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2015 (6) TMI 316

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..... e CIT vs. Delhi Patra Prakashan Ltd.[2013 (6) TMI 70 - DELHI HIGH COURT], Saurashtra Cement [1979 (2) TMI 21 - GUJARAT High Court] and Paul Brothers [1992 (10) TMI 5 - BOMBAY High Court] - Decided in favour of assessee. - ITA No. 2157/Del/2012 - - - Dated:- 13-5-2015 - Shri J. Sudhakar Reddy And Shri C. M. Garg,JJ. For the Appellant : Dr. Rakesh Gupta, Adv. For the Respondent : Sh. P.Dam Kanunjna, Sr.D.R ORDER Per J. Sudhakar Reddy, Accountant Member This is an appeal filed by the assessee and is directed against the order of the Ld.CIT(A)-II, Dehradun dated 14.02.2012 pertaining to the Assessment Year ( AY ) 2008-09 on the following grounds. 1. The authorities below has erred in law and on facts in disallowing ₹ 8,16,195/- claimed by the assessee u/s 80 IC of the Act. 2. The authorities below has not bring HOTEL in the ambit of ECO-TOURISM and deviated from the main section 80IC of the Act. 3. The item no. 15 of PART-C of XIV schedule includes hotels under ECOTOURISM which is grossly mistaken by both the authorities below. 4. It is prayed to allow the claim of deduction u/s 80IC of ₹ 8,16,195/- and delete the entire .....

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..... assessment as expeditiously as possible, preferable within a period of three . months, If not already concluded from the date of production of certified copy of this order before him. The above action of the assessee proves that the assessee was well aware about his false claim for deduction u/s 80 IC of the IT.Act and tried to litigate the assessment proceedings by filing writ before the Hon'ble High Court. 3. The assessee carried the matter in appeal before the First Appellate Authority without success. 4. Further aggrieved the assessee filed appeal before us. 5. The Ld.Counsel for the assessee Dr.Rakesh Gupta submitted that the AO has granted deduction u/s 80 IC to the assessee for the AY 2005-06 in an order dt. 27.3.2006 passed u/s 154 of the Act. Further he submitted that for the AY 2006-07 the claim of the assessee has not been disturbed by the Revenue authorities. Similarly for the AY 2007-08 the AO reopened the assessments by issue of notice u/s 148 on the ground that the assessee is not eligible for deduction u/s 80 IC and thereafter accepted the claim of the assessee. Under these circumstances he relied on the decision in ITA 764/Del/2013 for the AY .....

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..... ) (pages 19, 20 of paper book) iii. 2007-08 67,18,255/- -- 143(1) iv. 2008-09 1,06,03,655/- -- 143(3) (page 23 of paper book) v. 2009-10 72,28,540/- 72,28,540/- Disputed in appeal vi. 2010-11 8,72,235/- -- 143(1) 13.1. The assessments of the earlier years or the later years are not disturbed and the assessee was allowed the claims u/s 80IC. 14. The Hon ble Delhi High Court in the case of CIT vs. Delhi Patra Prakashan Ltd. 355 ITR 14 considered the question as to whether the ITAT was right and holding that requisite conditions to be fulfilled for allowability of deduction u/s 80 I ought to be satisfied, not only in the first or the initial year, but in all the assessment years in which the deduction u/s 80I is claimed by the assessee. The Hon ble High Court at Para 74 to Para 80 held as follows :- 74. In the present .....

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..... s where an assessee is held to be eligible for deduction in the initial assessment year, the same cannot be denied in the subsequent assessment years on the ground of ineligibility since the set of facts which enable an assessee to claim to be eligible for deduction under section 80-1 of the Act occur in the previous year relevant to the initial assessment year and have to be examined in the initial assessment year. In such cases where the facts on the basis of which the deductions are claimed are subject matter of an earlier assessment year and do not arise in the current assessment year, it would not be possible for an Assessing Officer to take a different view in the current assessment year without altering or reopening the assessment proceedings in which the eligibility to claim the deduction has been established. 76. In cases where deduction is granted under section 80-1 of the Act, the applicability of the section is determined in the year in which the new industrial undertaking is established. The qualification as to whether any industrial undertaking fulfills the condition as specified under section 80-1 of the Act has to be determined in the year in which the new ind .....

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..... re is no provision in the scheme of s.80J similar to the one which we find in the case of development rebate which could be withdrawn in subsequent years for breach of certain conditions. No doubt, the relief of tax holiday under section 80J can be withheld or discontinued provided the relief granted in the initial year of assessment is disturbed or changed on valid grounds. But without disturbing the relief granted in the initial year, the ITO cannot examine the question again and decide to withhold or withdraw the relief which has been already once granted. 79. The Division Bench of the Bombay High Court in the case of Paul Brothers (supra) has also adopted the view expressed by the Gujarat High Court in the case of Saurashtra Cement Chemical Industries (supra). 80. Following the aforesaid decisions , we hold that in facts of the present case Unit Nos. 2 3 cannot be stated to have been formed by splitting up or in reconstruction of existing business. (Emphasis ours). 9. Consistent with the view taken therein, we allow the grounds of the assessee and direct the AO to grant deduction u/s 80IC of the Act. 10. In the result the appeal of the assessee is allow .....

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