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TMI Blog2022 (9) TMI 771X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee. The claim of the assessee was denied while passing the order pursuant to the order passed under section 263 of the Act. The ratio of the decision in the case of Pr. CIT Vs. Aarham Softronics [ 2019 (2) TMI 1285 - SUPREME COURT] applies to the facts of the case as it was held that there can be two initial assessment years and the year in which there was substantial expansion that year is the initial assessment year within the period of 10 years for the purpose of claiming deduction under section 80-IC of the Act. Thus respectfully following the decision of the Hon ble Supreme Court we hold that the assessee is entitled for deduction under section 80-IC of the Act for the assessment years 2012-13 and 2015-16 which are under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nced within the period of 10 years there cannot be any initial year thereby allowing 100% deduction in the next 5 years on the basis of substantial expansion of the unit. 4. However, we observe that this decision of the Hon ble Supreme Court was held to be not good law in the case of Pr. CIT Vs. Aarham Softronics [(2019) 412 ITR 623 (SC)] by the Hon ble Supreme Court by three judges bench wherein the Apex court held that an assessee is availing of deduction of 100% for the first 5 years and thereafter at 25% for the next 5 years, carries out substantial expansion within 10 years period the year of substantial expansion would be initial year for claiming 100% deduction. It was also held that the total period of deduction should not exce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. Therefore, we are of the opinion that the aforesaid judgment does not lay down the correct law. (b) 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed by the Assessing Officer we notice that the assessee firm is engaged in the business of manufacturing battery components and the assessee had set up its unit on 2.06.2006 relevant to the assessment year 2007-08. The assessee subsequently had undertaken substantial expansion during the financial year 2011-12 and continued to claim deduction at 100% on substantial expansion undertaken by the assessee. The claim of the assessee was denied while passing the order pursuant to the order passed under section 263 of the Act. The ratio of the decision of the Hon ble Supreme Court in the case of Pr. CIT Vs. Aarham Softronics (supra) applies to the facts of the case as it was held that there can be two initial assessment years and the year in w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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