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TMI Blog2020 (6) TMI 427X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee is allowed. Order is being pronounced after 90 days of hearing - HELD THAT:- Taking note of the extraordinary situation in the light of the Covid-19 pandemic and lockdown, the period of lockdown days need to be excluded. For coming to such a conclusion, we rely upon the decision of the Co- ordinate Bench of the Mumbai Tribunal in the case of JSW Limited [ 2020 (5) TMI 359 - ITAT MUMBAI ] - Shri S.S. Godara, JM And Dr. A.L. Saini, AM For the Appellant : Shri Arvind Agarwal, Advocate For the Respondent : Shri Supriyo Paul, JCIT ORDER PER DR. A.L. SAINI, AM: The captioned appeal filed by the assessee, pertaining to assessment year 2015-16, is directed against the order passed by the Commissioner of Income Tax (Appeal)-9, Kolkata, in appeal no. 129/CIT(A)-9/Cir-31/2017-18/Kol, which in turn arises out of an assessment order passed by the Assessing Officer u/s 143(3) of the Income Tax Act, 1961 (in short the Act ) dated 04/12/2017. 2. The grounds of appeal raised by the assessee are as follows: 1. For that in view of the facts and circumstances of the case the action of the Ld. CIT(A) in upholding the claim of deduction U/s. 80IC at ₹ 10172628/- allowed by Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otor starters, current limiters, safety power guard sockets, etc. As per information given in Form No. 10CCB, the assessee started its business activity / operation on 26-05-2007 and initial Assessment Year for claim of deduction u/s. 80-IC of the of the Income-tax Act, 1961 was Assessment Year 2008-2009. The assessee had already claimed deduction u/s. 80- IC to the extent of the 100% eligible profit for five years period of Assessment Year 2008-09 to Assessment Year 2012-2013. However, it was noticed that the assessee firm had again claimed 100% deduction against eligible profits in the relevant Assessment Year 2015-2016 which is 8th year of production for the firm by claiming substantial expansion in Financial Year 2011-2012. The assessee made following submission regarding the same : In this connection your kind attention is drawn to the detailed assessment orders passed in the earlier years which are all scrutiny assessments. There is no change in the activity carried on by the proprietorship concern Electron Automats Assessment Year 15-16 is the 8th year of claim of deduction u/s 80IC which has been claimed @ 100% for which detailed explanation and submission has been filed in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustries, Parwanoo were filed during the course of scrutiny Assessment proceedings of Assessment Year 2012-2013. 6. In view of the substantial expansion having taken place during Assessment Year 2012-2013 i.e. before the cut off dt 01.04.2012 Assessment Year 2012-2013 becomes the initial assessment year for the claim of deduction U/s. 80IC of the IT Act, 1961 i.e. @ 100% for next 5 years commencing from Assessment Year 2012-2013 which incidentally was the 5th year of the commencement of the business. 7. Initial Assessment Year has been defined U/ s. 80IC(8)(v) as under: Initial Assessment Year means the Assessment Year relevant to the previous year in which the undertaking or the enterprise begins to manufacture or produce articles or things or commence operation or completes substantial expansion. 8. Since in our case substantial expansion took place during Assessment Year 2012-2013 our initial Assessment Year will be considered from Assessment Year 2012-2013 itself and 100% deduction will be allowed accordingly subject to a maximum of 10 years from Assessment Year 2008-2009. 9. The substantial expansion has been defined in Section 80IC(8)(IX) which is reproduced as under: Substant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... grounds of appeal and the submissions made on behalf of the appellant. The only issue in the appeal relates to claim of deduction u/s 80IC @ 100% instead of 25% as allowed by Assessing Officer. The assessee relies on the judgement of Hon'ble ITAT in its own case for A.Y. 2013-14 and 2014-15. The issue involved is whether appellant is entitled to the claim of deduction u/s 80IC of the IT Act, 1961. On substantial expansion @ 100% as claimed by the appellant in A.Y 2015-16 which is the 8th year from the initial Assessment Year as against 25% allowed by the Assessing Officer. The issue is settled by the judgement of Hon'ble Supreme Court in the case of CIT vs Classic Binding Industries [2018] 96 taxmann.com 405 (SC), wherein it has been held that Where assessee had availed deduction under section 80-IC for a period of 5 years at rate of 100 per cent, he would be entitled to deduction on substantial expansion for remaining 5 assessment years at rate of 25 per cent (or 30 per cent where assessee is a company), as the case may be, and not at rate of 100 per cent. In view of the above, the appeal of the assessee is dismissed. 9. Aggrieved by the order of ld. CIT(A), the assessee i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng unit of Electron Automates completed substantial expansion of Plant machinery during the period 01.04.2011 to 31.03.2012 and was eligible for claim of deduction U/s. 80IC @ 100% for next 5 years commencing from AY 2012-2013 which becomes the Initial Assessment Year which has been defined U/s. 80IC(v) which reads as under: Initial Assessment Year means the Assessment Year relevant to previous year in which the undertaking or the enterprises begins to manufacture or produce articles or things or commence operation or complete substantial expansion The substantial expansion has further been defined in Section 80IC(8)(ix) which is reproduced as under: Substantial expansion means increase in the investment in the Plant Machinery by at least 50% of the book value of Plant Machinery (before taking depreciation in any year) as on the 1st day of the previous year in which the substantial expansion was undertaken Thus, on the basis of the substantial expansion having been made in the Plant machinery within the specified period as provided in the Act and having fulfilled all the condition for claiming deduction @ 100% for further 5 years the appellant had claimed a sum of ₹ 37118499/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee which relates to book profit u/s 115JC and allow the set off of tax credit u/s 115JD for tax paid in earlier year on book profit. 14. We note before the ld. CIT(A), the assessee had raised additional grounds which is given below: Provision of Section 115JC regarding special provision for payment of tax by certain person other than a company was introduced by Finance Act 2012 w.e.f. 01.04.2013 relevant to A.Y. 2013-14 and in compliance to the said provision taxes were paid u/s 115JC of the I T Act, 1961 and a statement of taxes paid w.e..f A.Y. 2013-14 is enclosed. The Assessing Officer has computed the income as per the provision of the I T Act, 1961 at ₹ 3,02,98,970/- and has levied tax of ₹ 9917852/- but has failed to compute book profit u/s 115JC of the IT Act, 1961 and allow credit for taxes paid u/s 115JD for which necessary direction be given as per law. 15. We have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials available on record. We direc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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