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TMI Blog2021 (1) TMI 916X X X X Extracts X X X X X X X X Extracts X X X X ..... TMI 1285 - SUPREME COURT ] the Hon ble Supreme Court overruled its earlier decision in the case of Classic Binding Industries [ 2017 (12) TMI 69 - HIMACHAL PRADESH HIGH COURT ] by observing that it 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. The Court therefore held that judgement in the case of Classic Binding Industries (supra) does not lay down the correct law. An undertaking or an enterprise which had set up a new unit between 7th January, 2003 and 1st April, 2012 in State of Himachal Pradesh 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 next five years, the admissible deduction would be 25% (or 30% where the assessee is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s at Parwanoo, Himachal Pradesh on 1St April, 2007 and set-up unit in the Parwanoo, Himachal Pradesh on the aforesaid date. It started claiming the 100% deduction in respect of profit derived from the aforesaid undertaking under section 80-IC from AY 08-09 onwards for the period of 5 years. 4. The assessee carried out and completed the substantial expansion on 28th March, 2012 (i.e. pertaining to assessment year 2012-13), wherein, it had installed plant and machinery of ₹ 5,76,054/-, which is 269% of book value of plant and machinery on the first day of the previous year in which substantial expansion took place (i.e. book value of existing plant and machinery on 1.4.2011 was ₹ 2,13,974/-). The aforesaid facts are duly disclosed in the form 10CCB filed for AY 2013-13 with the Income-tax authority. The subsequent installation or addition to plant and machinery was verified and confirmed by the Secretary of Single Window Clearance Agency, Parwanoo, which is authorised to issue the certificate. The assessee while filing its return of income for the assessment year 2015-16 claimed 100% deduction under section 80-IC in respect of profit derived from the Parwanoo undertaking ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion during the period beginning- (i) on the 23rd day of December, 2002 and ending before the 1st day of April, 2012, in any Export Processing Zone or Integrated Infrastructure Development Centre or Industrial Growth Centre or Industrial Estate or Industrial Park or Software Technology Park or Industrial Area or Theme Park, as notified by the Board in accordance with the scheme framed and notified by the Central Government in this regard, in the State of Sikkim; or (i) on the 7th day of January, 2003 and ending before the 1st day of April, 2012, in any Export Processing Zone or Integrated Infrastructure Development Centre or Industrial Growth Centre or Industrial Estate or Industrial Park or Software Technology Park or Industrial Area or Theme Park, as notified by the Board in accordance with the scheme framed and notified by the Central Government in this regard, in the State of Himachal Pradesh or the State of Uttaranchal; or (ii) on the 24th day of December, 1997 and ending before the 1st day of April, 2007, in any Export Processing Zone or Integrated Infrastructure Development Centre or Industrial Growth Centre or Industrial Estate or Industrial Park or Software Techno-logy Par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 80-IA shall apply for the purposes of clause (ii) of this sub-section as they apply for the purposes of clause (ii) of that sub-section. (5) Notwithstanding anything contained in any other provision of this Act, in computing the total income of the assessee, no deduction shall be allowed under any other section contained in Chapter VIA or in section 10A or section 10B, in relation to the profits and gains of the undertaking or enterprise. (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. (7) The provisions contained in sub-section (5) and sub-sections (7) to (12) of section 80-IA shall, so far as may be, apply to the eligible undertaking or enterprise under this section. (8) For the purposes of this section,- . (v) Initial assessment year means the assessment year relevant to the previous year in which the undertaking or the enterprise begins to manufacture or produce artic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lying on a decision of the Hon ble Supreme Court in the case of Aarham Softronics (infra) also brought to our notice that relief allowed by the CIT(A) on similar issue in AY 2013-14 2014-15 has not been challenged by the revenue and has been accepted by the revenue. 9. We have carefully considered the rival submissions. In Prl.CIT Vs. Aarham Softronics Civil Appeal No. 1784/2019 judgment dated 20.2.2019, the Hon ble Supreme Court overruled its earlier decision in the case of Classic Binding Industries Civil Appeal No. 7208 of 2018 judgment dated 20.8.2018 by observing that it 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. The Court therefore held that judgement in the case of Classic Binding Industries (supra) does not lay down the correct law. 10. An undertaking or an enterprise which had set up a new unit betw ..... X X X X Extracts X X X X X X X X Extracts X X X X
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