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2015 (6) TMI 725 - ITAT CHANDIGARH

2015 (6) TMI 725 - ITAT CHANDIGARH - [2015] 41 ITR (Trib) 486 (ITAT [Chand]) - Deduction u/s 80-IC - CIT(A) restricting deduction to 25%i instead of 100% claimed by the appellant in the sixth year of operation of new industrial undertaking - Held that:- Before the introduction of section 80IC which is before us for consideration, the deduction to the backward states was available in terms of section 80IB(4). The third proviso makes it clear that after 31.3.2004, this deduction will be available .....

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years whereas in the case of states of Himachal Pradesh, the deduction was allowable @ 100% for first five years and 25% for next five years.

The careful reading of the form in a serial order would clearly show that the assessee is required to inform the location of the Industry and column (c) specifically ask the assessee to state whether business is a new business? Column (d) clearly ask the assessee whether existing business has undertaken substantial expansion, therefore, there a .....

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ground, we find nothing wrong with the order of Ld. CIT(A) and we uphold the same. - Decided against assessee.

Entitlement to deduction u/s 80IC - Held that:- Expression 'derived from' has been used in section 80IC also, therefore, as far as interest received on margin money and interest received on other amounting re not entitled for deduction u/s 80IC and accordingly we confirm the action of the Assessing Of ficer and CIT(A) in this respect .

As far as the amount received .....

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ame relates to the business transact ion on Revenue account, then deduct ion may be allowed on this amount, otherwise the issue may be decided in accordance with law. As far as the issue regarding misc. income and sundry credit balance written back is concerned, this issue was not seriously pressed before us, therefore, action of the Ld. CIT(A) in respect of these two items are also confirmed.

Late deposit to Provident Fund and ESIC - Held that:- As in case of CIT Vs. Nuchem [2010 (2) .....

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the law. We may also like to point out that if ultimately disallowance is made on this account then the profit of the assessee would increase and assessee would be entitled to increased deduction under section 80IC as consequences.

Disallowance on interest has not been charged from partners - Held that:- Firstly there is no provision for charging of interest in the partnership deed and therefore assessee's firm was not bound to charge interest. Secondly since no interest have been all .....

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for deduction u/s 80IC on account technological know-how services - Held that:- The A.O. has also agreed and considered the sum of ₹ 15,00,000/- as not eligible for deduction u/s 80IC on account technological know-how services as agreed by the appellant subject to no penal action. The appellant also agreed for the said addition as income from other sources before the A.O. Since the offer for deduction of ₹ 15,00,000/- from eligible profits u/s 80IC was itself agreed by the appellant .....

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e Respondent : Smt Jyoti Kumari ORDER Per: Bench: This is group of 20 appeals all filed by the different assessees against the separate orders of CIT(A). 2. Since identical issues have been raised in all the appeals and these were heard together, the same are being disposed of by this common and consolidated order. ITA No. 798/Chd/2012 3. First we shall take the appeal of the assessee in ITA No. 798/Chd/2012 in the case of Hycron Electronics Vs. ITO. 4. In this appeal the assessee has raised the .....

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stead of 100% claimed by the appellant in the sixth year of operation of new industrial undertaking of the appellant wherein substantial expansion was carried out in such new industrial undertaking by the Appellant. II. Misinterpreting the provisions of section 80-IC of the Act which provides for substantial expansion to be undertaken during the period beginning on 7th January 2003 and ending before 1st April 2012 and erroneously upholding that the benefit of 100% deduction u/s 80-IC of the Act .....

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alifies for deduction under the said section on the basis of 'qualifying expansion'. IV. Making a narrow interpretation of the provision of section 80-IC of the Income Tax Act, 1961 which was introduced as a welfare legislation for providing stimulus to the economy of industrially backward states such as Himachal Pradesh. 5. The brief facts of the case are that assessee firm was engaged in the business of manufacturing assembly and sub-assembly of electronic energy meters and allied prod .....

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icer after examining the facts observed that assessee has fulfilled all the conditions for claiming deduction. However, he noted that since assessee has already claimed 100% deduction for first five years upto assessment year 2008-09 from the date of setting up of the unit, therefore, assessee was entitled only to 25% deduction from the eligible business profits from assessment years 2009-10 to 2013-14. Therefore, assessee was requested to justify the claim of 100% deduction even from assessment .....

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for substantial expansion are not eligible to claim deduction u/s 80IC. In this regard it is submitted that the assessee unit i.e. M/s Hycron Electronics, Baddi first came into existence in the financial year 2003-04 i.e. relevant to the assessment year 2004-05. Thus it first claimed 100% deduction u/s 80IA/80IB of the I. T. Act in the assessment year 2004-05. The necessary deduction was also claimed in the subsequent assessment yeas i.e. 2005-06, 2006-07, 2007-08 and 2008-09. The assessment fo .....

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re or produce any article or thing not being any article or thing, not being any article or thing specified in the 13th Schedule and UNDERTAKES SUBSTANTIAL EXPANSION DURING THE PERIOD BEGINNING 7th day of January 2003 and ending before the 1st day of April 2012 in the State of Himachal Pradesh. The deduction shall be 100% of such profits and gains for five assessment years connecting WITH THE INITIAL ASSESSMENT YEAR and thereafter 25% (or 30% where the assessee is a company) of the profits and g .....

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the previous year in which the Undertaking or Enterprise begins to manufacture or produce articles or things or commences operation OR COMPLETES SUBSTANTIAL EXPANSION. As already stated, the assessee unit after claiming 100% deduction u/s 80IA/80IB of the I.T. Act for 5 assessment years came for substantial expansion in the assessment year 2009-10 which is the year under assessment. Thus this the first year of claiming 100% deduction for substantial expansion as per provisions of section 80 IC. .....

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year in which the undertaking or enterprise begins to manufacture or produce articles or things. Or ii) Means the assessment year relevant to the previous year in which the undertaking or enterprise completes substantial expansion. Thus it makes it clear that 100% deduction is available to an undertaking or enterprise in the case of its starting manufacturing between the period 07.01.2003 and ending before 01.04.2012 and in this case the initial assessment year would be the year when it starts i .....

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cer examined this reply and then referred to provisions of section 80IC. According to him, the most important question was who could carry out the substantial expansion. For this he referred to Circular No. 7 of 2003 issued by Central Board of Direct Taxes (for short CBDT) as well as Circular No 49 of 2003 issued by Central Excise Authorities. He concluded that on the basis of these two Circulars it is very clear that substantial expansion could be carried only by the existing units. He also ref .....

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be safely concluded that the benefit of substantial expansion is available only to the existing units i.e. the units that existed and were operational as on 07.01.2003 in order to make them eligible for 100% deduction under section 80IC for first five years and is not at all meant for the units that came into being on or after the introduction of the scheme i.e. 07.01.200. Keeping the above discussion in mind, the assessee 's claim of substantial expansion and on that basis, reckoning the As .....

