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TMI Blog2019 (9) TMI 142X X X X Extracts X X X X X X X X Extracts X X X X ..... ituation where there can be more than one initial assessment year within the said period of ten years. A newly set up undertaking or enterprise in the State of Himachal Pradesh would be entitled to deduction @ 100% of the Act its profits for the first five years and even thereafter in the case of substantial expansion is carried out by it, then the assessment year relevant to the previous year in which substantial expansion is undertaken becoming the initial assessment year. That in any case, the period of deduction u/s 80IC of the Act would not exceed 10 years. It is now settled law that even a new undertaking, which has claimed deduction of its eligible profits @ 100% thereof for the first five years, is entitled to claim deduction @ 100% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 of the Act. In view of the statement of the Ld.Counsel for the asssessee, ground Nos.1 to 4 raised by the Ld.Counsel for the asssessee in both the appeals are hereby dismissed as not pressed. 4. Vide ground Nos.5 and 6 in both the appeals of the assessee, the assessee has agitated the action of the lower authorities in restricting the deduction assessee u/s 80IC of the Act to 30% as against 100% claimed by the assessee on account of substantial expansion. 5. Brief facts relating to the issue are that the assessee started its manufacturing activities in financial year 2004- 05 relevant to assessment year 2005-06 and was eligible to claim deduction u/s 80IC of the Act) w.e.f assessment year 2005-06. The assessee had already claimed deduct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... court. 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 initial 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 ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t year'. It would mean that even when an old unit completes substantial expansion, such a unit also becomes entitled to avail the benefit of Section 80-IC. If that is the purpose of the legislature, we see no reason as to why 100% deduction of the profits and gains be not allowed to even those units who had availed this deduction on setting up of a new unit and have now invested huge amount with substantial expansion of those units." 9. The Hon'ble Apex Court thereafter concluded that a newly set up undertaking or enterprise in the State of Himachal Pradesh would be entitled to deduction @ 100% of the Act its profits for the first five years and even thereafter in the case of substantial expansion is carried out by it, then the assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 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 become 'initial assessment year', and from that assessment year the assessee shall been entitled to 100% deductions of the profits and gains. (d) Such deduction, however, would be for a total period of 10 years, as provided in sub-section (6). For example, if the expansion is carried out immediately, on the completion of first five years, the assessee would be entitled to 100% deduction again for the next fiveyears. On the other hand, if substantial expansion is undertaken, say, in 8th year by an assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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