2017 (5) TMI 1579 - AT - Income Tax

Deduction under section 80IC - 100% claimed by the appellant in the sixth year of operation of new industrial undertaking - Held that - The issue addressed in the present appeal is identical to what has been decided in the case of Hycron Electronics Vs ITO. 2015 (6) TMI 725 - ITAT CHANDIGARH The assessee is a firm engaged in manufacturing of Mono and Master Cartons. The assessee has already claimed deduction under section 80IC of the Act to the extent of 100% eligible profit for five years period from assessment year 2007-08 to 2011-12. The assessee had again claimed 100% deduction against eligible profits in the relevant assessment year 2012-13 which was 6th year of production by claiming substantial expansion of the unit in assessment year 2010-11. Relying upon the aforesaid decision of the ITAT in the case of Hycron Electronics (supra) the claim was rejected by the lower authorities - accordingly respectfully following the precedent the appeal of the assessee is rejected.

Summary

Issues:
Claim of deduction u/s 80IC - Eligibility for 100% deduction - Interpretation of substantial expansion - Application of precedent set in 'Hycron Electronics Vs ITO' - Dismissal of appeal by CIT(A) based on precedent - Appeal against CIT(A) decision - Dismissal of appeal by ITAT Chandigarh.

Analysis:
The appeal was filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals), Shimla for the assessment year 2013-14. The issue in question was the claim of deduction u/s 80IC of the Act. The assessee had claimed 100% deduction against eligible profits in the relevant assessment year, which was the 9th year of production for the assessee. This claim was based on substantial expansion carried out in the financial year 2011-12. However, the Assessing Officer determined that the assessee was eligible for deduction u/s 80IC only at the rate of 25%, contrary to the assessee's claim of 100%.

During the hearing, both parties agreed that the issue addressed in the present appeal was identical to a previous decision by the Co-ordinate Bench in the case of 'Hycron Electronics Vs ITO'. The Ld. CIT(A), relying on the decision in the 'Hycron Electronics' case, dismissed the appeal of the assessee. The ITAT Chandigarh, considering the identical issue and the precedent set by the 'Hycron Electronics' case, upheld the decision of the CIT(A) and dismissed the appeal of the assessee. The ITAT Chandigarh concluded that since the issue on facts and law was the same as in the 'Hycron Electronics' case, the appeal of the assessee could not be sustained.

In summary, the ITAT Chandigarh, comprising Shri Sanjay Garg, Judicial Member, and Ms. Annapurna Gupta, Accountant Member, dismissed the appeal of the assessee against the order of the Ld. CIT(A) based on the precedent set in the 'Hycron Electronics' case. The decision was made on the grounds that the issue in question was identical to the one previously decided and covered by the Tribunal, leading to the dismissal of the appeal.