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deduction on its profits for sixth year in succession i.e. for the Asst. Year 2009-2010. " In the above background, for the present assessment year i.e. assessment year 2009-10, deduction u/s 80IC was allowed @ 25%. 9. On appeal before Ld. CIT(A) it was mainly submitted that combined reading of section (3)(ii) and definition of initial assessment year, it becomes amply clear that assessee was eligible for 100% deduction from assessment year 2009-10. In any case there was no provision restr .....

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h day of January 2003 and ending before 1st April 2012. The section nowhere provides that benefit of 100% deduction in the case of substantial expansion shall be available to the units which were already in existence at the time of this section. Even the Circular No. 7 of 2003 issued on 5.9.2003 clarifies that benefit of deduction shall be available to all enterprises which undertake substantial expansion. 10. It was further pointed out that clause (25)(ii)(d) of Form No. 10CCB which states &quo .....

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hat there can be only be one initial assessment year, then sub-section (6) of section 80IC would become redundant because then deduction would always be 100% for first five years and 25% for the next 5 years. Therefore, the provision of section 80IC should be constructed harmoniously. In any case if there was some ambiguity the provision should be liberally construed so as to advance the exemption provision. In this regard reliance was placed on the decision of Hon'ble Supreme Court in the c .....

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new and revamped Industrial policy notified by the Union Cabinet for the State of Sikkim, Himachal Pradesh, Uttaranchal and North-Eastern states. This incentive scheme provide for benefits under Income Tax Act and Central Excise, Capital Investment Subsidy and Transport subsidy etc. The benefit under Income Tax were provided in section 80IC to new units commencing manufacturing on or after 7 January of 2003 or to the existing units involving substantial expansion after that date eligible for su .....

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ns to manufacture any article or thing specified in the Fourteenth Schedule, which means a new undertaking or enterprise which has begun or begins to manufacture or produce any specified articles or thing on the 7th day of Jay., 2003 and ending before the 1st day of April, 2012 in the State of Himachal Pradesh. ii) Any undertaking or enterprise which manufactures or produces any article or thing, not being any article or thing specified in the thirteenth Schedule or which manufactures or produce .....

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4.4., which are as under:- "4.3 Thus it is clear from above that deduction u/s 80IC is available to the pre-existing undertaking or enterprises (which existed prior to the enactment of section 80IC) on the condition that they undertake substantial expansion during the period beginning on the 7l day of Jan., 2003 and ending before the 1srt day of April, 2012 in the State of Himachal Pradesh as per the conditions stipulated in section 80IC. However, deduction u/s 80IC is also available to the .....

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goal of encouraging investment in the State of Himachal Pradesh, the condition of substantial expansion has been made a pre-requisite for allowing deduction u/s 80IC in the case of old undertakings or enterprises. It is, however, clear that there is no overlapping of the two kinds of undertakings or enterprises made eligible for deduction u/s 80IC. These are two distinct categories with distinct conditions of eligibility laid down for deduction under u/s 80IC. Since the pre-existing units cannot .....

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enterprises and they cannot replace each other. 4.4 The appellant's interpretation that deduction u/s 80IC shall be available @ 100% to the new undertaking or enterprises for the initial five years and then shall again be available @ 100% for another five years if the said undertakings or enterprises carry out substantial expansion has the effect of creating a great anomaly, because this interpretation will result in a disadvantageous situation for the pre-existing undertakings. While the ne .....

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to dole out uneven benefits to the two types of industries meant to be equally poised in the given legal frame work enacted by section 80IC. " 15. She also referred to the contents of Circular No. 49/2003 of Central Excise and observed that there was no force in the assessee's contention that Excise and Income tax are two different streams of taxation with their own independent laws, and therefore, Circular No. 49 of 2003 issued by the Excise Authorities could not be relied. In this re .....

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rom the same package, it was natural to refer to Circular issued by Excise Authorities. 16. She also referred to provisions of sub section (6) of section 80IC and pointed out that sub section nowhere laid down that 100% deduction could be allowed to any undertaking for a continues period of 10 years. 17. She also referred to clause 25 (ii)(d) of Form No. 10CCB and pointed out that even the Form does not help the assessee's case. She observed that in fact clause 25 of Form 10CCB helps the Rev .....

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provisions does not give rise to more meaning than one and the legislative intent is clearly reflected from the bare reading of the section. The given expression of the statute is so clear that there is no need to add any word thereto so as to make out the object of the legislature. Therefore all the pleas taken by the appellant regarding the rule of liberal interpretation or regarding the harmonious construction of provisions are intended to give rise to unnecessary controversy." 18. On th .....

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Shri Pavan Ved and Shri Rakesh Gupta. Shri Pavan Ved had also filed written synopsis. Various contentions raised on behalf of the assessee can be summarized as under:- (a) The Assessing Officer has clearly admitted in para 2.1 of the assessment order that all the conditions and genuineness of deduction claimed under the section have been fulfilled. (b) There is no restriction or limitation u/s 80IC that only Industrial unit which had come into being before the commencement of this section would .....

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CIT(A) is not proper because Circular itself provides for benefit to existing undertakings and their substantial expansion and the word 'existing' has not been qualified with reference to any particular date. It simply qualifies 'undertaking'. (d) The reference to Circular No. 49 of 2003 issued under Central Excise Act by the Excise Authorities is also not proper because this Circular is not issued u/s 119 of the Income Tax Act. Further this circular refers to the expansion of c .....

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C) 1). (f) Ld. counsel vehemently objected to the reliance placed by the Department on the notification issued by the Ministry of Commerce, Department of Industrial Policy and Promotion Govt. of India vide notification dated 8.1.2003. It was submitted that firstly the notification did not have any bearing on the present case on interpretation of the provisions of the Act. Secondly, there was certain inconsistency in the notification because while defining the existing industrial unit, it was sta .....

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n capacity by 25% which was contrary to the criteria laid down in section 80IC i.e. 50% increase in investment. (g) Form No. 10CCB clause (25)(ii)(c) is meant for new business and clause (d) is for existing business. There is no word in between clause (c) and (d) like 'or/and' which means even according to CBDT, both situations may exist in a particular case. (h) A reference was made to clause (v) of sub-section (8) of section 80IC which defines 'initial assessment' year and it w .....

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0% deduction was held to be available after substantial expansion of the new unit. However, on the query by the Bench, it was clearly admitted by all the counsels present in the Court that this decision does not deal with any aspects of the provisions of section 80IC. Further reliance was also placed on decision of Ahmedabad Bench of the Tribunal in the case of Sintex Industries Ltd in ITA No. 310/Ahd/2014. (j) A reference was also made to sub section (6) to section 80-IC which prescribes over a .....

