Income Tax Appellate Tribunal - Chandigarh
M/S Admac Formulations , Panchkula vs Assessee on 18 February, 2016
IN THE INCOME TAX APPELLATE TRIBUNAL
DIVISION BENCH,CHANDIGARH
BEFORE SHRI H.L.KARWA, HON'BLE VICE PRESIDENT
AND Ms. RANO JAIN, ACCOUNTANT MEMBER
ITA No. 821/CHD/2015
Assessment Year: 2012-13
M/s Admac Formulations, Vs The I TO,
House No. 272, Ward-1,
Sector 17, Panchkul a.
Panchkul a.
PAN: AAAAA5219Q
(Appellant) (Respondent)
Appellant by : Shri Tej Mohan Singh
Respondent by : Shri Manjit Singh
Date of Hearing : 17.02.2016
Date of Pronouncement : 18.02.2016
O R D E R
PER H.L.KARWA,V.P. This appeal filed by the assessee is directed against the order of ld. CIT(Appeals) Panchkula dated 30.09.2015 relating to assessment year 2012-13.
2. In this appeal, the assessee has raised the following grounds :
"1. That the Ld. Commissioner of Income Tax (Appeals) has erred in law as well as on facts in upholding the reduction of deduction under section 80IC of the Act to 25% as against 100% claimed as the assessee has admittedly carried out substantial expansion which makes the unit eligible for 2 deduction @ 100% and as such non allowance of deduction at 100% is illegal, arbitrary and unjustified.
2. That the Ld. Commissioner of Income Tax (Appeals) has failed to construe the benevolent provisions as enacted in Chapter VI of the Act in a harmonious and liberal manner especially when there are decisions of various courts in favour of the assessee and as such upholding of the assessment order is arbitrary and unjustified."
3. Briefly stated, the facts of the case are that the assessee is engaged in the business of manufacturing of pharmaceutical products. For the assessment year 2012-13, assessee submitted its return of income on 25.09.2012 declaring total income of Rs. 40,855/- after claiming a deduction of Rs. 1,09,90,415/- at 100% of profit under section 80IC of the Income Tax Act, 1961 ( in short 'the Act'). The Assessing Officer completed the assessment under section 143(3) of the Act at an income of Rs. 68,22,800/- after allowing the deduction of Rs. 22,60,648/- under section 80IC of the Act at 25% of the profits.
4. On appeal, the ld. CIT(Appeals) confirmed the order of the Assessing Officer following his own order passed in assessee's own case for the assessment year 2011-12 dated 22.09.2014.
5. Aggrieved by the order of the ld. CIT(Appeals), the assessee is in appeal before the Tribunal.
6. After hearing the ld. Representatives of both the parties at length, we find that the issue is squarely covered in favour of the revenue and against the 3 assessee by the decision of this Bench of the Tribunal in the case of Hycron Electronics, Baddi, Solan v ITO & Others in ITA No. 798/Chd/2012 relating to assessment year 2009-10 & others. The Tribunal vide its order dated 27.5.2015 (para 22 to 49) has held as under:-
"22. We have co nsidere d the r ival submissio ns inclu ding written submissions in the light of mate rial o n record, as well as judgments cited by the par ties. Befor e we co nsider the re levant provisions which ar e re quir ed to be interpre te d, it w ill be usef ul to deal with the vario us pr inci ple s of inte rpre tati on as enunciate d by vario us Cour ts.
23. It is settle d that if the language of a particular Statute is clear then o nly lite ral meaning has to be given to such language as lo ng the same do es no t re sult in absurdity or unintended consequences. Therefo re, if the language of a particular S tatute is cle ar the n the same canno t be changed by applyin g differe nt princ iple s of inter pre tations. This is cle ar fr om the obse rvations made by 'Hon'ble Apex Cour t' in the case of Orissa S tate Warehousing Cor poration Vs. CIT 237 ITR 607 wherein it has been o bser ved at page 604 & 605 of the r epor t as under:-
"Let us, however, at this juncture, consider some of the oft cited decisions pertaining to the interpretation of the fiscal statutes being the focal point of consideration in these appeals. Lord Halsbury as early as 1901, in Cooke v. Charles A. Vogeler Company [1901] AC 102 (HL) stated the law in the manner following:
"a court of law, has nothing to do with the reasonableness or unreasonableness of a provision of a statute except so far as it may h old it in interpreting what the Legislature has said. If the language of a statute be plain, admitting of only one meaning, the Legislature must be taken to have meant and intended what it has plainly expressed, and whatever it has in clear terms enacted must be enforced though it should not lead to absurd or mischievous results. If the language of this sub-section be not controlled by some of the other provisions of the statute. It must, since, its language is plain and unambiguous, be enforced and your Lordships' House sitting judicially is not concerned with the question whether the policy it embodies is wise or unwise, or whether it leads to consequences just or unjust, beneficial or mischievous."
The oft-quoted observations of Rowlattt J. in the case of Cape Brandy Syndicate v. IRC [1921] 1 KB 64 ought also to be noticed at this juncture. The learned judge observed (page 71):
". . . in a taxing statute one has to look merely at what is clearly said. There is no room for any intendment.4
There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used."
The observations of Rowlatt J. as above stand accepted and approved by the House of Lords in a later decision, in the case of Canadian Eagle Oil also in a manner similar in IRC v. Ros and Coulter (Bladnoch Distillery Co. Ltd. v. The King [1946] Hon'ble Apex Court 119; [1945] 2 All ER 499. Lord Thankerton also in a manner similar in IRC v. Ross and Coulter (Bladnoch Distillery Co. Ltd. [1984] 1 All ER 616 at page 625 observe:
"If the meaning of the provision is reasonably clear, the courts have no jurisdiction to mitigate such harshness."
The decision of this court in Keshavji Ravji and Co. v. CIT[1990] 183 ITR 1 also lends concurrence to the views expressed above. This court observed (page 9):
"As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the Legislature cannot then be appealed to to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words used. It is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the Legislature...
Artificial and unduly latidudinarian rules of construction, which with their general tendency to 'give the taxpayer the breaks', are out of place where the legislation has a fiscal mission."
Be it noted that individual cases of hardship and injustice do not and cannot have any bearing for rejecting the natural construction by attributing normal meaning to the words used since "hard cases do not make bad laws".
