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TMI Blog2018 (1) TMI 1494X X X X Extracts X X X X X X X X Extracts X X X X ..... eligible unit which was denied following the order of the ITAT in the case of Hycron Electronics [2015 (6) TMI 725 - ITAT CHANDIGARH] . The Hon ble High Court we find has set aside the order of the ITAT in the case of Hycron Electronics [2015 (6) TMI 725 - ITAT CHANDIGARH] ruling that the new undertakings set up after 07-01-2003 are entitled to deduction @100% of the profits on carrying out substantial expansion. In view of the above order of the Hon ble Himachal Pradesh High Court, we set aside the order of the CIT(A) and direct the AO to grant the assessee deduction of hundred percent of its eligible profits, as per the ruling of the jurisdictional High Court in this regard in the case of M/s Stovekraft India vs. Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;). 3. During the course of hearing before us, it was brought to our notice that the assessee in all the above appeals had been denied deduction u/s 80IC @ 100% of his profits ,claimed beyond the initial eligible period of five years on account of substantial expansion undertaken by it, following the order of the ITAT Chandigarh Bench in the case of Hycron Electronics vs ITO (2016) 69 Taxmann.com 69. It was pointed out that the said order of the ITAT had been decided in appeal by the Hon ble Himachal Pradesh High Court vide their order dt. 28 November 2017 in the group of cases with the lead case titled as M/s Stovekraft India vs. Commissioner of Income Tax, ITA No.20 of 2015, and the Hon ble High Court had decided the issue in fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2, an undertaking or an enterprise can be entitled to deduction @ 100% for a period of more than five years. (f) All this, of course, is subject to a cap of ten years. [Section 80-IC(6)]. (g) Units claiming deduction under Section 80-IC shall not be entitled to deduction under any other Section, contained in Chapter VI-A or Section 10A or 10B of the Act [Section 80- IB(5)]. 4. Ld. DR fairly admitted that the issue is squarely covered by the above decision of the Hon'ble Himachal Pradesh High Court. 5. We have heard both the parties and also gone through the order of the Hon ble Himachal Pradesh High Court in the case of Stovecraft (supra). Admittedly in all the above appeals the assessee was a ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce was not warranted. 5. That on the facts, circumstances and legal position of the case, CIT(A) was not justified in confirming the action of Ld. AO, whereby vide para 3 of his order, he erred in making the impugned disallowance of ₹ 1,50,00,000/- in respect of bad debt claimed as an expense by the appellant. ITA No. 1124/Chd/2017 4. That on the facts, circumstances and legal position of the case, the Worthy CIT(A) was not justified in partly confirming the action of Ld. AO, whereby addition of ₹ 5,60,000/- u/s 36(i){iii) was made even when the said disallowance was not warranted. 7. The assessee filed an application requesting admission of the above grounds, contending that they were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... VI-A of the Income-tax Act, 1961 ( the Act ), provides for deductions in respect of certain incomes. In computing the profits and gains of a business activity, the Assessing Officer may make certain disallowances, such as disallowances pertaining to sections 32, 40(a)(ia), 40A(3), 43B etc., of the Act. At times disallowance out of specific expenditure claimed may also be made. The effect of such disallowances is an increase in the profits. Doubts have been raised as to whether such higher profits would also result in claim for a higher profit-linked deduction under Chapter VI-A. 2, The issue of the claim of higher deduction on the enhanced profits has been a contentious one. However, the courts have generally held that if the exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Courts of Bombay, Gujarat and Allahabad have been accepted by the Department. 3. In view of the above, the Board has accepted the settled position that the disallowances made under sections 32, 40{aj{ia), 40A(3), 43B, etc. of the Act and other specific disallowances, related to the business activity against which the Chapter VI-A deduction has been claimed, result in enhancement of the profits of the eligible business, and that deduction under Chapter VI-A is admissible on the profits so enhanced by the disallowance. 4. Accordingly, henceforth, appeals may not be filed on this ground by officers of the Department and appeals already filed in Courts/ Tribunals may be withdrawn/ not pressed upon. The above may be brou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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