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ty for Advance Rulings in case of Abhishek Bhargav AAR No. 1097 of 2011 (During the hearing, Ld. counsel of the assessee was requested to either give citation of the decision or file certified copy of the order. This has not been done. However, we have considered this decision also.) (l) Lastly, it was contended that incentive provision should be construed liberally in view of the decision of Hon'ble Supreme Court in the case of Bajaj Tempo Ltd v CIT 196 ITR 188 (SC) . 20. On the other hand .....

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.2004 and this provision was later on clarified by Circular No. 7 of 2003 by the Central Board of Direct Taxes issued on 5.9.2003. Since the source of this section and other benefits available to the hilly states of Himachal Pradesh, Uttranchal, North-eastern states and State of Sikkim was the scheme cleared by the Union Cabinet, therefore, it is important to consider all the material emanating from this scheme i.e. circulars issued by CBDT, circulars issued by the Central Excise Authorities as .....

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03'. By considering the various materials, the notification of the Government becomes absolutely clear. ii) Subsection (2) of section 80IC which is an enabling provision for grant of deduction very clearly provides that deduction is available to the undertaking which either begun or begins to manufacture or produce an article or thing or undertake substantial expansion with reference to the State of Himachal Pradesh between 7th day of January 2003 and ending on 31st day of March, 2012. This .....

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areas as mentioned in section 80IC . Under section 80IB(4) also, the deduction was to be allowed to the industrial undertaking @ 100% of profits and gains for the five assessment years beginning with the initial assessment year and thereafter 25% (or 30% where the assessee is a company) and all the profits and gains derived from such industrial undertaking. It was pointed out that in the case of deduction u/s 80IB(4), there was a second proviso in the section by which it is clarified that the 1 .....

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at expression 'and undertakes substantial expansion' has been used in both sections 80IC(2(a) and 80IC(2)(b). However, it is to be noted that section 80IC(2)(a)(ii) is applicable to the state of Himachal Pradesh or Uttaranchal and similarly section 80IC(2)(b)(ii) is applicable to the state of Himachal Pradesh and state of Uttaranchal whereas section 80IC(a)(iii) and (b)(iii) are applicable to the North-Eastern states and when this is compared with the rate of deduction provided under sub .....

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state of Sikkim because in those cases deduction had been straight away provided @ 100% for all the 10 years. It was submitted that any interpretation of a provision which would render some part of the section otiose is not permissible under any rule of interpretation. Even the expression used in section 80IC(3)(ii) thereafter would become redundant in the case of State of Himachal Pradesh. v) A reference was made to the definition of the 'initial assessment year' u/s 80IC(8)(v). It was .....

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king or enterprise commences operation [relevant for the purpose of section 80IC(2)(b) ] or (c) The undertaking or enterprise which completes substantial expansion" Thus there can be only one initial assessment year and once an initial assessment year had been determined for a claim of deduction then there cannot be second initial assessment year for claim under the same section by the same undertaking. It was contended that if the decision by the Delhi Bench of the Tribunal in the case of .....

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an improbable and unworkable situation. vi) If the benefit of deduction of substantial expansion was to be allowed to the new undertaking which commenced production on or after 7.1.2003, then such undertaking would automatically be disqualified for the deduction because of the restriction provided in sub section (4) of section 80IC because such substantial expansion would amount to reconstruction of the business. vii) If the interpretation adopted by the assessee was to be followed, the same wou .....

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lso contended that Form No. 10CCB under clause 25(c) and (d) makes it absolutely clear that deduction u/s 80IC is permitted to two distinct kind of undertaking i.e new eligible business which commences production during the window period i.e. 7.1.2003 to 31.3.2012 which is new undertaking and secondly in the case of an existing business which undertakes substantial expansion. ix) It was contended that assessee has raised the contention that condition on carrying out substantial expansion was dur .....

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of Delhi Bench of the Tribunal in the case of Triputi LPG Industries Limited Vs. DCIT (supra) was per inquerim because it has not considered all the provisions of the Act and has merely relied on the decision of Hon'ble Supreme Court in the case of Bajaj Tempo Ltd (supra). It was pointed out that Supreme Court in another case of M/s Novapan India Ltd v Collector of Central Excise and Customs, Appeal (Civil) 3356 of 1984 has clearly held that it is not possible to agree with the submissions .....

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the case of K.P. Varghese vs Income Tax officer 131 ITR 597 (SC) has clearly observed that if a particular provision is required to be interpreted then not only Circular but anything 'which is logically relevant' should be considered. A similar view was taken by the Karnataka High Court in the case of CIT Vs. M.S. Vaidya 224 ITR 186 (Karnataka). xi) A reference was also made to the decision relied on behalf of the assessee of the Chandigarh bench of the Tribunal in the case of DCIT Chand .....

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tion 80IC. Therefore, it is clear that this is a clear case of expansion of existing unit which existed before 7.1.2003 and therefore, it is clearly distinguishable from the facts of the case of the assessee. It was further pointed out that decisions relied on behalf of the assessee are totally distinguishable on their own facts. 21. In the rejoinder, the submissions made by Ld. Shri Pavan Ved can be summarized as under:- a) It was submitted that the expression 'initial assessment year' .....

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ot claimed deduction after period of 10 years. If substantial expansion was carried out for the first time then assessee was entitled to benefit of 100% deduction excluding profits of existing units, therefore, the only inference should be that in case of subsequent expansion also 100% profit would be eligible. There cannot be a theory of segregation of profits into profits relatable to existing units and profits related of expanded units. Further, since substantial expansion has no relationship .....

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5th year on the ground of being existing unit as on 1.4.2004. d) Even if there is no separate provision u/s 80IC to give deduction of substantial expansion still the eligible unit is eligible for deduction u/s 80IC if the assessee makes investment in the same units and therefore, section 80IC should be interpreted to give benefit to the assessee on the basis of substantial expansion. e) The decision in the case of M/s Novapan India Ltd v Collector of Central Excise and Customs (supra) was relat .....

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rpreting the provisions under direct tax. f) In respect of the 100% deduction u/s 80IC (2)(i) to the state of Sikkim and North-eastern states as contended by the Revenue, it was pointed out that Legislature can choose to give more benefit to any particular area. 22. We have considered the rival submissions including written submissions in the light of material on record, as well as judgments cited by the parties. Before we consider the relevant provisions which are required to be interpreted, it .....

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9;Hon'ble Apex Court' in the case of Orissa State Warehousing Corporation Vs. CIT 237 ITR 607 wherein it has been observed at page 604 & 605 of the report as under:- "Let us, however, at this juncture, consider some of the oft cited decisions pertaining to the interpretation of the fiscal statutes being the focal point of consideration in these appeals. Lord Halsbury as early as 1901, in Cooke v. Charles A. Vogeler Company [1901] AC 102 (HL) stated the law in the manner followin .....