However, if some ambiguity is the re in the language of a par ticular statute be cause of var ious reasons, the same is required to be co nstrued so as to f ind o ut the real intention of the Legislature and then every possible material sh ould be considered to find out the re al intention of the Legislature . In this regar d, the obse rvation of the Ho n'ble S upreme Court in the celebrated judgement of K.P. Ver gese 131 ITR 598 (supra) ar e relevant. We ex trac t the Head no te which reads as under:-
"A statutory provision must be so construed, if possible, that absurdity and mischief may be avoided. Where the plain literal interpretation of a statutory provision produces a manifestly absurd and unjust result which could never have been intended by the legislature, the court may modify the language used by the legislature or even do some violence to it, so as to achieve the obvious intention of the legislature and produce a rational construction.5
LUKE V. IRC [1963] HON'BLE APEX COURT 557; [1964] 54 ITR 692 (HL) followed.
Speeches made by the members of the legislature on the floor of the House when the Bill is being debated are inadmissible for the purpose of interpreting the statutory provision but the speech made by the mover of the Bill explaining the reason for its introduction can certainly be referred to for the purpose of ascertaining the mischief sought to be remedied by the legislation and the object and purpose for which the legislation is enacted. This is an accord with the recent trend in juristic thought not only in western countries but also in India, that the interpretation of a statute being an exercise in the ascertainment of meaning, everything which is logically relevant should be admissible.
The marginal note to a section cannot be referred to for the purpose of construing the section but it can certainly be relied upon as indicating the drift of the section or to show what the section is dealing with. It cannot control the interpretation of the words of a section, particularly when the language of the section is clear and unambiguous but, being part of the statute, it prima facie furnishes some clue as to the meaning and purpose of the section."
The highlighted po rtion clearly shows that eve ry mater ial which is logically rele vant should be taken into acco unt fo r ascer taining the true meaning of a par ticular provision. The same view was take n by Hon'ble Karnatak a High Co ur t in the case of CIT v N.K. Vaidya 224 ITR 186 (supr a) and observatio ns contained in the head note reads asunder:-
"The legislative history of a fiscal statute could be traced and considered to understand its scope. The courts are permitted to travel beyond the words used in a statute, to find out the purpose for which a particular provision is enacted; for this purpose, even the speech of the Finance Minister, while introducing the particular fiscal legislation could be looked into. The Circulars issued by the Central Board of Direct Taxes are not only binding on the Income-tax Department but are also in the nature of contemporanea exposition furnishing legitimate aid in the construction of a provision."
24. The Ld. counsel of the assessee had refe rred to the decision of Hon'ble Karnataka High Cour t in the case of Dinakar Ullal Vs. CIT (supra) and decision of Hon'ble Supreme cour t in the case of Commissione r of Central Excise V s. M/s Rattan Melting & Wire (supra) for the proposition that since circulars are no t binding on the Cour ts, the refo re, the same should n ot be considered f or inte rpr e tatio n of a par ticular provision. A s far as the decision in the case of Commissioner of C entr al Exc ise V s. M/ s Rattan Melting & Wire (supr a) is conce rned, this doe s not suppo rt the pr opo sitio n made by the Ld. Counsel for the assessee. In that case the questio n was whether a circ ular issued by the Depar tment which is generally binding o n the author ities wo uld take pr ecedence ove r the inter pre tation made by the Supreme Cour t or H igh C our t in r espect of particular pr ovis ion. The Para 6 6 of this j udgment make this po int absolute ly clear a nd re ads as under:-
"6. Circulars and instruc tions issued by the Bo ard are no doubt binding in law on the author ities under the r espective statutes, but when the Supreme Co urt or the H igh C our t declare s the law on the que stion ar ising f or consideration, it would not be appro priate for the Court to dir ect that the circular should be give n effect to and no t the view expre ssed in a dec isio n of this Co ur t or the High Co ur t. So far as the clarif ications/circulars issued by the Centr al Government and of the State Government ar e concerned they represent mere ly the ir under standing of the statutor y pr ovisio ns. They are no t binding upon the cour t. I t is f or the Co ur t to declare what the par ticular provision of statute says and it is no t for the Executive. Look ed at form ano the r angel, a circular which is contrary to the statuto ry provisions has really no existe nce in law ."
The above shows that circulars are not binding on t he Cour t but the Court has right to look at the Circular and ultimately meaning of a provisio n as interpre ted by the Cour t would prevail in comparison to the interpretation give n in the c ircular . Therefor e, if Circular is contrar y to a pro vision as inter pre ted by the C our t then the o pinion of the Court would pre vail. T his decision now here lays down that circulars canno t be consider ed for inte rpre tation of a par ticular pro vision.
25. In the case of Dinakar Ullal vs CIT 323 ITR 452(Karnataka), the assesse e was a C ivil contr acto r and had f iled belate d re turn declar ing income of Rs. 50,240/- and was claiming ref und of Rs. 2,14,505/- on account of tax deduc ted at so urce. The last date of filing the re turn was 31.3.1997 but the retur n was filed late on 8 t h Se ptembe r 1997. The assessee sought condonatio n of delay by an application filed on 21 s t Se pt, 1998 by invok ing sec tio n 119(2)(b) of the Act which was initially rejec ted. Howeve r, on a writ petition the or de r for r ejection w as quashe d b y a single judge and remitted the matter back for fre sh consideration. On remand, the C ommissioner who was vested with the jur isdiction under I nstruc tio n No.1 3 of 2006 in r espec t o f claim upto Rs. 10 lakhs accepted the cause show n for delay in f iling the re turn but denie d intere st on ref und amount in view of the conditio n set o ut in C ircular No . 670 dated 26 t h Oct 1993. Therefor e, question before the C our t was whethe r these instructions were contrar y to the provision of sec tio n 244A of the Ac t which pr ovided fo r payment o f inte rest o n ref unds. This beco mes absol ute ly clear from the question fr amed by Hon'ble Cour t which is co ntaine d at placitum 6 and re ads as under:-
"(i) Whether the condition to deny interest on refund amount due to an assessee under the Act, while admitting an application to condone the delay in making a claim for belated refund 7 under section 237 of the Act, as contained in Instruction No. 12 of 2003 dated October 30,2003 and 13 of 2006 dated January 22,2006, of the Board, is inconsistent with sub-
section (2) of section 244A of the Act?
(ii) Whether in the facts and circumstances, the respondent was justified in denying interest on belated refund claimed for the assessment year 1995-96, by the order impugned."
26. The Hon'ble Co ur t disc usse d the matter and ultimate ly held that assessee was e ntitle d to interest u/ s 244A and Circular No. 670 was contrar y to the pro visio ns of sec tio n 244A. The cour t also obser ved that circ ular could be issued to clari fy the pro visions for removing the difficulties. T heref ore, it is clear that questio n whethe r a circular can be considered in interpr etation of a par ticular pr ovisio n was never bef ore the Court and the refore , in our opinion, this judge ment doe s no t suppo rt the propo sition that circular canno t be conside red for the purpo se of inte rpre ting the par ticular pro vision.
