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TMI Blog2020 (5) TMI 117X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 27.03.2016, the Assessing officer has recorded a finding that financial year 2012-13 is the third year after commencement of business and is eligible for deduction u/s 80IC - financial 2010-11 would be the first year of commencement of business and the undertaking had begun manufacturing before 01.04.2012 and thus, satisfied all the conditions. Revised audit report in Form 10CCB has been filed during the course of assessment proceedings which was not considered by the AO on account of a mistake on the part of the auditor where he has wrongly mentioned the date of issue of such report as in the original audit report, however, there is no dispute that the assessee substantially complies with all the conditions as prescribed for claim of deduction u/s 80IC of the Act and during the appellate proceedings, the ld CIT(A) has accepted the revised audit report which is not disputed by the Revenue. Only dispute which remains before the ld CIT(A) was that there was no CBDT notification notifying the industrial area as per the scheme framed by the Central Government which the assessee has now filed and the same has been examined. In light of the aforesaid discussion, we set-aside the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT vs Malborough Polychem (P.) Ltd [2009] 309 ITR 43 (Raj) IT vs Western Outdoor Interactive (P.) Ltd [2012] 349 ITR 309 (Bom) Saurashtra Cement Chemical Industries Ltd vs CIT [1980] 123 ITR 669 (Guj) Resistoflex Dynamics (P.) Ltd vs DCIT [2014] 159 TTJ 425 (Delhi- Trib) Tata Communications Internet Services Ltd vs ITO [2010] 4 ITR(T) 249 (Delhi- Trib) 4. It was further submitted that section 80-IC falls in Chapter VI-A-(c) of the IT Act, 1961 and provides for deduction of a percentage of profits and gains derived from the eligible business which is carried out through the undertaking/ enterprise situated in the specified states. An enterprise situated in Uttaranchal can claim deduction under section 80-IC(2)(a) as well as 80- IC(2)(b) subject to fulfillment of certain conditions. The relevant provisions of section 80-IC(2) read as under:- Section 80-IC: Special provisions in respect of certain undertakings or enterprises in certain special category States (2)This section applies to any undertaking or enterprise,- (a) which has begun or begins to manufacture or produce any article or thing, not being any article or thing specified in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n in both clauses. Since the assessee s undertaking is situated in notified area, the assessee s case also falls in both the clauses. The same is explained as under: 1. Section 80-IC(2)(a) a. The undertaking is not engaged in manufacturing or producing any article/ thing as specified in Thirteenth Schedule. b. The undertaking began manufacturing after 07.01.2003 and also before 01.04.2012 i.e. on 27.03.2010. c. The undertaking is situated at F-14, SIDC Industrial Area, Bhimtal, Nainital, Uttaranchal 263136 which is at Khasra Nos. 687, 689 in Nainital Tehsil which falls in the Notification No. 177/2004 [SO 741] [F.No. 142/47/2003-TPL] dated 28-06-2004 issued by CBDT in accordance with the scheme. 2. Section 80-IC(2)(b) a. The undertaking is engaged in manufacturing of TV, DVD, LCD manufacturing which falls under entry 13 of Fourteenth Schedulei.e., Information and Communication Technology Industry, Computer hardware, Call Centers . b. The undertaking began manufacturing after 07.01.2003 and also before 01.04.2012 i.e. on 27.03.2010. c. The undertaking is situated in the state of Uttaranchal. 7. It was further submitted that along with return of income, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iii. Communication from Chief Manager Industry Centre, Nainital wherein the list of areas notified for exemption from payment of Central Excise Duty as well as from Income Tax was enclosed. The Khasra Nos. of the assessee 687 and 689 find mention in the list of notified areas [PB 113-118]. The letter is as under: 10. It was further submitted that the ld. CIT(A) erred in dismissing the appeal of the assessee by observing as under:- ..On perusal of all facts I find that the unit of the assessee is situated in the industrial area developed by UPSIDC. As per Central Exercise notification no. 50/2003, the said unit is also eligible for exemption for a particular period from excise duty. But there is no notification on record issued by CBDT notifying such industrial area whereas unit is situated making it eligible for deduction under section 80-IC 11. In this regard, it was submitted that CBDT has issued Notification No. 177/2004 [SO 741] [F.No. 142/47/2003-TPL], dated 28.06.2004. The Khasra No. on which the undertaking of the assessee is situated find mention in the notification. Further, CBDT Notification requires the State to notify the industrial areas or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction u/s 80-IC(2)(b). It was submitted that the ld. AO erred in inferring that the products in which the assessee is dealing does not fall under entry 13 of Fourteenth Schedule i.e., Information and Communication Technology Industry, Computer hardware, Call Centers . During the appellate proceedings, the eligibility of the assessee under 80- IC(2)(b) was explained before the ld CIT(A). The ld. CIT(A) has not disputed the same. However, the appeal was dismissed by ld. CIT(A) holding the assessee not eligible u/s 80-IC(2)(a). It is pertinent to note that Information and Communication Technology is an umbrella term that includes any communication device, encompassing radio, television, cell phones, computer and network hardware, satellite systems. Further, the Information Technology Act, 2000 defines communication devices as under:- Section 2(ha)-communication device: means cell phones, personal digital assistance or combination of both or any other device used to communicate, send or transmit any text, video, audio or image. 14. It was submitted that Television is a mode of mass communication and is used to transmit any text, video, audio or image. Therefore, the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation no. 50/2003, the said unit is also eligible for exemption or a particular period from excise duty. But there is no notification on record issued by CBDT notifying such industrial area whereas unit is situated making it eligible for deduction under section 80IC. Therefore claim of assessee cannot be allowed. Thus, the disallowance made by Assessing Officer is Upheld, This ground of appeal is dismissed. 16. We have heard the rival submissions and gone through the material available on record. We note that the undertaking in respect of which deduction has been claimed u/s 80IC is situated at Khasra Nos. 687, 689, F- 14, SIDC Industrial Area, Bhimtal, Nainital, Uttaranchal which falls in the specified Industrial area as per Notification No. 177/2004 dated 28-06-2004 issued by the CBDT in accordance with the scheme framed and notified by the Central Government for the state of Uttaranchal. Apparently, the said notification was not brought to the notice of ld CIT(A) and in absence of the same, the ld CIT(A) has denied the deduction under section 80IC(2)(a)(ii) of the Act. There is no dispute that the undertaking satisfies the other conditions specified therein. It is enga ..... X X X X Extracts X X X X X X X X Extracts X X X X
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