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-section be not controlled by some of the other provisions of the statute. It must, since, its language is plain and unambiguous, be enforced and your Lordships' House sitting judicially is not concerned with the question whether the policy it embodies is wise or unwise, or whether it leads to consequences just or unjust, beneficial or mischievous." The oft-quoted observations of Rowlattt J. in the case of Cape Brandy Syndicate v. IRC [1921] 1 KB 64 ought also to be noticed at this junc .....

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milar in IRC v. Ros and Coulter (Bladnoch Distillery Co. Ltd. v. The King [1946] Hon'ble Apex Court 119; [1945] 2 All ER 499. Lord Thankerton also in a manner similar in IRC v. Ross and Coulter (Bladnoch Distillery Co. Ltd. [1984] 1 All ER 616 at page 625 observe: "If the meaning of the provision is reasonably clear, the courts have no jurisdiction to mitigate such harshness." The decision of this court in Keshavji Ravji and Co. v. CIT[1990] 183 ITR 1also lends concurrence to the v .....

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wn terms, ambivalent and do not manifest the intention of the Legislature… Artificial and unduly latidudinarian rules of construction, which with their general tendency to 'give the taxpayer the breaks', are out of place where the legislation has a fiscal mission." Be it noted that individual cases of hardship and injustice do not and cannot have any bearing for rejecting the natural construction by attributing normal meaning to the words used since "hard cases do not ma .....

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as under:- "A statutory provision must be so construed, if possible, that absurdity and mischief may be avoided. Where the plain literal interpretation of a statutory provision produces a manifestly absurd and unjust result which could never have been intended by the legislature, the court may modify the language used by the legislature or even do some violence to it, so as to achieve the obvious intention of the legislature and produce a rational construction. Luke v. IRC [1963] Hon'b .....

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s is an accord with the recent trend in juristic thought not only in western countries but also in India, that the interpretation of a statute being an exercise in the ascertainment of meaning, everything which is logically relevant should be admissible. The marginal note to a section cannot be referred to for the purpose of construing the section but it can certainly be relied upon as indicating the drift of the section or to show what the section is dealing with. It cannot control the interpre .....

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186 (supra) and observations contained in the head note reads asunder:- "The legislative history of a fiscal statute could be traced and considered to understand its scope. The courts are permitted to travel beyond the words used in a statute, to find out the purpose for which a particular provision is enacted; for this purpose, even the speech of the Finance Minister, while introducing the particular fiscal legislation could be looked into. The Circulars issued by the Central Board of Dir .....

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are not binding on the Courts, therefore, the same should not be considered for interpretation of a particular provision. As far as the decision in the case of Commissioner of Central Excise Vs. M/s Rattan Melting & Wire (supra) is concerned, this does not support the proposition made by the Ld. Counsel for the assessee. In that case the question was whether a circular issued by the Department which is generally binding on the authorities would take precedence over the interpretation made by .....

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ew expressed in a decision of this Court or the High Court. So far as the clarifications/circulars issued by the Central Government and of the State Government are concerned they represent merely their understanding of the statutory provisions. They are not binding upon the court. It is for the Court to declare what the particular provision of statute says and it is not for the Executive. Looked at form another angel, a circular which is contrary to the statutory provisions has really no existen .....

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. 25. In the case of Dinakar Ullal vs CIT 323 ITR 452(Karnataka), the assessee was a Civil contractor and had filed belated return declaring income of ₹ 50,240/- and was claiming refund of ₹ 2,14,505/- on account of tax deducted at source. The last date of filing the return was 31.3.1997 but the return was filed late on 8th September 1997. The assessee sought condonation of delay by an application filed on 21st Sept, 1998 by invoking section 119(2)(b) of the Act which was initially r .....

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these instructions were contrary to the provision of section 244A of the Act which provided for payment of interest on refunds. This becomes absolutely clear from the question framed by Hon'ble Court which is contained at placitum 6 and reads as under:- "(i) Whether the condition to deny interest on refund amount due to an assessee under the Act, while admitting an application to condone the delay in making a claim for belated refund under section 237 of the Act, as contained in Instruc .....

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visions of section 244A. The court also observed that circular could be issued to clarify the provisions for removing the difficulties. Therefore, it is clear that question whether a circular can be considered in interpretation of a particular provision was never before the Court and therefore, in our opinion, this judgement does not support the proposition that circular cannot be considered for the purpose of interpreting the particular provision. 27. It will be useful to state another very wel .....

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nsider the provision of section 80IC in the light of the above principles laid down by the Hon'ble Supreme Court. Section 80IC reads as under:- Section 80IC "80-IC (1) Where the gross total income of an assessee includes any profits and gains derived by an undertaking or an enterprise from any business referred to in sub-section (2), there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction from .....

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g 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 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 (ii) on the 7th day of January, 2003 and ending before the 1st day of April, 2012, in any Export Processing Z .....

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tructure 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 any of the North-Eastern States; (b) which has begun or begins to manufacture or produce any article or thing, specified in the Fourteenth Schedule or commences any operation specified in that Schedule, or which manufactur .....

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nding before the 1st day of April, 2007, in any of the North-Eastern States. (3) The deduction referred to in sub-section (1) shall be - (i) in the case of any undertaking or enterprise referred to in sub-clauses (i) and (iii) of clause (a) or sub-clauses (i) and (iii) of clause (b), of sub-section (2), one hundred per cent of such profits and gains for ten assessment years commencing with the initial assessment year; (ii) in the case of any undertaking or enterprise referred to in sub-clause (i .....

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istence: Provided that this condition shall not apply in respect of an undertaking which is formed as a result of there-establishment, reconstruction or revival by the assessee of the business of any such undertaking as is referred to in section 33B, in the circumstances and within the period specified in that section; (ii) it is not formed by the transfer to a new business of machinery or plant previously used for any purpose. Explanation.- The provisions of Explanations 1 and 2 to sub-section .....

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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 the 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 s .....

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h centres, which the Board, may, by notification in the Official Gazette, specify in accordance with the scheme framed and notified by the Central Government; (iv) "Industrial Park" means such parks, which the Board, may, by notification in the Official Gazette, specify in accordance with the scheme framed and notified by the Central Government; (v) "Initial assessment year" means the assessment year relevant to the previous year in which the undertaking or the enterprise beg .....

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hnology Park" means any park set up in accordance with the Software Technology Park Scheme notified by the Government of India in the Ministry of Commerce and Industry; (ix) "Substantial expansion" means increase in the investment in the plant and machinery by at least fifty per cent of the book value of plant and machinery (before taking depreciation in any year), as on the first day of the previous year in which the substantial expansion is undertaken; (x) "Theme Park" .....

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or begins manufacturing of any article or things not being any article or thing specified in Schedule xiii and also undertakes substantial expansion. These deductions were available in different states during different window periods which have been referred to in clause (i), (ii) & (iii) of this sub section. The contention on behalf of the assessee is that since deduction is available to the undertaking which undertakes substantial expansion and since there is no restriction in this sub sec .....