27. It will be useful to state another ve ry well se ttled princ iple of inter pre tatio n i.e . whenever the particular provision is r equired to be interpre ted, it sho uld be inter pre ted af ter reading the who le pr ovision and not the parts of a par tic ular section. However, a provisio n has to be read in conte xt of the overall scheme of the Act. I t is also we ll se ttled that no pro vision can be interpreted in such a way which would rende r par ts of the section o tiose o r meaningle ss.
28. Having considere d the princi ple s of inte rpre tatio n abo ve, let us consider the pr ovision of sec tion 80IC in the light of the above princi ple s laid down by the Hon'ble Supreme Cour t. Section 80IC reads as unde r:-
Section 80IC "80-IC (1) Where the gross total income of an assessee includes any profits and gains derived by an undertaking or an enterprise from any business referred to in sub-section (2), there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction from such profits and gains, as specified in sub-section(3).
(2) This section applies to any undertaking or enterprise,-
(a) which has begun or begins to manufacture or produce any article or thing, not being any article or thing specified in the Thirteenth Schedule, or which manufactures or produces any article or thing, not being any article or thing specified in the Thirteenth Schedule and undertakes substantial expansion during the period beginning.
(i) on the 23rd day of December, 2002 and ending before the 1st day of April, [2007], in any Export Processing Zone or Integrated Infrastructure Development Centre or Industrial Growth Centre or Industrial Estate or Industrial Park or Software 8 Technology Park or Industrial Area or Theme Park, as notified by the Board in accordance with the scheme framed and notified by the Central Government in this regard, in the State of Sikkim; or
(ii) on the 7th day of January, 2003 and ending before the 1st day of April, 2012, in any Export Processing Zone or Integrated Infrastructure Development Centre or Industrial Growth Centre or Industrial Estate or Industrial Park or Software Technology Park or Industrial Area or Theme Park, as notified by the Board in accordance with the scheme framed and notified by the Central Government in this regard, in the State of Himachal Pradesh or the State of Uttaranchal; or
(iii) on the 24th day of December, 1997 and ending before the 1st day of April, 2007, in any Export Processing Zone or Integrated Infrastructure Development Centre or Industrial Growth Centre or Industrial Estate or Industrial Park or Software Technology Park or Industrial Area or Theme Park, as notified by the Board in accordance with the scheme framed and notified by the Central Government in this regard, in any of the North-Eastern States;
(b) which has begun or begins to manufacture or produce any article or thing, specified in the Fourteenth Schedule or commences any operation specified in that Schedule, or which manufactures or produces any article or thing, specified in the Fourteenth Schedule or commences any operations specified in that Schedule and undertakes substantial expansion during the period beginning-
(i) on the 23rd day of December, 2002 and ending before the 1st day of April, [2007], in the State of Sikkim; or
(ii) on the 7th day of January, 2003 and ending before the 1st day of April 2012, in the State of Himachal Pradesh or the State of Uttaranchal;
or
(iii) on the 24th day of December, 1997 and ending before the 1st day of April, 2007, in any of the North-Eastern States.
(3) The deduction referred to in sub-section (1) shall be -
(i) in the case of any undertaking or enterprise referred to in sub-clauses (i) and (iii) of clause
(a) or sub-clauses (i) and (iii) of clause (b), of sub-section (2), one hundred per cent of such profits and gains for ten assessment years commencing with the initial assessment year;
(ii) in the case of any undertaking or enterprise referred to in sub-clause (ii) of clause (a) or 9 sub-clause (ii) of clause (b), of sub-section (2),one hundred per cent of such profit and gains for five assessment years commencing with the initial assessment year and thereafter twenty-five per cent (or thirty per cent where the assessee is a company) of the profits and gains.
(4) This section applies to any undertaking or enterprise which fulfils all the following conditions, namely:-
(i) it is not formed by splitting up, or the
reconstruction, of a business already in
existence:
Provided that this condition shall not apply in respect of an undertaking which is formed as a result of there-establishment, reconstruction or revival by the assessee of the business of any such undertaking as is referred to in section 33B, in the circumstances and within the period specified in that section;
(ii) it is not formed by the transfer to a new business of machinery or plant previously used for any purpose.
Explanation.- The provisions of Explanations 1 and 2 to sub- section (3) of section 80-IA shall apply for the purposes of clause
(ii) of this sub-section as they apply for the purposes of clause
(ii) of that sub-section.
(5) Notwithstanding anything contained in any other provision of this Act, in computing the total income of the assessee, no deduction shall be allowed under any other section contained in Chapter VIA or in section 10A or section 10B, in relation to the profits and gains of the undertaking or enterprise.
(6) Notwithstanding anything contained in this Act, no deduction shall be allowed to any undertaking or enterprise under this section, where the total period of deduction inclusive of the period of deduction under this section, or under the second proviso to sub-section (4) of section 80-IB or under section 10C, as the case may be, exceeds the assessment years.
(7) The provisions contained in sub-section (5) and sub- sections(7) to (12) of section 80-IA shall, so far as may be, apply to the eligible undertaking or enterprise under this section. (8) For the purposes of this section,-
(i) "Industrial Area" means such areas, which the Board, may, be notification in the Official Gazette, specify in accordance with the scheme framed and notified by the Central Government;
(ii) "Industrial Estate" means such estates, which the Board, may, by notification in the Official Gazette, specify in accordance with the scheme 10 framed and notified by the Central Government.
(iii) "Industrial Growth Centre" means such centres, which the Board, may, by notification in the Official Gazette, specify in accordance with the scheme framed and notified by the Central Government;
(iv) "Industrial Park" means such parks, which the Board, may, by notification in the Official Gazette, specify in accordance with the scheme framed and notified by the Central Government;
(v) "Initial assessment year" means the assessment year relevant to the previous year in which the undertaking or the enterprise begins to manufactures or produce articles or things, or commences operation or completes substantial expansion;
(vi) "Integrated Infrastructure Development Centre" means such centres, which the Board, may, by notification in the Official Gazette, specify in accordance with the scheme framed and notified by the Central Government
(vii) " North-Eastern States" means the States of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland and Tripura;
(viii) " Software Technology Park" means any park set up in accordance with the Software Technology Park Scheme notified by the Government of India in the Ministry of Commerce and Industry;
(ix) "Substantial expansion" means increase in the investment in the plant and machinery by at least fifty per cent of the book value of plant and machinery (before taking depreciation in any year), as on the first day of the previous year in which the substantial expansion is undertaken;
(x) "Theme Park" means such parks, which the Board, may, by notification in the Official Gazette, specify in accordance with the scheme 11 framed and notified by the Central Government.
