2025 (2) TMI 659 - SCH - Income Tax

Claim of deduction @100% u/s 80IC - grant of incentives on substantial expansion of the unit - initial assessment year - fresh claim on undertaking substantial expansion from the year of completion of substantial expansion As decided by HC 2018 (9) TMI 2155 - PUNJAB HARYANA HIGH COURT as per order in M/S ADMAC FORMULATIONS 2018 (10) TMI 1001 - PUNJAB AND HARYANA HIGH COURT as relying on M/s Classic Binding Industries 2018 (8) TMI 1209 - SUPREME COURT dealing with the issue whether the assessee who had availed deductions at the rate of 100% for first five years on the ground that they had set up a manufacturing unit as prescribed under sub section (2) of Section 80IC of the Act can start claiming deduction at the rate of 100% again for the next five years as they had undertaken substantial expansion during the period mentioned in sub section (2) thereof. The answer was given in the negative. HELD THAT - The issue in question is now covered by the decisions of this Court in the case of M/s. Aarham Softronics 2019 (2) TMI 1285 - SUPREME COURT wherein the Court said that the decision rendered in Classic Binding Industries 2018 (8) TMI 1209 - SUPREME COURT is no longer a good law. Appeal succeeds and is hereby allowed. The impugned order passed by the High Court is set aside and those passed by the Revenue Authorities also stands set aside.

Summary

The Supreme Court granted leave in an appeal concerning the grant of incentives for 'substantial expansion' of a unit. The appellant, a proprietor of Himshell Industries, claimed a deduction under Section 80-IC of the Income Tax Act. Despite challenges before the CIT(A) and the Income Tax Appellate Tribunal, the claim was disallowed. The High Court upheld the decision, citing precedent. However, the Supreme Court overturned the High Court's decision, referencing a recent case law and allowed the appeal, setting aside the previous orders of the Revenue Authorities.