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TMI Blog2016 (9) TMI 203X X X X Extracts X X X X X X X X Extracts X X X X ..... giving an opportunity to the A.O. for representing revenue s view on it ? iii. That the order of the Ld. CIT(A) is erroneous and is not tanable on facts and in law. iv. That the grounds of appeal are without prejudice to each other. v. That the appellant craves leave to add, alter, amend or forgo any ground(s) of the appeal raised above at the time of the hearing. 2. Briefly stated facts of the case are that the assessee, an individual, was engaged in the business of manufacturing, processing and packing of food products (Glucon-D etc.) in the name and style of M/s Food and Healthcare Specialties from its factory at Batamondib, Ponta Shahib, Himachal Pradesh during the year under consideration. The profit from this unit by the assessee is subject to the deduction under section 80IC of the Income-tax Act 1961 (in short the Act ). The assessee filed original return of income declaring total income of ₹ 3,45,80,500/- on 25/09/2009. The case was selected for scrutiny and during the course of scrutiny proceedings, the assessee revised its return of income on 28/09/2011, declaring total income at ₹ 16,29,213/-. In the original return of income deductio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olic Springs Ltd, reported in 306 ITR 42 (Del), wherein it is held that that the Tribunal has power to allow the deduction to the assessee, to which it was otherwise entitled, even though no claim was made by the assessee in the return of income. Accordingly, he submitted the learned Commissioner of Income-tax(Appeals) has rightly allowed the deduction after considering decisions of Hon ble Apex Court, Hon ble jurisdictional High Court and various courts and Tribunal on the issue in dispute. 3.3 We have heard the rival submissions and perused the material on record including the paper book filed by the assessee. The Assessing Officer has denied the hundred percent deduction under section 80IC of the Act on the ground that the revised return in which the claim for hundred percent deduction was made, is not valid revised return. On this issue learned Commissioner of Income-tax (Appeals) after considering precedents available opined that the Assessing Officer is dutybound to assess the correct income and allow the claims/deductions as are admissible to the assessee, even if, omitted to be claimed by the assessee. Thus, there are two issues before our consideration. The first issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... first assessment year after substantial expansion was AY 2008- 09, for which appellant was allowed deduction @ 100% of the profit derived from his above unit, and appellant is therefore, entitled for 100% deduction of profits for further four assessment years including AY 2009-10. I have also noticed that there was extension of power load as well which was increased to 375 K.W. w.e.f. 2.7.2007 as against the existing loan of 175 K.W. 3.5 The learned counsel relied on the finding of the Tribunal in the case of Meetu Jain Vs. JCIT in ITA No. 5130/Del/2013 wherein the Tribunal has followed the ratio laid down in the case of Tirupati LPG Industry Limited Vs. DCIT (2014), 45 taxmann.com 326 (Delhi-Trib), and observed as under: 4. We have heard both the parties and have carefully perused the records of the case. In the case of M/s. Tirupati LPG Industries Ltd. in which one of us was party to the said decision we have held as under:- 10.1 As per sub-section (2) of section 80 IC deduction under this section is available to any undertaking or enterprises in the following two categories:- i. The undertaking or enterprises has begun or begins to manufacture or produce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on recognizes this fact and provides for an incentive, if an assessee undertakes substantial expansion . 10.5 The term 'substantial expansion' is stated in S.80- IC(8)(ix) requires investment in plant machinery exceeding at least 50% of the book value of plant and machinery ie. gross value before taking depreciation into account. If such substantial expansion is completed, then, for the purpose of this section, the Assessment Year relevant to the P.Y. in which such substantial expansion is completed becomes the initial assessment year. Once it becomes the initial Assessment Year consequently under sub section (3) the assessee would be entitled to 100% deduction of profits and gains for a period of 5 years commencing from such initial Assessment Year, and thereafter the % of deduction from profits come down The term initial year has been defined, as a year in which substantial expansion is completed. There is nothing to suggest that there cannot be a second initial year if a second substantial expansion is completed. Even if an existing unit which is claiming 80- IC, undertakes first substantial expansion then also the year of completion of the substantial expansi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visions, the ratio of the decisions of the Hon'ble Supreme Court in the case of Bajaj Tempo (supra), Gwalior Rayon Silk Mfg. Co. Ltd. (supra) have to be followed and benefit given to the assessee. We also make it clear that the deduction cannot be extended beyond the period of 10 years from the A. Y.2004-05. 5. Thus the ratio of the aforesaid decision is that even in case of substantial expansion of an eligible unit claiming deduction u/s 80C is allowable for a maximum period of 10 years from the inception. Therefore the claim of the assessee is valid in the eyes of law and is therefore is allowed. 