29. Sub sec tion (1) of the abo ve provision is a ge neral provision and does not require any interpretatio n. Sub Section [2] is the enabling pro visio n which pro vide s for the type s of under takings and circ umstances whe re deductio n under sec tio n 80IC would be allo wed. It allow s deductio n to vario us under takings w hich have either begun o r begins manufacturing of any article or things not be ing any ar ticle or thing specif ied in Schedule x iii and also under take s substantial expansion. These deductions were available in differe nt states during diff erent window pe rio ds which have bee n refer red to in clause (i), (ii) &
(iii) of this sub section. The contentio n on be half of the asse sse e is that since deduc tio n is available to the under taking which under takes substantial expansion and since there is no re stric tio n in this sub sec tio n itse lf, the refo re, the deduction was available on substantial ex pansion by old under takings as we ll as new under takings during the window period. H owever, ther e is no force in this inte rpre tatio n. Sub section (2 ) begins with the expre ssion "this sectio n applie s to any unde r tak ing o r enterprise which has begun o r be gins" this itself shows that p rovision made even the ex isting unde rtak ings e ntitled for the deduction because the e xpre ssion 'begun' would refer to the undertaking which were alre ady ex isting and began the manuf acture before the window perio d mentione d in the sub sec tio n. The last line of the sub section r eads "and undertakes substantial e xpansio n during the perio d beginning........". This wo uld naturally refe r to the under taking which wer e alr eady ex isting. If it is read the way the Ld. counsel of the assessee would like us to read then the provision would beco me unworkable because if there is an under taking which is e stablishe d during the window period then the same canno t possibly under take s substantial expansion also simultaneously. T he expre ssion 'and" w ould refer t o the cumulative co ndition that is both parts of the conditio ns need to be complied. The ex pr ession 'and' can be jo ined o nly w ith the expre ssion 'begun' . This is because 'begun' refers to something which has already star ted in the past w here as 'be gi ns' conno te s something which would commence in the pre sent. There fore, the expre ssion 'and' can be correlated only with e xisting unit because as we have alr eady se en a new unit which has bee n se t up and begins pro duction canno t simultane ously under go sub stantial expansio n also so as to become eligible for deduction under this section.
30. At this stage, it can be said that sec tio n has some confusion and some ef fort is requir ed to understand the cor rect intention of the Legislatur e by k eeping vario us princ iple s of interpr etation. Theref ore, var ious pr inciple s of inte rpr etation needs to be looked into . This provision w as br ought into the statute indisputably in the light of the " incentive package"
anno unced by the Unio n Cabine t. T hro ugh this ince nt ive package not only income tax co ncession but excise co ncessions and some subsidies like tr anspo rt subsidy and capital subsidy were also provided to var ious industr ies in the hilly stated comprising state s of Himachal Pradesh, Uttar anchal, Sikkim and No rth- Eastern states to bo ost the economie s of these hill y states. Circular No.7 was issued by the CBDT o n 5.9.2003 in this re spec t and the C ircular reads as under:-12
"Circular No. 7/2003 dated 05.09.2003
49. New provisions allowing a ten years tax holiday in respect of certain undertakings in the States of Himachal Pradesh, Sikkim, Uttaranchal and North- Eastern States.
49.1 The Union Cabinet has announced a package of Fiscal and non-fiscal concessions for the special category States of Himachal Pradesh, Uttaranchal, Sikkim and North-Eastern States, in order to give boost to the economy in these States. With a view to give effect to these new packages a new section 80- IC has been inserted to allow a deduction for ten years from the profits of new undertaking or enterprise or existing undertakings or enterprises on their substantial expansion, in the States of Himachal Pradesh, Uttaranchal, Sikkim and North- Eastern States. For this purpose, substantial expansion is defined as increase in the investment in the plant and machinery by at least 50% of the book value of the plant and machinery (before taking depreciation in any year), as on the first day of the previous year in which the substantial expansion is undertaken.
49.2 The section provides that the deduction shall be available to such undertakings or enterprises which manufacture or produce any article or thing, not being any article or thing specified in the Thirteenth Schedule and which commence operation in any Export Processing Zone, or Integrated Infrastructure Development Centre or Industrial Growth Centre or Industrial Estate, or Industrial Park, or Software Technology Park or Industrial Area or Theme Park, as notified by the Board in accordance with rules prescribed in this regard. Similar deduction shall be available to thrust sector industries, as specified in the Fourteenth Schedule.
49.3 The amount of deduction in case of undertakings or enterprises in the States of Sikkim, and the North- Eastern States shall be one hundred per cent of the profits of the undertaking for ten assessment years. The amount of deduction in case of undertakings or enterprises in the States of Uttaranchal, Himachal Pradesh shall be one hundred per cent of the profits of the undertaking for five assessment years, and thereafter twenty-five per cent (thirty per cent for companies ) for the next five assessment years. 49.4 The section also provides that no deduction shall be allowed to any undertaking or enterprise under this section, where the total period of deduction inclusive of the period of deduction under this section or under section 80-IB or under section 10C, as the case may be, exceeds ten assessment years. Further, in computing the total income of the assessee, no deduction shall be allowed under any other section contained in Chapter VIA or in section 10A or 10B, in relation to the profits and gains of the undertaking or enterprise.
49.5 A new Thirteenth Schedule has been inserted in the Income-tax Act to specify the list of articles and things, which are ineligible for the purpose of 13 deduction under section 80-IC. Further, a new Fourteenth Schedule has also been inserted, which specifies the list of articles and things, being thrust sector industries, which are eligible for the purposes of availing deduction under this section. Consequent to theses amendments, the provisions of section 10C and sub-section(4) of section 80-IB have been made inoperative in respect of the undertakings or enterprises in the State of Himachal Pradesh or in North-Eastern region including Sikkim, with effect from the 1st day of April, 2004.
49.6 These amendments will take effect from 1st April, 2004 and will, accordingly, apply in relation to the assessment year 2004-05 and subsequent years.