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ng which were already existing and began the manufacture before the window period mentioned in the sub section. The last line of the sub section reads "and undertakes substantial expansion during the period beginning……..".". This would naturally refer to the undertaking which were already existing. If it is read the way the Ld. counsel of the assessee would like us to read then the provision would become unworkable because if there is an undertaking which is establis .....

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refore, the expression 'and' can be correlated only with existing unit because as we have already seen a new unit which has been set up and begins production cannot simultaneously undergo substantial expansion also so as to become eligible for deduction under this section. 30. At this stage, it can be said that section has some confusion and some effort is required to understand the correct intention of the Legislature by keeping various principles of interpretation. Therefore, various p .....

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nomies of these hilly states. Circular No.7 was issued by the CBDT on 5.9.2003 in this respect and the Circular reads as under:- "Circular No. 7/2003 dated 05.09.2003 49. New provisions allowing a ten years tax holiday in respect of certain undertakings in the States of Himachal Pradesh, Sikkim, Uttaranchal and North-Eastern States. 49.1 The Union Cabinet has announced a package of Fiscal and non-fiscal concessions for the special category States of Himachal Pradesh, Uttaranchal, Sikkim and .....

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machinery by at least 50% of the book value of the plant and machinery (before taking depreciation in any year), as on the first day of the previous year in which the substantial expansion is undertaken. 49.2 The section provides that the deduction shall be available to such undertakings or enterprises which manufacture or produce any article or thing, not being any article or thing specified in the Thirteenth Schedule and which commence operation in any Export Processing Zone, or Integrated In .....

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of the profits of the undertaking for ten assessment years. The amount of deduction in case of undertakings or enterprises in the States of Uttaranchal, Himachal Pradesh shall be one hundred per cent of the profits of the undertaking for five assessment years, and thereafter twenty-five per cent (thirty per cent for companies )for the next five assessment years. 49.4 The section also provides that no deduction shall be allowed to any undertaking or enterprise under this section, where the total .....

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icles and things, which are ineligible for the purpose of deduction under section 80-IC. Further, a new Fourteenth Schedule has also been inserted, which specifies the list of articles and things, being thrust sector industries, which are eligible for the purposes of availing deduction under this section. Consequent to theses amendments, the provisions of section 10C and sub-section(4) of section 80-IB have been made inoperative in respect of the undertakings or enterprises in the State of Himac .....

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f new undertaking or enterprise or existing undertaking or enterprise on their substantial expansion (see highlighted portion of the circular). The contention of the Ld. Counsel of the assessee was that word 'existing' qualifies only the undertaking or enterprises and does not mention any particular date for carrying out substantial expansion. We find no merit in this contention. The word 'existing is defined in the dictionaries are as under:- 32. Black Law Dictionary - 6th Edition:- .....

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of these monkeys still exist in the wild. On his retirement the post will cease to exist. The charity exists to support victims of crime. 2- (on sth) to live, especially in a difficult situation or with very little money: We existed on a diet of rice. They can't exist on the money he's earning The above definition clearly shows that 'exist' would refer to something which is in force presently. 'Exist' would generally and in common sense refers to something which is alrea .....

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ment of the hilly states. Section 5, reads as under;- "Definitions: (a)….. (b)….. (c)Existing Industrial Unit' means an industrial unit existing as on 7th January 2003. (d).......... (e)............. (f) …" Thus the definition given above makes it clear that existing Industrial Unit would mean an unit which existed on 7.1.2003. 33. Even if the above controversy is ignored regarding existing unit, the intention of the Legislature become absolutely clear when sub .....

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uction for a period of 10 assessment years in cases covered by sub clause (i) & (iii) of clause (a) and sub clause (i) & (iii) of clause (b). Now sub clause (i ) and (iii) of clause (a) of sub section (2) refers to the window period in case of State of Sikkim, North-Eastern States whereas sub clause (ii) refers to the window period in case of State of Himachal Pradesh and State of Uttaranchal. Similarly, sub clause (i) & (iii) of clause (b) refers to window period in case of State of .....

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of new undertaking or in case of substantial expanded undertaking deduction is to be allowed @ 100% for whole of the ten years whereas in case of State of Himachal Pradesh and Uttaranchal the deduction was to be allowed @ 100% only for first five years and thereafter it was only 25%. If the Legislature wanted to extend the benefit in the case of substantial expansion separately then the rate of deduction in the clause (i) & (ii) of sub section (3) would not have been different i.e. 100% for .....

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allowed in case of State of Himachal Pradesh and State of Uttaranchal, then meaning of substantial expansion as given under sub section (2) which is same for the state of Sikkim and North-Eastern states become redundant. As noted earlier, the provision cannot be interpreted in such a way that part of the section becomes redundant or otiose. Therefore, whatever doubts may be there in sub section (2) when it is read with sub section (3), those doubts are totally removed and it become absolutely cl .....

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new business of machinery or plant previously used for any purpose. Further the explanation to this Sub Section makes it clear that Explanation 1 & 2 of Sub Section (3) of Section 80IA are applicable in this respect. Explanation 2 of Sub Section (3) of Section 80 IA reads as under: "Explanation 2- Where in the case of an [undertaking], any machinery or plant or any part thereof previously used for any purpose is transferred to a new business and the total value of the machinery or plan .....

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ion the investment in Plant & Machinery is required to be made by atleast 50%. So if 50% fresh machinery is added to the new unit then it will violate Sub Section (4) of Section 80IC, therefore, interpretation canvassed on behalf of the assessee is not possible because Section 80IC(4) would become redundant and such an interpretation is not possible. 35. Further, sub section (6) provides that in no case the total period of deduction could exceed the period of 10 years including deduction ava .....

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ial expansion is carried out then according to the interpretation canvassed on behalf of the assessee, such unit would again become entitled to 100% deduction for another five years and further block of five years every time substantial expansion is carried out. If this interpretation is adopted then deduction would become almost perceptual as long as the assessee has carried out substantial expansion but in that case sub section (6) would loose its meaning. Such an unlimited period of deduction .....

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the same contention which has been made before us. In case of M/s Mahavir Industries (ITA No. 127/Chd/2011 and ITA No. 791/Chd/2012) though those cases were adjourned because some other issues were also there but in those two cases assessee had commenced the operation on 8.5.1997 and claimed deduction u/s 80IB from assessment years 1998-99 to 2005-06. Later on, substantial expansion was carried out in assessment year 2005-06 and on the basis of the contention that assessee is allowed to carry o .....

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f section 80IC is compared to the provision of section 80IB(4). Relevant provision of Section 80IB (4) reads as under:- "(4) The amount of deduction in the case of an industrial undertaking in an industrially backward State specified in the Eighth Schedule shall be hundred per cent of the profits and gains derived from such industrial undertaking for five assessment years beginning with the initial assessment year and thereafter twenty-five per cent (or thirty per cent where the assessee is .....

