Income Tax Appellate Tribunal - Chandigarh
M/S Zenith International, Solan vs Dcit, Circle , Parwanoo on 26 March, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL
CHANDIGARH BENCHES 'A', CHANDIGARH
BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER &
Ms. ANNAPURNA GUPTA, ACCOUNTANT MEMBER
ITA No. 1594/Chd/2017
Assessment Year: 2014-15
M/s Shree Balaji Enterprises, Vs. The ITO, Baddi,
Near Micro Lab Limited, H.P.
Village-Katha, Baddi,
Himachal Pradesh
PAN No. ABPFD7709E
&
ITA Nos. 1596/Chd/2017
Assessment Year: 2014-15
M/s Zenith International, Vs. The ITO,
Village Brahmin Velly, Baddi, H.P.
Baddi, Nalagarh, Distt.Solan
Himachal Pradesh
PAN No. AACFZ4176G
(Appellant) (Respondent)
Appellant By : Sh. Manoj Kumar
Respondent By : Smt. Chanderkanta, Addl CIT.
Date of hearing : 26.03.2018
Date of Pronouncement : 26.03.2018
ORDER
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.
2. The sole issue raised in these appeals relates to the action of the C I T ( A ) i n d i s a l l ow i n g t h e c l a i m o f d e d u c t i o n @ 1 0 0 % u s 8 0 I C of t h e I n c o me - t a x A c t , 1 9 6 1 ( i n s h o r t 't h e A c t ') o n a c c o u n t o f s u b s t a n ti a l e x p a n s i o n o f t h e Un i t .
4. D u r i n g t h e c o u r s e o f h e a r i n g b ef o re u s , i t w a s b r o u g h t t o o u r n o t i c e t h a t t h e is s u e i n v o l v e d i n t h e s e a p p e a l s h a s a l r e a d y b e e n a d j u d i c a t e d b y t h e H o n ' b l e H i ma c h a l P r a d e s h H i g h C o u r t v i d e t h e i r o r d e r d t . 2 8 N o v emb e r 2 0 1 7 i n t h e g r o u p o f c a s e s w it h t h e l e a d c a s e t i t l e d a s M / s S t o v e k r a f t I n d i a v s . Co m mi s s i o n e r o f I n c o me T a x , I T A N o . 2 0 o f 2 0 1 5 , a nd i t w a s p o i n t e d o u t t h a t t h e H o n ' b le H i g h C o u r t h a d d e c i d e d t h e i s s u e in f a v o u r of t h e a ss e s s e e , h o l d i n g t ha t t h e r e i s n o b a r i n t h e s a i d s e c t i o n d e n yi n g t h e b e n e f i t of h u n d r e d p e rc e n t d e d u c t i o n t o new units undertaking substantial expansion. Our attention was drawn t o t h e r e l e v a n t c on c l u s i o n s of t h e Ho n ' b l e H i g h C o u r t i n t h i s re g a r d a t p a r a 5 5 o f t h e o r de r a s u n d e r :
"55.Thus, in view of the above discussion, these appeals a r e a l l o w e d a n d or d e r s p a s s e d b y t he A s s e s s m e n t O f f i ce r a s well as the Appellate Authority and the Tribunal, in the case o f e a c h o n e o f th e A s s e s s e s , a r e q u a s h e d a n d s e t a s i d e , holding as under:
(a ) S u c h o f t h o s e u n d e r t a k i n g s o r e n t e r p r i s e s w h i c h w e r e e s t a b l i s h e d , b e c am e o p e r a t i o n a l a n d f u n c t i o n a l p r io r t o 7 . 1 . 2 0 0 3 a n d h a v e u n d e r t a k e n s u b s t an t i a l e x p a n s i o n b et w e e n 7 . 1 . 2 0 0 3 u p t o 1 .4 . 2 0 1 2 , s h o u l d be e n t i t l e d t o b e ne f i t o f S e c t i o n 8 0 - I C o f th e A c t , f o r t h e p e ri o d f o r w h i c h t h e y w e r e n o t e n t i t l e d t o t h e b e n e f i t o f d e d u c t i on u n d e r S e c t i o n 8 0- I B .
(b ) S u c h o f t h o s e u n i t s w h i c h h a v e c o m m e n c e d p r o d u c t i o n after 7.1.2003 and carried out substantial expansion prior 1596& 1597/Chd/2017 -
Shree Bala Ji Enterprises & Zenith International , HP 3 t o 1 . 4 . 2 0 1 2 , w o u l d a l s o b e e n t i t l e d to b e n e f i t o f d e d u c ti o n a t d i f f e r e n t r a t e s o f pe r c e n t a g e s t i p u l a te d u n d e r S e c t i o n 80 - I C . (c ) S u b s t a n t i a l e x p a n s i o n c a n n o t b e c o n f i n e d t o o n e e x p a n s i o n . A s l o n g a s r e q u i r e m e n t o f S e c t i o n 8 0 - I C (8 ) (i x ) i s m e t , t h e r e c a n b e n u m b e r o f m u l t i p l e s u b s t a n t i a l e x p a ns i o n s . (d ) C o r r e s p o n d i n g l y , t h e r e c a n b e m o r e t h a n o n e i n i t i a l Assessment Years.
