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TMI Blog2019 (5) TMI 781X X X X Extracts X X X X X X X X Extracts X X X X ..... ct") against the order dated 29.1.2018 (Annexure A-3) passed by the Income Tax Appellate Tribunal, Chandigarh Bench 'B', Chandigarh (hereinafter referred to as "the Tribunal") in ITA No. 1123/Chd/2017, for the assessment year 2012-13, claiming the following substantial questions of law:- i) Whether on the facts and in the circumstances of the case, the Hon'ble ITAT has erred in deleting the addition of Rs. 1,98,11,235/- (made on account of restricting the claim of deduction u/s 80IC of the Income Tax Act, 1961 @ 25%) without discussing the merits of the issue involved and by relying on the decision of Hon'ble Himachal Pradesh High Court in the case of M/s Stoverkraft India, when this judgment has not been accepted by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. CIT(A) has held the expenditure claimed as not genuine? v) Whether on the facts and in the circumstances of the case, the Hon'ble ITAT has erred in allowing 80IC deduction on addition of Rs. 13,01,872/- and Rs. 38,800/- made u/s 36(1)(iii) even when the AO and CIT(A) in their orders have categorically stated that the amount so advanced served no business purpose, nor it was incurred on account of any commercial expediency and in view of the fact that the Board's Circular No. 37/2016 specifically allows the deduction only to disallowance 'related to the business activity against which the chapter VI-A deduction has been claimed'? vi) Whether on the facts and in the circumstances of the case, the Hon'ble ITAT ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 22.5.2017 (Annexure A- 2) confirmed the disallowance of 75% of deduction claimed under Section 80IC of the Act. The disallowance of bad debt under Section 37 of the Act on 'loss of shares forfeited' was also upheld. However, the deduction claimed under Section 36(1)(iii) of the Act, the Assessing Officer was directed to recompute the disallowance thereunder on the day to day basis at the average cost of debt of whole funds and not the cost of borrowed funds only. Still dissatisfied, the assessee filed an appeal before the Tribunal. The Tribunal vide order dated 29.1.2018 (Annexure A-3) allowed the appeal and directed the Assessing Officer to grant deduction of 100% of its eligible profits to the assessee. Further, the assessee was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terprise which had set up a new unit between 7th January, 2003 and 1st April, 2012 in State of Himachal Pradesh of the nature mentioned in clause (ii) of sub-section (2) of Section 80-IC, would be entitled to deduction at the rate of 100% of the profits and gains for five assessment years commencing with the 'initial assessment year'. For the next five years, the admissible deduction would be 25% (or 30% where the assessee is a company) of the profits and gains. (c) However, in case substantial expansion is carried out as defined in clause (ix) of sub-section (8) of Section 80-IC by such an undertaking or enterprise, within the aforesaid period of 10 years, the said previous year in which the substantial expansion is undertaken would bec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he additions so made were entitled to deduction under Section 80IC of the Act as accepted by the Department also vide the Circular dated 2.11.2016 resulting in no addition to the taxable income of the assessee. The Tribunal had recorded as under:- "9. We find merit in the contention of the Ld. Counsel for the assessee. Undoubtedly the disallowances challenged in the additional grounds, pertaining to interest and bad debts, result in increasing the business profits of the assessee. Moreover, we have held in the earlier part of our order that the assessee is entitled to claim deduction of its profits @ 100% in the impugned order. Consequently, the additions so made are entitled to deduction u/s 80IC of the Act, as accepted by the Departmen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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