31. The circular makes it clear that section 80IC was inser ted to give effect to the new pack age anno unced by the Unio n Cabinet. The Circular f urther clarif ies that this sec tion pr ovides for deduc tio n for a pe riod of 10 year s from the prof its of new under taking or enterprise or existing unde rtak ing or ente rpr ise on the ir substantial ex pansion (see highlighted por tio n of the circular). T he contention of the Ld. C ounsel of the asse ssee was that wor d 'existing' qualif ies o nly the undertaking or enter pr ises and doe s not mentio n any particular date for carrying out substantial ex pansio n. We f ind no merit in this contentio n. The word 'ex isting is def ine d in the dic tio nar ies ar e as unde r:-
32. Black Law D ictionary - 6 t h Edition:-
Exist : To live , To have lif e or animation To be i n pr esent f orce , Activity, or effect at a give n time, as in speak ing of " existing" contrac ts, creditors debts, laws, rights o r liens.
For us r elevant meaning would be 'T o be in pr esent for ce' As per Oxford Dictionary 'exist' is defined as under
Exist :
1 (not used in the progressive tenses) to be real; to be present in a place or situation: Does life exist on other planets? The problem only exists in your head, Jane. Few of these monkeys still exist in the wild. On his retirement the post will cease to exist. The charity exists to support victims of crime. 2- (on sth) to live, especially in a difficult situation or with very little money: We existed on a diet of rice. They can't exist on the money he's earning The abo ve definition clearly shows that 'ex ist' would refe r to something which is in f orce presently. 'Ex ist' would ge ner ally and in common sense r efers to some thing which is alre ady there . With reference to this pro visio n, this would refer to an under tak ing which was already pr e sent o n the date when this provision was introduced. In any case the no tification issued by the Govt. of India, Ministry of C ommerce and Industry, D epartmen t of Industrial Po licy and Promotion w hich is publishe d in the Gazette of India remo ved all the doubts. This notif ication is re levant because this was issued with refere nce to same package anno unced by the Unio n Cabine t of India for the development of the hilly states. Sectio n 5, reads as under;-
"Definitions:14
(a) .....
(b) .....
(c) Existing Industr ial Unit' means an industrial unit existing as on 7 t h January 2003.
(d) ..........
(e) .............
(f) ..."
Thus the definition given above makes it clear that ex isting Industrial Unit would mean an unit which ex isted on 7.1 .2003.
33. Even if the abo ve contr oversy is ignore d regar ding e xisting unit, the inte ntion of the Legislature beco me absol ute ly cle ar when sub section (2) is read alongw ith sub-se ction (3) of sec tio n 80IC. As no ted e ar lier , sub section (2) is e nabling pro visio n which provides fo r deduc tio n in certain kind of undertaki ngs, i.e. new unit se t up o r the existing units which carr ies out substantial expansio n dur ing the particular w indow pe rio d which ar e give n in clause s (i), (ii) & (iii) of sub section (2). T he sub section (3) provides fo r rates of deduction. It is usef ul to note that clause (i) of sub sec tio n (3) pro vides for 100% deductio n for a pe rio d of 10 asse ssment ye ars in c ases co vere d by sub clause ( i) & (iii) of clause (a) and sub clause (i) & (iii) of clause (b) . Now sub clause (i ) and (iii) of clause ( a) of sub section (2) refers to the window perio d in case of State of Sikkim, North-E astern S tates where as sub clause ( ii) refe rs to the window pe rio d in case o f State of Himachal Pradesh and State of Uttaranchal. Similar ly, sub clause
(i) & (iii) of c lause (b) refers to window perio d in case of State of Sikkim and Nor th-E aster States wher eas sub clause (ii) refe rs to the window period in case of S tate of Himachal Prade sh and Uttar anchal. Now clause (ii) of sub section (3) provides f or 100% deduction o n such pr o fits fo r five assessment years commencing with initial assessment year and there after 25% (or 30% where the assessee is a company) of the pr ofits and gains. Ther efore , it is abso lutely clear that in case of state of Sikkim and Nor th- Eastern state s, Legislature was ver y clear that in case of new under taking o r in case of substantial expanded under tak ing deduction is to be allowed @ 100% for whole of the te n years whereas in case of State of Himachal Prade sh and Uttaranchal the deduction was to be allowed @ 100% only for first five ye ars and there afte r it was only 25%. If the Le gislature wante d to extend the benef it in the case of substantial expan sio n separately then the rate of deductio n in the clause (i) & (ii) of sub section (3) would not have be en differ ent i.e . 100% for whole of the 10 year s in case of S tate of Sikk im & Nor th-Eastern state s unde r sub clause ( i) and for the state of H imachal Pr adesh & Uttaranchal under sub c lause (ii) 1 00% for first five years and there after 25% for nex t five ye ars. The concept of substantial expansion remains same under sub section (2) for both type s of state s i.e state of Sikk im and North-Easte rn states and State of Himachal Pradesh and Uttr anchal. If the ex tended benefit of substantial expansio n was to be separ ate ly allowe d in case of State of Himachal Pr adesh and State of Uttar anchal , then mea ning of substantial expansion as give n under sub section (2 ) which is same for the state of Sikkim and Nor th-Eastern state s become redundant. As no ted e arlier, the pr ovisio n canno t be inter pre ted in such a way that part of the section bec omes redundant or otiose. T herefo re, whatever do ubts may be ther e in sub sec tio n (2) when it is read with sub section (3), tho se doubts are totally 15 removed and it becom e absolute ly clear that rate of deduction has to be 100% for fir st 5 year s and 25% the re after.
34. There is a fo rce in the contention of Ld. CIT/D R that if the interpr etation contended on behalf of the asse ssee was to be adopted the n Sub Sec tion (4) of Section 80IC would also become redundant. S ub Section (4) clearly provide s that the de duction is available to any under taking or enter prise which is no t formed by splitting or reconstruction of the business alr eady in ex istence or it is no t formed by transfer to new business of machiner y or plant previously used f or any pur pose . Fur ther the explanatio n to this Sub Section make s it clear that E xplanation 1 & 2 of Sub Section (3) of Section 80IA are applicable in this respe ct. Explanation 2 of Sub Section (3) of Sec tion 80 IA reads as unde r:
"Explanatio n 2- Wher e in the case of an [unde rtaking], any machiner y o r plant or any par t the reof previously use d for any purpose is transfe rred to a new business and the total value of the machiner y o r plant or par t so tr ansfe rred does not exceed twe nty pe r cent of the to tal value of the machiner y o r plant used in the busine ss, then, for the pur pose s of clause (ii) of this sub- section, the co ndition specified there in shall be deemed to have been complie d with."
From the above it bec omes clear that if 20% of the Machine ry from the old unit was used in the new unit then such unit wo uld not be eligible fo r de duction under this Sec tio n that is section 80IC. Now for carr ying out substantial expansion the inve stment in Plant & Machiner y is require d to be made by atle ast 50%. So if 50% fresh machinery is adde d to the new unit the n i t will vio late Sub Sectio n (4) of Section 80IC, ther efore, inte rpre tation canvassed on behalf of the asse ssee is no t possible because Section 80IC(4) would become redundant and such an interpr etation is not po ssible.
