE CIT(A) DID NOT HA VE THE BENEFIT OF THE ORDER THE ISSUE MAY BE REMANDED TO THE FILE OF THE ASSESS ING OFFICER. THE SAID SUGGESTION WAS NOT OPPOSED BY THE LD. AR. 8. WE HAVE HEARD THESE SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD WE FIND THAT THE HONBLE HIGH COURT IN THE A FORESAID ORDER CONSIDERED THE FACTS OF THE SPECIFIC CASE IN PARA 51 AND CONSI DERING THE SAME CAME TO THE FOLLOWING CONCLUSION:- 55. THUS IN VIEW OF THE ABOVE DISCUSSION THESE A PPEALS ARE ALLOWED AND ORDERS PASSED BY THE ASSESSMENT OFFICER AS WELL AS THE APP ELLATE 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 SHOUL D 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 PRODUC TION AFTER 07/01/2003 AND CARRIED OUT SUBSTANTIAL EXPANSION PRIOR TO 01/04/20 12 WOULD ALSO BE ENTITLED TO BENEFIT OF DEDUCTION AT DIFFERENT RATES OF PERCENTA GE 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 C AN BE NUMBER OF MULTIPLE SUBSTANTIAL EXPANSIONS. (D) CORRESPONDINGLY THERE CAN BE MORE THAN ONE INI TIAL 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% FO R 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 SH ALL NOT BE ENTITLED TO DEDUCTION UNDER ANY OTHER SECTION CONTAINED IN CHA PTER VI-A OR SECTION 10A OR 10B OF THE ACT [SECTION 80-IB(5)]. 4 8.1. IT IS SEEN THAT THE FACTS OF THE SAID CASE WER E NOT IN DISPUTE AS THE FACT OF EXPANSION HAVING BEEN CARRIED OUT WAS ACCEPTED BY T HE REVENUE. SINCE ADMITTEDLY THE FACTS HAVE NOT BEEN ADDRESSED BY THE PARTIES IN THE LIGHT OF THE DECISION OF THE HONBLE HIGH COURT. ACCORDINGLY IN TERMS OF THE PRAYER OF THE PARTIES WE DEEM IT APPROPRIATE TO SET ASIDE THE ISS UE BACK TO THE FILE OF ASSESSING OFFICER WITH A DIRECTION TO PASS A SPEAKING ORDER I N ACCORDANCE WITH LAW AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEI NG HEARD. THE SAID ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ITSELF. 9. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (DIVA SINGH) (B.R.R.KUMAR ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 30/11/2017 AG COPY TO: THE APPELLANT THE RESPONDENT THE CIT TH E CIT(A) THE DR