(e ) Wi t h i n t h e w i n d o w p e r i o d o f 7 . 1.2 0 1 3 u p t o 1 . 4 . 2 0 12 , a n u n d e r t a k i n g o r a n e n t e r p r i s e c a n b e e n t i t l e d t o d e d u c t io n @ 1 0 0 % f o r a p e r i o d o f m o r e t h a n f i v e ye a r s .
(f ) A l l t h i s , o f co u r s e , i s s u b j e c t t o a c a p o f t e n y e a r s . [ S e c t i o n 8 0 -I C (6 )] .
(g ) U n i t s c l a i m i n g d e d u c t i o n u n d e r S e c t i o n 8 0 - I C s h a l l n o t b e e n t i t l e d t o d e du c t i o n u n d e r a n y o t h e r S e c t i o n , c o nt a i n e d i n C h a p t e r V I - A o r S e c t i o n 1 0 A o r 1 0 B o f t h e A c t [ Se c t i o n 8 0 - I B (5 )] . "
5. L d . D R f a i r l y a d mi t t e d t h a t t h e i s s u e i s s q u a r e l y c o v e r e d b y t h e a b o v e d e c i s i o n of t h e H o n 'b l e j u r i s d i c t i o n a l H i g h C o u r t . I t w a s , however, s u b mi t t e d t h a t t h e i s s u e b e r e s t o r e d t o t h e f i l e o f t h e A s s e s s i n g o f f i c e r f o r v e r if i c a t i o n a s t o w h e t h e r t h e a s s e s s e e s h a v e actually carried out the substantial expansion to be entitled to claim d e d u c t i o n u / s 8 0 I C o f t h e A ct .
6. We d o n o t a g r e e t o t h e a b o v e c o n t e n t i o n r a i s e d b y t h e R e v e n u e at t h i s s t a g e . A p e r us a l o f t h e or d e r of t h e A s s e s s i n g o f f i c e r r e v e a l s t h a t t h e A s s e s s i n g of fi c e r h a s n o t d i s pu t e d t h a t t h e a s s es s e e s u n i t s ha v e c a r r i e d o u t s u b s t an t i a l e x p a n s i o n a s p r o v i d e d u n d e r cl a u s e ( b ) of s u b section (2) read with clause (ix) of sub section (7) of section 80IC of the Act. A l mo s t s i mi l a r v i e w h as a l s o b e e n ta k e n b y t h e H o n 'b l e H i ma c h a l P r a d e s h H i g h C o u r t i n t he c a s e of ' M / s S to v e k r a f t I n d i a v s .
1596& 1597/Chd/2017 -
Shree Bala Ji Enterprises & Zenith International , HP 4 C o m mi s s i o n e r o f I n c o me T a x ' ( s u p r a ) i n t h e f o l l o w i n g c o n c l u d i n g p a r a o f t h e o r de r : -
"58. On facts, we may clarify that the Revenue has not disputed, (a ) the units having carried out substantial e x p a n s i o n w i t h i n t h e d e f i n i t i o n of t h e S e c t i o n , (b ) t h e i r e n t i t l e m e n t a n d e xt e n t o f d e d u c t i o n w o u l d b e d e p e n d en t u p o n i n t e r p r e t a t i o n o f th e r e l e v a n t p r o v i s io n s . "
We , t h e r e f o r e , d o n o t f i n d a n y j u s t i f i c a ti o n a t t h i s st a g e t o g i v e t h e A s s e s s i n g o f f i ce r a s e c o n d i n n i n g s to r e - e x a mi n e u n d i s p u t e d f a ct s .
7. I n v i e w o f t h e ab o v e d i s c u s s i o n , t h e i mp u g n e d o r d e r s o f t he C I T ( A ) a r e s e t a s i d e a n d t h e A s s e s s i n g o f f i c e r i s di r ec t e d t o g r a n t t o t h e a s s e s s e e s d e du c t i o n a t t h e r a t e o f h u n d r e d p e rc en t o f i t s e li g i b l e p r o f i t s , a s p e r t h e r u l i n g o f t h e j u r i sd i c t i o n a l H i g h C o u r t i n t h i s r e g a r d i n t h e c a s e of ' M /s S t o v e k r af t I n d i a v s . C o m mi s s i o n e r o f I n c o me T a x ' (supra).
8. I n t h e r e s u l t , t he a p p e a l s of t h e a s s e s s e e , t h e r ef o r e , s t a n ds 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