3.6 We also find that learned Commissioner of Income Tax while disposing the proceedings under section 263 of the Act for assessment year 2010-11 has given finding that during the financial year 2007-08, corresponding to the assessment year 2008-09, the assessee made substantial expansion. The relevant finding of the Commissioner of Income Tax is reproduced as under: 2. Assessing Officer's proposal for rejecting the claim of 100% deduction u/s 80 SC of the IT Act on the ground that the substantial expansion has not been carried out based on the findings given by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cond issue in dispute for decision before us is whether the claim for deduction in a revised return which is filed after the statuary period prescribed under section 139(5) of the Act, can be allowed? 4.1 The learned Commissioner of Income-tax (Appeals) after referring to various decisions on the issue in dispute given his finding as under: ..Now the only issue and grievance of the appellant is that the Assessing Officer has not allowed 100% deduction u/s 80IC of the Act, on the basis of revised claim u/s. 80IC, as per revised return filed by him during the course of assessment proceedings, which according to the Assessing Officer was out of time, and beyond the period as prescribed under Section 139(5) of the Act. For the sake of convenience these provisions are reproduced as under:- [(5) If any person, having furnished a return under subsection (1), or in pursuance of a notice issued under sub-section (1) of section 142, discovers any omission or any wrong statement therein, he may furnish a revised return at any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uty bound to assess the correct income of the assessee as per provisions of the Act only. Therefore, I do not find any substance in the argument of the AO that just because the claim u/s 80IC was revised by the appellant during the course of assessment proceedings, and not by way of filing of a revised return as per provisions of section 139(5) of the Act, can be denied in any manner. AO is given power to assess and determine the correct income of any assessee being assessed by him as per provisions of the Act. The question remains whether the assessee is entitled to deduction u/s 80IC or not and if deduction is allowable u/ 80IC to the Assessee, then whether the same was to be allowed at 25% or 100%. As discussed supra, it is not the case of the AO that assessee had not carried out substantial expansion during the FY 2007-08. Therefore, even if the assessee would not have revised the claim or would not have revised the return, AO was duty bound to allow the correct claim as admissible to the assessee under the law, as it was not a fresh claim of any deduction claimed but it is a case where the deduction claimed inadvertently at a lower figure and therefore, I find substantial forc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ining the true figure of the assessee's taxable income and the consequential tax liability. Merely because the assessee fails to claim the benefit of a set-off, it cannot relieve the Income-tax Officer of his duty to apply section 24 (set off of loss etc) in an appropriate case. Hon ble Bombay High Court held in the case of Central Provinces Manganese Ore 112 ITR 734 held that the mere fact that such a deduction was not claimed before the Income-tax Officer is not of much importance, if the liability arises then a claim can be made bona fide at any stage before the higher authority, who is competent to grant relief. Hon ble Allahabad High Court held in the case of CIT vs. Lucknow Public Educational Society 318 ITR 223 (ALL) that the department should not take advantage of the ignorance of the assessee. Hon ble High Court held that the assessee was an educational institution registered under S.12A. It filed return claiming under s.10(23C). Later, it filed a revised return claiming exemption under s. 11, along with the requisite audit report and is entitled to exemption under section 11 and that exemption was the statutory exemption available to the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Assessing Officer is obliged to allow any claim of deduction , even though the assessee has not filed revised return, if otherwise the claim of assessee is admissible as per law. 4.3 Thus, we hold that the claim made by the assessee under section 80 IC of the Act for hundred percent deduction in the return of income filed on 28/09/2011 is allowable. The order of the learned Commissioner of Income Tax on the issue in dispute is well reasoned and we do not find any infirmity in the same. The ground No. 1 of the appeal is accordingly dismissed. 5. In ground No. 2, the Revenue has raised the issue that learned Commissioner of Income Tax (Appeals) has accepted the additional evidence under rule 46A of the Act without giving opportunity to the Assessing Officer. 5.1 During the course of hearing before us, the learned Senior Departmental Representative could not identify which documents or evidence are accepted by learned Commissioner of Income-tax (Appeals) under Rule 46A as there is no mention in the impugned order of accepting any additional evidences. As it is evident that no additional evidences have been accepted by learned Commissioner of Income-tax (Appeals), th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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