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TMI Blog2016 (2) TMI 1279X X X X Extracts X X X X X X X X Extracts X X X X ..... y in the language of the section, then, being an incentive provision - benefit given to the assessee. We also make it clear that the deduction cannot be extended beyond the period of 10 years from the A.Y. 2004-05. - Decided in favour of assessee. - SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER For The Assessee : Sh. Amit Goel, CA For The Department : S h. V.R. Sonbhadra, Sr. DR ORDER PER H.S. SIDHU : JM The Assessee has filed the present appeal against the impugned Order dated 22.2.2013 passed by the Ld. Commissioner of Income Tax (Appeals)-I, New Delhi on the following grounds:- 1. On the facts and circumstances of case and in law, the Commissioner of Income Tax (Appeal) erred in confirming the action of Assessing Officer of allowing deduction u/s 80lC of Income Tax Act, 1961 @ 30% instead of 100% as claimed by the assessee company. 2. On the facts and circumstances of case and in law, the Commissioner of Income Tax (Appeal) erred in confirming the action of Assessing Officer of allowing deduction u/s 80lC of ₹ 2,67,33,841/- instead of ₹ 9,26,57,160/- as claimed by the assessee. 3. On the facts and circumstances of case and in law, the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eligible for deduction @ 30% of its profit during the instant year. 3. The A.O. in his order u/s 143(3) rejected the claim of the assessee after analyzing the provision of S.80-IC and the government policy for the State of Uttaranchal and the State of Himachal Pradesh. The Assessing Officer held as follows. 3.8. Now the instant case is being examined in the light of discussion above. The assessee falls in the second category i.e. an already existing unit on the cutoff date that completed substantial expansion during the Assessment Year 2004-05. The assessee claimed Assessment Year 2004- 05 to be its initial Assessment Year for claiming deduction, meaning thereby, that the substantial expansion was completed during FY 2003-04 relevant to the Assessment Year 2004-05. By virtue of completing substantial expansion during the Assessment Year 2004-05 and fulfilling other conditions mentioned in the section, the assessee became eligible for claiming deduction u/s 80 IC for a period of ten years, @ 100% for first five years and @ 30 years for the balance five years. 3.9. The submission of the Ld.Counsel regarding the assessee fulfilling all the conditions claiming deduction and the claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ears from the initial assessment year. The substantial expansion undertaken by the assessee during the previous year under consideration is immaterial as far as deduction u/s 80-IC is concerned. Law has recognized only one 'initial assessment year' for an undertaking/enterprise. Tire assessee's attempt amounts to abuse ofthe incentive provision. The assessee, in support of its claim, lias relied on tire decision of tire Hon, ITAT in the case of S.R. Paryavan Engineers (P) Ltd. V. Department of Income Tax (ITA No. 340/Chd/2010), dt, 39.08.2010. In that case, tire assessee was entitled to deduction u/s 80-IC on substantial expansion but had, by mistake, claimed the same u/s 80-IB. The deduction was not allowed by the AO since tire latter deduction is not allowable on substantial expansion. On appeal, it was held that the assessee had committed a mistake in claiming deduction under a wrong section and that it should be allowed the same under the correct one, i.e. 80- IC. The facts of the case are entirly different. The assessee s claim has been made under a correct section according to it, it is found to be not allowable in law. Hence, the decision relied on by the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee s own case in ITA No. 991/Del/2013 for the assessment year 2009-10. For the sake of convenience, he filed the copy of the Tribunal s Order dated 29.1.2014. Accordingly, he requested that the issue no. 1, 2, 3 in the present case may be decided in favour of the assessee by following the Tribunal s order in assessee s own case. 7. On the other hand, Ld. DR relied upon the orders of the revenue authorities. 8. We have heard both the parties, perused and considered the relevant records available with us specially the impugned orders passed by the Revenue Authorities and the copy of the order dated 29.1.2014 of this Bench passed in the case of assessee titled as Tirupati LPG Industries Ltd. vs. DCIT in ITA No. 991/Del/2013 (AY 2009-10). The relevant para nos. 10.3 to 12 at page 11 to 16 is reproduced below:- 10.3. There is no dispute on the fact that (a) the assessee is entitled to exemption u/s 80 IC of the Act i.e. that the assessee has satisfied all the conditions specified in the section; (b) that there is substantial expansion during the year as per requirement of the section. 10.4. The only dispute that arises for our consideration is the interpretation of the term initial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... literal meaning of the term initial assessment year is to be taken, then there is no requirement of defining this term in the section. We have to go by the language of the section. 10.6. The CIT(A) denies the deduction on the ground that it would amount to evergreening of an incentive provision. Sub section (6) of S.80-IC reads as follows. 6) Notwithstanding anything contained in this Act, no deduction shall be allowed to any undertaking or enterprise under this section, where the total period of deduction inclusive of the period of deduction under this section, or under the second proviso to sub-section (4) of section 80-IB or under section 10C, as the case may be, exceeds ten assessment years. This section imposes a restriction for a total period of 10 years for claiming the deduction in question, irrespective of the fact whether the deduction is claimed u/s 80-IC or u/s 80-IB or u/s 10C as the case may be. Thus there is no evergreening of the provisions. The assessee cannot claim the said deduction for a total period exceeding 10 years. The deduction could be allowable only for the balance period of 5 years including this Assessment Year 2009-10. Only the rate of deduction goes ..... X X X X Extracts X X X X X X X X Extracts X X X X
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