35. Fur the r, sub sec tio n (6) provides that in no c ase the to tal perio d of deduc tio n co uld excee d the pe rio d of 10 years including deduction availed under sub section (4) of section 80IB and section 10A and 10B. It was contende d before us that since ther e is no re stric tio n in carr ying o ut of substantial ex pansion in the new units and as such substantial expansion can be carr ied out any numbe r of tim es. If this inter pre tation is accepted then sub sec tio n (6) would be rende red o tio se or meaning less because if a unit was se t up o n the commencement of this sec tion and the same claims deduction @ 100% and late r o n ever y fiv e ye ars a substantial expansion is car ried out then according to the interpr etation canvassed on be half of the asse ssee, such unit would again become e ntitled to 100% deduc tion f or ano the r f ive year s and fur ther blo ck of five years ever y time substantial expansio n is carrie d out. If this inter pre tation is ado pte d the n deduction would bec ome almost perce ptual as lo ng as the asse ssee has carried o ut substantial expansion but in that c ase sub section (6) would loose its meaning. S uch an un limited per iod of deduction w ould no t be in consonance of law. At the co st of repe titio n, we wo uld like to emphasize that no principle of interpr etation can be adopted which leads to a situ ation w here a 16 par ticular par t of the section becomes to tally redundant. In f act tho ugh it was contended that in the pre sent case (i.e. in case of Hycron E lectronics) de duction has be en claimed only of 10 ye ars but o n the date of he aring some other appe als were also listed wherein the deductio n was claimed for m ore than 10 years adopting the same contentio n which has been made before us. In case of M/s Mahavir I ndustr ies (ITA No . 127/Chd/2011 and ITA No. 791/Chd/2012) though tho se case s wer e adjo urne d because some other issue s were also the re but in those two case s assessee had commenced the operation o n 8.5.1997 and claimed de duction u/s 80IB from asse ssment years 1998-99 to 2005-06. Later on, substantial expansion was carr ied o ut in asse ssment year 2005-06 and on the basis of the conte ntion that assesse e is allowe d to carry out any numbe r of expansio ns, deduc tion was claimed f or the 12 t h year for asse ssment ye ar 2009-10 (We may clarif y that reference to these case s is made bec ause o f particular contentio n and we are no t expre ssing any opinion on the merits of these appeals her e). Ther efo re, the contentio n of the assessee that any number of expansions are allowed is not possible in view of the restric tio n given in sectio n 80IC(6).
36. The abo ve situatio n as po inted by the R evenue also becomes clear if the pr ovision of section 80IC is compared to the provision of sec tio n 8 0IB(4). Relevant pro vision of Sec tio n 80IB (4) reads as under:-
"(4) The amount of deduction in the case of an industrial undertaking in an industrially backward State specified in the Eighth Schedule shall be hundred per cent of the profits and gains derived from such industrial undertaking for five assessment years beginning with the initial assessment year and thereafter twenty-five per cent (or thirty per cent where the assessee is a company) of the profits and gains derived from such industrial undertaking:
Provided that the total period of deduction does not exceed ten consecutive assessment years (or twelve consecutive assessment years where the assesee is a company-operative society) subject to fulfillment of the condition that it begins to manufacture or produce articles or things or to operate its cold storage plant or plants during the period beginning on the Ist day of April, 1993 and ending on the 31st day of March, [2004]:
Provided further that in the case of such industries in the North- Eastern Region, as may be notified by the Central Government, the amount of deduction shall be hundred per cent of profits and gains for a period of ten assessment years, and the total period of deduction shall in such a case not exceed ten assessment years:
Provided also that no deduction under this sub-section shall be allowed for the assessment year beginning on the 1st day of April, 2004 or any subsequent year to any undertaking or enterprise referred to in sub-section (2) of section 80-IC."
37. The careful pe rusal of the above provision would show that before the intr oduc tio n of section 80IC which is before us for consideration, the deduction to the bac kward states was available in te rms of section 80IB(4). The third p roviso make s it clear that af ter 31.3.2004, this de duction will be available only u/s 80IC. T he sub sec tio n fur the r makes it clear that deduc tio n 17 would be @ 100% for the fir st five years and there after @ 25%. Fur the r, the fir st pro viso makes it clear that deduction w ill no t exceed 10 consecutive assessment year s. The second proviso further mak es it clear that in the case of states of Nor th- Easter n regio ns, the deduc tion would be @ 100% for all the 10 year s. Thus, even in the e arlier provision only in c ase of Nor th-Easter state s, the deduc tio n o f 100% was allowable f or 10 years w hereas in the case of states of Himachal Pradesh, the deduction was allow able @ 100% for first five year s and 25% for nex t f ive year s.
38. Fur the r, it should be noted that sub section ( 6) starts with non obstante clause and the refor e, in no case the d educ tio n could be for per iod exceeding 10 year s and in this regar d we may no te that even the Ld. authors in the ir Commentar y of Income Tax Laws By C hatur vedi & Pithisar ia' s - S ixth Editio n has ex pre ssed the same opinion. The relevant e xtract at pages 6351 of the commentary reads as under;-
"No deduction possible for more than 10 assessment years.- Section 80-IC(6) also opens with a non obstante clause " Notwithstanding anything contained in",and provides that no deduction shall be allowed to any undertaking or enterprise under section 80-IC, - where the total period of deduction inclusive of the period of deduction -
- under section 80-IC, or
- under the second proviso to section 80-IB(4) or
- under section 10C as the case may be, exceeds 10 assessment years."
39. Lastly, it was contended that initial assessment ye ar as define d in clause (v) of sub section (8) of section 80IC uses the expre ssion 'or ' the refo re, it can be construe d that it relates to both situations separ ate ly i.e. for new unit and su bstantial expanded unit. We find no fo rce in this contention. The initial asse ssment ye ar has been def ine d and the expre ssion 'o r' has been used in respec t of new units by stating 'commences operation' or 'complete substantial ex pansion' . Here the expre ssion ' or' is to be read as a mutually exclusive e xpr ession which refer s to a particular situation by excluding the o ther situatio n. Ther efore, initial assessment year woul d clear ly commence eithe r o n commencement of oper ation or at completion o f substantial expansion of ex isting uni t. In any case the wo rd 'initial' cannot be used twice by r eferri ng to series of events. This can be understood with a ver y sim ple example. Let us say a pe rso n 'A' passes o ut his examination of LLB and ge t employe d as Legal Officer in an organiz ation. Later on, he quits the job and star ts the practice in le gal pr ofe ssio n and ultimately he is e levate d as a Judge. T hen in suc h a situation it canno t be said that initially 'A' was working in a o rganizati on and the n initially he was in the profe ssion and the n e levated as a Judge . Initially can be use d o nly once as a matte r of usage of English language . Therefo re, r eading of the above pr ovision clear ly shows that intentio n of the le gislature w as very c lear to allow 100% for first five year s in case of units situated in the State of Himachal Pradesh (since all the c ases befor e us are situated in the State of Himachal Pradesh) and ther eaf ter 25% deduction fo r another f ive year s on the new units or the existing units where substantial expansio n was carr ied out.