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ch, [2004]: Provided further that in the case of such industries in the North-Eastern Region, as may be notified by the Central Government, the amount of deduction shall be hundred per cent of profits and gains for a period of ten assessment years, and the total period of deduction shall in such a case not exceed ten assessment years: Provided also that no deduction under this sub-section shall be allowed for the assessment year beginning on the 1st day of April, 2004 or any subsequent year to a .....

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rs and thereafter @ 25%. Further, the first proviso makes it clear that deduction will not exceed 10 consecutive assessment years. The second proviso further makes it clear that in the case of states of North-Eastern regions, the deduction would be @ 100% for all the 10 years. Thus, even in the earlier provision only in case of North-Easter states, the deduction of 100% was allowable for 10 years whereas in the case of states of Himachal Pradesh, the deduction was allowable @ 100% for first five .....

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ssment years.- Section 80-IC(6) also opens with a non obstante clause "Notwithstanding anything contained in", and provides that no deduction shall be allowed to any undertaking or enterprise under section 80-IC, - where the total period of deduction inclusive of the period of deduction - under section 80-IC, or - under the second proviso to section 80-IB(4) or - under section 10C as the case may be, exceeds 10 assessment years." 39. Lastly, it was contended that initial assessmen .....

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to be read as a mutually exclusive expression which refers to a particular situation by excluding the other situation. Therefore, initial assessment year would clearly commence either on commencement of operation or at completion of substantial expansion of existing unit. In any case the word 'initial' cannot be used twice by referring to series of events. This can be understood with a very simple example. Let us say a person 'A' passes out his examination of LLB and get employed .....

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ear to allow 100% for first five years in case of units situated in the State of Himachal Pradesh (since all the cases before us are situated in the State of Himachal Pradesh) and thereafter 25% deduction for another five years on the new units or the existing units where substantial expansion was carried out. 40. It has also been contended that incentive provision should be construed liberally. Further, it was contended with reference to the decision of M/s Novapan India Ltd vs Collector of Cen .....

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a Ltd v Collector of Central Excise and Customs (supra), it was observed as under:- "The learned counsel for the appellant then contended that since there is an ambiguity about the meaning and purport of item-6 of the table appended to the Exemption Notification, the benefit of such ambiguity should go to the assessee manufacturer and the entry must be construed as taking in the MFPBs as well. It is not possible to agree with this submission. In Mangalore Chemicals & Fertilizers Ltd.. v .....

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s from taxation have a tendency to increase the burden on the other un-exempted class of tax payers and should be construed against the subject in case of ambiguity. It is an equally well known principle that a person who claims an exemption has to establish his case. Indeed, in the very case of Parle Exports (P) Ltd. relied upon by Shri Narasimhamurthy, it was observed. "While interpreting an exemption clause, liberal interpretation should be imparted to the language thereof, provided no v .....

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eaning, there is not need for any interpretation." "We are, however, of the opinion that, on principle, the decision of the Court in Mangalore Chemicals - and in Union of India v. Wood Papers, referred to therein - represents the correct view of law. The principle that in case of ambiguity, a taxing statute should be construed in favour of the assessee -assuming that the said principle is good and sound- does not apply to the construction of an exception or an exempting provision; they .....

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goes in favour of the assessee, but the fact remains and the law is well-settled on this score that in the matter of interpretation of the taxing statutes the law courts would not be justified in introducing some other expressions which the legislature thought fit to omit. In the present context, there is no doubt as to the meaning of the words used in the section by reason of the language used, neither there is any difficulty in ascertaining the statutory intent. Incidentally, it cannot but be .....

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ction was meant only for new units or in case of old units if substantial expansion was carried out in such old units and deduction was available only for a period of 10 years. Therefore, there is no question of giving any interpretation much less liberal interpretation to section 80IC when the reading of whole section makes the provision very clear. As observed in case of M/s Novapan India Ltd v Collector of Central Excise and Customs (supra) the burden was on the assessee to show under which c .....

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s and old units. Because the old units would be entitled to 100% deduction on expansion for first five years and 25% thereafter whereas the new units would become entitled to deduction for 100% for first five years and again @ 100% on substantial expansion. Such discriminatory intention cannot be imputed to the Legislature. 43. Before us, reliance was also placed on the decision of Delhi Bench of the Tribunal in the case of Triputi LPG Industries Limited Vs. DCIT(supra). In this decision, the Be .....

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IB in assessment year 1999-2000 @ 100%. The deduction was claimed @ 100% for five years and then deduction was claimed @ 30% on the profits in the next year. The assessee undertook substantial expansion in financial years 2004-05 & 2005-06 and claimed deduction at the rate of 100% on the basis of such substantial expansion in assessment year 2006-07. However, the deduction was wrongly claimed u/s 80IB instead of section 80IC. The CIT(A) allowed the deduction by observing that deduction could .....

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ly M/s. Himachal Power Products was formed on 23.05.2009. The firm commenced commercial production in March, 2010. Shri Abhishek Bhargav while planning to join the firm as partner by acquiring 20% share of profit and enhancing additional manufacturing facility by undertaking substantial expansion sought advance ruling on the issue whether the introduction of new partner would be treated as reconstruction of the existing business or the firm will be entitled to the benefit of substantial expansio .....

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claim of deduction cannot be denied merely on the ground of expansion of manufacturing capacity so long it is not a case of restructuring of business already in existence. However, the question whether the assessee shall be entitled to deduction of 100% of its profit even after A.Y. 2014-15 i.e. for 2 more years beyond A.Y. 2014-15 is left open and not decided by the AAR. Therefore this decision is totally distinguishable and does not help the case of the assessee. 46. The last decision relied .....

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ct the Bench referred to the decision of Delhi Bench in the case of Triputi LPG Industries Limited Vs. DCIT (supra) without considering the provision of section 80IC in detail for reaching the conclusion that it is one of the possible view. Since we have already discussed the decision of Triputi LPG Industries Limited Vs. DCIT (supra) and found that all the provisions of the section were not discussed in that section and that is per inquerim, therefore, in our opinion, this order does not help t .....

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the District/State in which located :- (b) Khasra No. of the undertaking or enterprise (Also indicate the Board's Notification No.) :- (c) If the eligible business is new, please give the date of commencement of production or manufacture of article or thing. :- (d) If the existing business has undertaken substantial expansion, please specify,- :- (i) The date of substantial expansion (ii) The total book value of plant and machinery (before taking depreciation in any year)as on first day of t .....

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or thing or operation) :............. 48. The careful reading of the form in a serial order would clearly show that the assessee is required to inform the location of the Industry and column (c) specifically ask the assessee to state whether business is a new business? Column (d) clearly ask the assessee whether existing business has undertaken substantial expansion, therefore, there are two categories of business and substantial expansion is possible only in case of existing business. In our op .....

