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2019 (2) TMI 1366 - AT - Income TaxDeduction u/s 80IC - initial year for claiming benefit u/s 80IC - 5th year for counting deduction - HELD THAT:- A plain reading of Section 80IC shows that any undertaking or enterprise which begins or begun to manufacture or produce any article or thing or which manufactures or produces any article or thing and undertakings substantial expansion during the specified period is entitled to claim deduction u/s 80IC(3)(ii). The interpretation adopted by the Revenue for “initial assessment year” does not promote the object of Section 80IC for the undertakings which have completed the substantial expansion but at the same time it was impossible for such undertaking to commence business or to claim any benefit of an enactment in Section 80IC. Law does not require any assessee to do an impossible act and claiming benefit by the assessee in this particular set of circumstances is nothing but impossibility. As we have observed the initial assessment year means the assessment year relevant to the previous year in which the undertaking or an enterprise begins to manufacture or to produce articles or things or commences operations or completes substantial expansion. Here the completion of substantial expansion has to be read with reference to the expression in the company of which this particular expression happens to be. We are of the considered opinion that completing the substantial expansion for the purpose of claiming benefit u/s 80IC for the first time shall be read in the context of the proviso as a whole and it shall mean that the completing of substantial expansion would be equivalent to the commencement of the operation. Undertaking of substantial expansion would be complete only when substantial expansion is capable of producing the desired results. We, therefore, find it difficult to agree with the interpretation given by the authorities below. Assessment order for the AY 2006-07 also contains a reference to this claiming of deduction u/s 80IC for the first time on account of substantial expansion in that year only. It,thus, goes without saying that it has been in the knowledge of the Revenue right from AY 2006-07 that though the assessee has been mentioning the date of substantial expansion as 31.3.2005, it had taken a clear stand that the initial assessment year for commencement of claiming benefit u/s 80IC is 2006-07. The same was accepted for all these years. We do not find any valid reason for the revenue now to take a different stand. It is not the self serving statement of the assessee alone that the assessee is taking support from, but it is the acceptance of such a statement by the Revenue for all these year, that lend support to the case of the assessee. Thus the ‘initial year’ for claiming benefit u/s 80IC is 2006-07 and going by that 2010- 11 is the fifth year for claiming the benefit and not sixth year as held by the authorities below. - Decided in favour of assessee.
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