1840. It has also been co nte nded that incentive pr ovision sho uld be constr ued libe rally. Further, it w as co nte nded w ith refe rence to the dec ision of M/s Novapan India L td vs Collec tor of C entral Excise and Customs (supra) by the Revenue is not correc t because that pr ovisio n was rendered under I ndirect T ax Act. We find no force in the se submissions. E ver y decisio n of the Hon'ble S upreme Cour t or for that matter of any H igh Court has to be see n for the ratio laid down in a particular decisio n and it doe s no t matter under which particular Act such pr inciples has been dec ided. No doubt the incentive provisio ns are require d to be inte rpre ted libe rally but in case of M/s Novapan India Ltd v C ollecto r of Centr al E xcise and Customs (supra), it was observed as unde r:-
" The learned counsel for the appellant then contended that since there is an ambiguity about the meaning and purport of item-6 of the table appended to the Exemption Notification, the benefit of such ambiguity should go to the assessee manufacturer and the entry must be construed as taking in the MFPBs as well. It is not possible to agree with this submission.
In Mangalore Chemicals& Fertilizers Ltd.. v. Deputy Commissioner of Commercial Taxes & Ors., [1992) Suppl. 1 S.C.C, 21, a Bench of this Court comprising M.N. Venkatachaliah, J. (as the learned Chief Justice then was) and S.C Agrawal, J. stated the relevant principle in the following words:
"Shri Narasimhamurty again relied on certain observations in CCE v. Parle Exports (P)Ltd. [1989] 1 SCC 345, in support of strict construction of a provision concerning exemptions. There is support of judicial opinion to the view that exemptions from taxation have a tendency to increase the burden on the other un- exempted class of tax payers and should be construed against the subject in case of ambiguity. It is an equally well known principle that a person who claims an exemption has to establish his case. Indeed, in the very case of Parle Exports (P) Ltd. relied upon by Shri Narasimhamurthy, it was observed.
"While interpreting an exemption clause, liberal interpretation should be imparted to the language thereof, provided no violence is done to the language employed. It must, however, be borne in mind that absurd results of construction should be avoided."
The choice between a strict and a liberal construction arises only in case of doubt in regard to the intention of the legislature manifest on the statutory language. Indeed, the need to resort to any interpretative process arises only where the meaning is not manifest on the plain words of the statute. It the words are plain and clear and directly convey the meaning, there is not need for any interpretation."
"We are, however, of the opinion that, on principle, the decision of the Court in Mangalore Chemicals - and in Union of India v. Wood Papers, referred to therein - represents the correct view of law. The principle that in case of ambiguity, a taxing statute should be construed in favour of the assessee - assuming that the said principle is good and sound- does not apply to the construction of an exception or an exempting provision;19
they have to be construed strictly. A person invoking an exception or an exemption provision to relieve him of the tax liability must establish clearly that he is covered by the said provision. In case of doubt or ambiguity, benefit of its must go to the State".
The Hon'ble Supreme Court in Orissa State Warehousing Corporation's case (supra) has laid down that "While it is true that in the event of there being any doubt in the matter of interpretation of a fiscal statute, the same goes in favour of the assessee, but the fact remains and the law is well-settled on this score that in the matter of interpretation of the taxing statutes the law courts would not be justified in introducing some other expressions which the legislature thought fit to omit. In the present context, there is no doubt as to the meaning of the words used in the section by reason of the language used, neither there is any difficulty in ascertaining the statutory intent. Incidentally, it cannot but be said that an exemption is an exception to the general rule and since the same is opposed to the natural tenor of the statute, the entitlement for exemption, therefore, ought not to be read with any latitude to the tax-payer or even with a wider connotation."
41. Therefor e, it becomes clear that liber al inte r pretation o f an incentive provision is po ssible if there is any doubt. As we have seen above that if vario us sub sections of section 80IC are read carefully it leave s no doubt that de duc tio n was meant only for new units or in case of old units if substantial expansion was carrie d out in such old units and de duction was available o nly for a period of 10 year s. Therefore , the re is no questio n of giving any inte rpre tation much less liber al inte rpre tation to sec tion 80IC when the reading of whole sec tio n makes the provisi on ve ry clear. As obse rve d in case of M/s Novapan India Ltd v C ollecto r of Centr al E xcise and C ustoms (supra) the burden was on the asse ssee to show under whic h clause he w as e ntitled to the deduction but assessee is simply asse rting bef ore us that the re is no restric tio n for deductio n in case of substantial expansion of new units. In our opinion, that is no t enough because absence of restric tio n doe s no t mean that particular deduc tio n was allow able .
42. We also find force in the submissions of Ld. CIT-DR that if interpr etation given by the asse ssee is to be accepted, the provision wo uld bec ome discr iminator y f or two c lasses of under takings i.e . new units and o ld units. Because the o ld units would be e ntitled to 1 00% deduction on expansion f or f irst f ive year s and 25% the reaf ter where as the new units would become entitled to de duction f or 100% for fir st five year s and again @ 100% on substantial expansio n. Such discr iminator y intention canno t be imputed to the Legislature .
43. Before us, re liance was also place d on the dec isio n of Delhi Bench of the Tribunal in the case of Tr iputi LPG Industr ies L imite d Vs. DCIT(supr a). In this decision, the Bench has s imply o bse rved that main dispute is on the def inition of 'initial assessment year'. The provisions of sub section (2) and sub sec tion (3) as discussed in de tail abo ve have been to tally ignore d and, theref ore, this decision, in o ur o pinion, is per inquerim and c anno t be followed.