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ccordingly, assessee's appeal is dismissed. 50. In the result, appeal of the assessee is dismissed. ITA 374/Chd/2014 - assessment year 2010-11 51. In this appeal the assessee has raised the following grounds:- 1. Under the facts and circumstances of the case and in law, the order dated 27.01.2014 passed by the Ld. CIT(Appeals), Shimla u/s 250(6) of the Income Tax Act, 1961 is bad in law, illegal, without jurisdiction and void. 2. Under the facts and circumstances of the case and in law, Ld. .....

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undertaken during the period beginning on 7th January 2003 and ending before 1st April 2012 and erroneously upholding that the benefit of 100% deduction u/s 80-IC of the Act for first five years in case of substantial expansion is available only to the units that existed and were operational as on 07.01.2003 and such benefit is not at all meant for the units that came into being on or after the introduction of the scheme of such deduction. III. Upholding that once an 'initial assessment year .....

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adesh. 3. Under the facts and circumstances of the case and in law, Ld. CIT(Appeals), Shimla has erred in affirming the order of Ld. ITO, Baddi in restricting the appellant's claim of Other Income of ₹ 19,75,825/- being eligible for deduction U/s 80IC of the IT Act, 1961. 4. Under the facts and circumstances of the case and in law, Ld. CIT (Appeals), Shimla has erred in affirming the order of Ld. ITO, Baddi in levying interest u/s 234-B of the IT Act 1961. 53. Ground No. 2 : The issue .....

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(Rs.) Interest received on Margin Money 2,85,876/- Interest received on others 70,328/- Foreign Exchange Fluctuation 15,46,066/- Miscellaneous Income 73,542/- Sundry Credit balances written back 13/- Total 19,75,825/- 55. On this income the assessee has claimed deduction u/s 80IC. It was observed by Assessing Officer that this income has not been derived from the Industrial Undertaking and does not have first degree nexus with the manufacturing activity. Therefore, assessee was asked to justify .....

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money is directly related the business. Similarly, foreign exchange transactions are carried out during the course of business, therefore, the same is eligible for deduction u/s 80IC of the Act. It was further submitted that Chandigarh Bench of Tribunal in case of M/s Ansysco Vs. ACIT in ITA No. 895/Chd/2012 and others has held that income from Foreign Exchange Fluctuations was directly linked to the business activity therefore deduction should be allowed. 57. On the other hand the Ld. DR strong .....

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te nexus with the assessee's industrial undertaking. Although electricity may be required for the purposes of the industrial undertaking, the deposit required for its supply is a step removed from the business of the industrial undertaking. 59. After the above observation, it was held as under: - "Held accordingly, that interest derived by the industrial undertaking of the assessee on deposits made with the Electricity Board for the supply of electricity for running the industrial under .....

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- and ₹ 70,328/- are not entitled for deduction u/s 80IC and accordingly we confirm the action of the Assessing Of ficer and CIT(A) in this respect . 61. As far as the amount received on foreign exchange fluctuation is concerned, though in case of M/s Ansysco Vs. ACIT(supra) it was held that gain from Foreign Exchange Fluctuat ions was directly related to the business activity therefore assessee was entitled to deduction. However the details are not incorporated in the assessment order or .....

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CIT(A) in respect of these two items are also confirmed. 62. In the result the appeal is partly allowed for statistical purposes. ITA No. 866/Chd/2014 (assessment year 2010-11) 63. In this appeal the assessee has raised various grounds. However, it was pointed out that only two disputes are involved namely : Issue No. 1 - Denial of 100% deduction on account of substantially expanded unit Issue No. 2- Denial of deduction under section 80IC on account of Foreign Exchange Fluctuation. 64. Issue No. .....

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the file of AO with similar direction as contained in Para 61. 66. In the result appeal is partly allowed for statistical purposes ITA No. 867/Chd//2014 (assessment year 2011-12) 67. In this appeal the assessee has raised various grounds. However, it was pointed out that only three disputes are involved. Issue No.1 - Denial of 100% deduction on account of substantially expanded unit Issue No. 2- Denial of deduction under section 80IC on account of Foreign Exchange Fluctuations Issue No. 3- Confi .....

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llowing the same set aside the order of Ld. CIT and remit the matter back to the file of AO with similar direction as contained in Para 61. 70. Issue No. 3: After hearing both the parties we find that during assessment proceedings it was noticed that assessee has made certain investment in shares and Mutual Funds. Therefore, Assessing Officer invoked the provisions of section 14A read with rule 8D and made total disallowance of ₹ 87,500/-. 71. On appeal, the action of the Assessing Officer .....

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the result, appeal is partly allowed for statistical purposes. ITA No. 868/Chd/2014 (assessment year 2010-11) 75. In this appeal the assessee has raised only one issue regarding denial of deduction under section 80IC @100% for new unit which has been expanded. 76. Since this issue as well as contentions remain the same has been decided by us in case of M/s Hycron Electronics Vs. ITO, Himachal Pradesh in ITA No. 798/Chd/2012 in vide para no. 22-49. Following the same, we decide this issue against .....

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peal is dismissed ITA No. 895/Chd/2014 81. In this appeal assessee has raised only one issue regarding denial of deduction under section 80IC on account of Foreign Exchange Fluctuations. 82. This issue has already been decided by us in case of M/s Hycron Electronics, Baddi, Solan in ITA No. 374/Chd/2014 vide Para No. 61. Therefore following the same set aside the order of Ld. CIT and remit the matter back to the file of AO with similar direction as contained in Para 61. In the result appeal of t .....

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by ignoring the fact that these statutory dues are clearly deposited before the due date of filing of return of income. 83. Issue No. 1- Since the issue as well as contentions remain the same has been decided by us in case of M/s Hycron Electronics Vs. ITO, Himachal Pradesh in ITA No. 798/Chd/2012 in vide para no. 22-49. Following the same, we decide this issue against the assessee. 84. Issue No. 2: This issue has already been decided by us in case of M/s Hycron Electronics, Baddi, Solan in ITA .....

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or the assessee submitted that the amount were paid before the due date of filing of return and therefore this amount were allowable. 88. On the other hand Ld. DR strongly supported the order of Ld. CIT(A). 89. After considering the rival submissions carefully we find that Hon'ble Punjab & Haryana High Court in case of CIT Vs. Nuchem Ltd. in ITA No. 323 of 2009 has clearly held that if amount have been paid before the due date of filing of return then such dues are allowable. However, we .....

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ntitled to increased deduction under section 80IC as consequences. 90. In the result appeal of the assessee is partly allowed for statistical purposes. ITA No. 897/Chd/2014 91. In this appeal various grounds have been raised but only three disputes are involved namely: Issue No. 1: Denial of 100% deduction on account of substantially expanded unit Issue No. 2: Disallowance on account of late payment of ESI & PF dues. Issue No. 3; Confirmation of addition for non charging interest from partne .....

