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TMI Blog2019 (8) TMI 982X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld.CIT(A) on merits are therefore dismissed. Now taking up the assessee s appeals against the action of the CIT(A) in not disposing off the legal ground raised by it, challenging the validity of assessment framed under section 147 of the Act, the Ld. Counsel for the assessee stated that it do not wish to press the grounds raised. - ITA Nos. 780, 781 & 782/Chd/2018, ITA Nos. 778, 821 & 822/Chd/2018 - - - Dated:- 8-4-2019 - Smt. Diva Singh, Judicial Member And Ms. Annapurna Gupta, Accountant Member For the Assessee : Sh. Vineet Krishan For the Revenue : Sh. Yogendra Mittal ORDER PER BENCH All the above captioned cross appeals relate to the same assessee and are against separate orders passed by the Commissioner of Income Tax(Appeals)-2,Chandigarh (in short referred to as CIT(A), u/s 250(6) of the Income Tax Act,1961,(hereinafter referred to as Act ) , dated 26-03-18 for Assessment Year (A.Y)2010-11 and 29-03-18 for A.Y 2011-12 2012-13. 2. It was common ground that the issue involved in all the appeals was identical. They were all therefore heard together a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umstances of the case and in law, the Ld.CIT(A) has not erred in partly allowing the appeal of the assessee without appreciating the facts of the case ? (ii) Whether on the facts and circumstances of the case, the Ld.CIT(A) has not erred in law and fact in deleting the addition of ₹ 71,92,851/- (made on account of restricting the claim of deduction u/s 80-IC of the Income Tax Act, 1961 @ 25%) without discussing the merits of the issue involved and by relying on the decision of Hon Tale Himachal Pradesh High Court in the case of M/s Stovekraft India and the decision of Hont le Jurisdictional Tribunal in the case of M/s/ Eurolinks, when these judgments have not been accepted by the department on merits and SLP has been filed in such cases ? (iii) Whether on the facts and circumstances of the case, the CIT(A) has not erred in allowing the deduction u/s 80IC @ 100% to the assessee for 10 years without appreciating and ignoring the real intent and purpose of insertion of section of 80IC and the CBDT circular No. 7 of 2003 dated 05.09.2003 and circular No. 49 of 2003 of Central Excise Department and the subsidy scheme issued by Ministry of Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oring the fact that the expression substantial expansion has been used in both section 80IC(2)(a) and 80IC(2)(b) however 80IC(2)(a)(ii) and 80IC(2)(b)(ii) is applicable to H.P. or Uttrakhand and 80IC(a)(iii) and 80IC(b)(iii) are applicable to the north eastern states when compared with rate of deduction provided u/s 80IC(3)(ii), the rate given is 100% for five years, and 25% for next five years, whereas under sub section 3(i), the rate has been given @ 100% for NE states and Sikkim for all 10 years and the meaning of substantial expansion will be rendered redundant. (viii) Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) is justified in holding that an undertaking which has carried out substantial expansion in any assessment year prior to 01.04.2012 can opt for that assessment year as initial assessment year for the purpose of claiming deduction u/s 80IC(3) of the Income Tax Act without appreciating the fact that an undertaking set up after 07.01.2003 is not entitled to benefit of substantial expansion in view of the provisions of Section 80IC(2)(a)(ii) and 80IC(2)(b)(ii) and as clarified in CBDT circular No. 7 of 2003? ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. Before us ,at the outset itself it was pointed out by both the parties that the Hon'ble Apex Court had settled this issue in favour of the assessee in a bunch of cases, with the lead case being Pr.CIT, Shimla Vs. M/s Aarham Softronics in Civil No.1784 of 2019 dated 20.2.2019. 8. We have gone through the order of the Hon'ble Apex Court in the case of M/s Aarham Softronics (supra) and find that the Hon'ble Apex Court dealt with the entire scheme of the Act relating to the relevant section i.e. section 80IC of the Act, and arrived at the conclusion that the definition of the initial assessment year contained in clause (v) of sub-section(8) of section 80IC of the Act can lead to a situation where there can be more than one assessment year within the said period of ten years. The relevant finding of the Hon'ble Apex Court at para 19 of its order is as under: 19. Having examined the scheme in the aforesaid manner, we arrive at the conclusion that the definition of initial assessment year contained in clause (v) of subsection (8) of Section 80-IC can lead to a situation where there can be more than one initial assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... down the correct law. The conclusion of the Hon'ble Apex Court at para 24 of its order is as under: 24. The aforesaid discussion leads us to the following conclusions: (a) Judgment dated 20th August, 2018 in Classic BindingIndustries case omitted to take note of the definition initial assessment year contained in Section 80-IC itself and instead based its conclusion on the definition contained in Section 80-IB, which does not apply in these cases. The definitions of initial assessment year in the two sections, viz. Sections 80-IB and 80-IC are materially different. The definition of initial assessment year under Section 80-IC has made all the difference. Therefore, we are of the opinion that the aforesaid judgment does not lay down the correct law. (b) An undertaking or an enterprise which had set up a new unit between 7th January, 2003 and 1st April, 2012 in State of HimachalPradesh 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 ne ..... X X X X Extracts X X X X X X X X Extracts X X X X
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