2044. The Ld. counsel has also relie d on the decisio n in the case of S.R. Par yavar an E nginee rs Pvt L td (supr a) of the Chandigarh Bench. The fac ts in that case are that assesse e has claimed deduction u/s 80IB in asse ssment year 1999-2000 @ 100% . The deduction was claimed @ 100% for five ye ar s and then deduction was claimed @ 30% o n the profits in the nex t year. The assessee under to ok substantial expansion in financial years 2004-05 & 2005-06 and claimed deduction at the r ate of 100% on the basis of such substantial expansio n in assessment ye ar 2006-07. However, the deduc tio n was wr ongly claimed u/s 80IB instead of section 80IC. The CIT( A) allowed the deduction by obser ving that deduction co uld no t be denied simply bec ause asse ssee has quo ted a wro ng sec tion. On the appe al filed by Re venue, the deduction was held to be allowable because substant ial expansio n was car rie d out in a unit which was alre ady in existence as o n 7.1.20 03. Therefo re, in o ur opinion, this decisio n does not pro vide any assistance to the case of the assesse e.
45. The Ld. Co unsel has also relied on the decisio n of Abhishek Bhargav AAR No. 1097 of 2011 (supra) . The facts in that case are that a par tner shi p f ir m namely M/s. Himac hal Powe r Products was formed on 23.05.2009. The firm commenced commercial production in March, 2010. Shri Abhishek B hargav while planning to jo in the firm as par tner by acquiring 20% share of profit and enhanc ing additio nal manufac tur ing facility by unde rtaking substantial expansion sought advance ruling o n the issue w hether the introduc tion of new par tner wo uld be tre ated as reconstruc tio n of the e xisting busine ss or the firm will be entitle d to the benef it of substantial ex pansio n as per the provisions of section 80IC(2)(a)(ii) if it starts commercial production bef ore 01.04.2012. The Autho rity held that the asse ssee w as e ntitled to the benef it of substantial e xpansion in terms of and to the ex tent provided by section 80IC of the Ac t if it star ts commercial production in the substantially expanded unit befor e 01.04.2012. In this c ase the asse sse shall be entitled to deduction of 100% of its prof its upto A.Y . 2014-15 since the initial asse ssment year was A.Y. 2010-11 and claim of deduction canno t be denied mere ly on the gr ound of expansion of manufacturing capacity so long it is not a case of re struc tur ing of business alr eady in e xistence . However, the que stion whether the assessee shall be entitled to deduction of 100% of its prof it eve n af te r A.Y. 2014-15 i.e. fo r 2 more year s beyond A.Y . 2014-15 is left ope n and no t decided by the AAR. Therefo re this decisio n is to tally distinguishable and does not hel p the case of the assessee.
46. The last dec ision re lie d on was in the case of Sinte x Industrie s L td v CIT ( supra) . I n this case the deduc tio n u/s 80IC was allowed by the A ssessing Office r but later on a revisionary order was passed u/s 263 of the Ac t. T he Benc h main ly dealt w ith the provision of sec tio n 263 and in view of the decision of Hon'ble Supreme Co ur t in the c ase of Malabar Industr ies C o L td v CIT 243 ITR 83 (SC) held that since view taken by the Assessing Officer is also possible view, the refore , assessment o rder was no t errone ous. In f act the Bench refer red to the decision of Delhi Bench in the case of Triputi LPG Industr ie s Limite d Vs. DCIT (supr a) without considering the provision of section 80IC in detail for re aching the conclusio n that it is one of the po ssible view. Since we have already discussed the dec ision of Tr iputi L PG Industrie s Limited V s. DCIT (supra) and found that all the provisions of the sec tion were no t discusse d in that section and 21 that is per inquerim, therefore, in o ur opinion, this order doe s no t help the case of the assesse e.
47. The last argument was in respect of column in Form No. 10CCB. The column 25 of Fo rm No. 10CCB reads as under:-
"25 (i) Whether the undertaking or enterprise is located in an area notified by the Board for the purposes of section 80-IC :---Yes ---No
(ii) If yes please indicate,-
a. Name of the Export Processing Zone / Integrated Infrastructure Development Centre / Industrial Growth Centre/Industrial Park/Estate/Software Technology Park/Industrial Area/Theme Park and the District/State in which located :--------------------
(b) Khasra No. of the undertaking or enterprise :--------------------
(Also indicate the Board's Notification No. )
(c) If the eligible business is new, please give the date of commencement of production or manufacture of article or thing. :---------------------
(d) If the existing business has undertaken substantial expansion, please specify,- :----------------------
(i) The date of substantial expansion
(ii) The total book value of plant and machinery (before taking depreciation in any year)as on first day of the previous year in which sub-
stantial expansion took place. :----------------
(iii) Value of increase in the plant and machinery in the year of substantial expansion. :----------------------
(e) Does the undertaking or enterprise manufacture or produce any article or thing specified in the Thirteenth Schedule.
:---Yes ---No
(If yes, please specify the article or thing) :-----------------------
(f) Does the undertaking or enterprise manufacture or Produce any article or thing specified in the Fourteenth Schedule.
:---Yes ---No (If yes, please specify the article or thing or operation):-------------------------"
48. The careful re ading of the fo rm in a ser ial order wo uld clearly show that the asse ssee is require d to inform the location of the Industr y and c olumn (c) specifically ask the asse ssee to state whether business is a new business? C olumn (d) cle arly ask the asse ssee whe ther existing busine ss has unde rtaken substantial ex pansio n, therefo re, the re are two categor ies of business and substantial expansion is possible only in case of existing business. In our o pinion, the Ld. C IT(A) has co rrec tly adjudicated this issue.
49. In view of the abo ve detailed discussio n we hold that the asse ssee bef ore us i.e. M/s Hyc ron Elec tronics in ITA No. 798/Chd/2012 is entitled to o nly 25% of deduction dur ing the prese nt year because the assesse e has alre ady availe d the per iod of full deduc tio n @ 100% in the earlier f ive ye ars i.e. f rom asse ssment ye ars 2004-05 to 2008-09. In this backgro und, we find nothing wrong with the orde r of Ld. CIT(A) and we uphold the same. Accordingly, assessee' s appeal is dismissed."
227. The facts of this case are similar to that of the case of Hycron Electronics, Baddi, Solan v ITO & others referred to above. Respectfully following the order of the Tribunal in the case of Hycron Electronics, Baddi, Solan v ITO & others (supra), we do not see any merit in this appeal. Accordingly, we dismiss the same.
8. In the result, appeal is dismissed.
Order pronounced in the Open Court on 18 t h February, 2016.
Sd/- Sd/- ( RANO JAIN) (H.L.KARWA) ACCOUNTANT MEMBER VICE PRESIDENT Dated: 18th February, 2016. 'Poonam' Copy to:
The Appellant, The Respondent, The CIT(A), The CIT,DR Assistant Registrar, ITAT/CHD