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and remit the matter back to the file of AO with a direction to verify that if amounts have been paid before due date of filing of return then the same may be allowed otherwise the issue should be decided in accordance with the law. We may also like to point out that if ultimately disallowance is made on this account then the profit of the assessee would increase and assessee would be entitled to increased deduction under section 80IC as consequences. 94. Issue No. 3: After hearing both the part .....

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not be made. In response it was mainly submitted that there was credit balance in the case of other two partners i.e; Mrs. Kavita Desadla amounting to ₹ 78,99,736/- and Mrs. Sandeepa Bafna amounting to ₹ 91,97,812/-. Where as total debit balance in the two accounts was only ₹ 1,19,78,312/-. Further the profits is earned from day to day and if profit earned during the year was credited on monthly basis then there would not be any debit balance. In any case the firm has itself d .....

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in the partnership deed which required to charge interest on debit balance on the partners account. In fact there was no credit made to the partners account on their capital balance therefore the disallowance was not justified and reliance was placed on few tribunal decisions. 97. Ld. CIT did not agree with these submissions however she gave a direction that in view of the decision of Chandigarh bench of Tribunal in case of Mega Package in ITA No. 755/Chandi/2011 that if profit is enhanced beca .....

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m was not bound to charge interest. Secondly since no interest have been allowed to the partners therefore overall balance of all the partners should have been examined and if such examinations is made then the overall balances in the capital account would be credit balance. Thirdly in any case assessee has already disallowed the sum of ₹ 12,00,000/- on this account. Therefore in our opinion there is no justification for this disallowance and accordingly we set aside the order of Ld. CIT(A .....

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issue against the assessee. 104. In the result appeal of the assessee is dismissed. ITA No. 783/Chd/2014 105. In this appeal various grounds have been raised but the only issue is regarding disallowance of denial of claim of deduction under section 80IC @ 100%. 106. Since this issue as well as contentions remain the same as has been decided by us in case of M/s Hycron Electronics Vs. ITO, Himachal Pradesh in ITA No. 798/Chd/2012 in vide para no. 22-49. Following the same, we decide this issue a .....

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cs Vs. ITO, Himachal Pradesh in ITA No. 798/Chd/2012in vide para no. 22-49. Following the same, we decide this issue against the assessee. 110. Issue No. 2- After hearing both the parties we find that during the assessment proceedings AO noticed that assessee's firm was using technical know how of M/s Optima Diamond Tools Pvt. Ltd. which was a sister concern but no compensation was being paid for the same. Initially assessee tried to justify the claim however, later on assessee offered to re .....

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addition. 113. On the other hand Ld. DR refered to the assessment order and pointed out that assessee has agreed for this addition. 114. After considering the rival submissions we find that Ld. CIT(A) has adjudicated this issue vide para 6.3 which is as under: 6.3 After consideration of the facts of the case and appellant's submission it is noted that appellant itself has offered the reduction of ₹ 15,00,000/- from eligible profits for deduction u/s 80IC on account of technical know-ho .....

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also agreed, therefore I do not find any defect in the addition made by the A.O. The appellant fails on this ground of appeal. Since assessee has already agreed for the addition therefore assessee cannot be said to be aggrieved about this addition and therefore same was not even appealable as the assessee cannot be said to be aggrieved by such order which is made on the basis of concession. In this regard reference may be made to the decision of Hon'ble Punjab & Haryana High court in th .....

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how rendered by its partner and reducing the claim 117. Issue No. 1-Since the issue as well as contentions remain the same as has been decided by us in case of M/s Hycron Electronics Vs. ITO, Himachal Pradesh in ITA No. 798/Chd/2012in vide para no. 22-49. Following the same, we decide this issue against the assessee. 118. Issue No. 2-This issue has been decided by us in assessee's own case for assessment year 2010-11 in ITA No. 175/Chd/2011 vide para 114. Following the same we decide this is .....

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. 122. In the result appeal of the assessee is dismissed. ITA No. 195/Chd/2014 123. In this appeal assessee has raised only one issue i.e; denial of deduction under section 80IC on account of substantial expanded unit. 124. Since this issue as well as contentions remains the same as has been decided by us in case of M/s Hycron Electronics Vs. ITO, Himachal Pradesh in ITA No. 798/Chd/2012 in vide para no. 22-49. Following the same, we decide this issue against the assessee. 125. In the result app .....

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ron Electronics Vs. ITO, Himachal Pradesh in ITA No. 798/Chd/2012 in vide para no. 22-49. Following the same, we decide this issue against the assessee. 128. Issue No. 2- The brief facts are that Shri. Umesh Anand was running a sole proprietorship concern under the name and style of M/s Pranav Associates in his HUF capacity as karta. Upto the assessment year 2007-08 the assessee firm was having business transactions with M/s Pranav Associates for purchase of Raw material and components. The last .....

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adverse inference was taken in Assessment year 2007-08, 2008-09 and 2009-10 where assessments were completed under section 143(3). Further it was a trade advance and no interest could have been charged. 129. On appeal the action of AO was confirmed by the Ld. CIT(A). 130. Before us Ld. Counsel for the assessee submitted that it was a case of trade advance and therefore no interest could have been charged in any case no disallowance was made in the earlier assessment year which were completed un .....

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f Ld. CIT(A) and delete this addition. 133. In the result appeal of the assessee is partly allowed for statistical purposes. ITA No. 777/Chd/2014 134. In this appeal the assessee has raised various grounds. However, it was pointed out that only three disputes are involved namely : Issue No.1- Ground No. 1-Denial of 100% deduction on account of substantially expanded unit. Issue No. 2. Confirmation of disallowance on account of late payment of provident fund amounting to ₹ 44,588/-. Issue N .....

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/s Sansui Electronics Vs. ITO, Himachal Pradesh in ITA No. 896/Chd/2014 vide para no. 89. Therefore following this decision we set aside the order of Ld. CIT(A) and remit the matter back to the file of AO who is directed to follow the directions contained in para 89 of this order. 137. In the result appeal of the assessee is allowed for statistical purposes. ITA No. 780/Chd/2014 138. In this appeal assessee has raised only one issue i.e; denial of deduction under section 80IC on account of subst .....

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141. Since this issue as well as contentions remains the same as has been decided by us in case of M/s Hycron Electronics Vs. ITO, Himachal Pradesh in ITA No. 798/Chd/2012 in vide para no. 22-49. Following the same, we decide this issue against the assessee. 142. In the result appeal of the assessee is dismissed. ITA No. 1051/Chd/2014 143. In this appeal assessee has raised only one issue i.e; denial of deduction under section 80IC on account of substantial expanded unit. 144. Since this issue .....

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