TMI Blog2016 (5) TMI 1256X X X X Extracts X X X X X X X X Extracts X X X X ..... he extent of 25% as against 100%. 2. Briefly the facts of the case are that assessee is engaged in manufacturing of DVD players, SMPs Remotes, Lens and other electronic components. The assessee started production during financial year 2004-05 and claimed deduction under section 80IC of the Act for the first time in assessment year 2005-06 and claimed deduction @ 100% for the initial five assessment years starting with assessment year 2005-06. In the assessment year under appeal i.e. 2010-11, assessee undertook substantial expansion and claimed deduction under section 80IC again @ 100%. The Assessing Officer was of the view that the existing business does not mean the new enterprise or undertaking existing for the last 5 years but it means that enterprise or undertaking existing prior to 07.01.2003 and manufacturing or producing any article or thing as stipulated in Section 80IC of the Act. Accordingly, the assessee's claim of deduction under section 80IC of the Act was restricted to 25% only. 3. The assessee alongwith written submission before ld. CIT(Appeals) enclosed order of the Tribunal in ITA 798/CHD/2012 in the case of Hycron Electronics V ITO. It was admitted by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act it cannot be changed even if such undertaking completes substantial expansion and again qualifies for deduction under the said section on the basis of 'qualifying expansion'. 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 products. The unit started commercial production from 17.1.2004. The assessee had claimed deduction u/s 80IC on the products of this unit @ 100% from assessment years 2004-05 to 2008-09. Subsequently, during financial year 2008-09, the assessee firm undertook substantial expansion by way of addition to plant and machinery by more than the prescribed limit, therefore, assessee again started claiming deduction u/s 80IC from assessment year 2009-10 (i.e; the year before us) @ 100%. 6. The Assessing Officer after examining the facts observed that assessee has fulfilled all the conditions fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company) of the profits and gains. As per sub-section (6) of Section 80IC, no deduction shall be allowed to any Undertaking or Enterprise UNDER THIS SECTION I.E. 80-IC, where the total period of deduction INCLUSIVE OF THE PERIOD OF DEDUCTION UNDER THIS SECTION of under the second proviso to sub-section (4) of section 80-IB or under section 10-C, as the case may be EXCEEDS 10 ASSESSMENT YEARS. Further 'initial assessment year' has been defined in the Act as INITIAL ASSESMENT YEAR means the assessment year relevant to 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. The undertaking is thus entitled to claim 100% deduction u/s 80IC of the I.T. Act for the next 5 assessment years provided that the overall period of claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 Asst. Year 2009-10 to be the initial Asst. Year is denied. In view of this Asst. Year 2004-05, relating to the previous year in which the assessee firm had commenced its business operation / activity on the basis of setting up of its new industrial undertaking is held to be the initial Asst. Year and that of Asst. Year 2009-10 to be the sixth Asst. Year for claim of deduction u/s 80-IC of the Act at the rate of 25% of its business profits. The assessee firm shall not be allowed the benefit of 100% 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%. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 775 (SC). 12. It was also contended that reference could not be made to the Circular issued by Central Excise Authorities because the language used in the Central Excise Act was different from the language used in Section 80IC. 13. The Ld. CIT(A) considered these submissions and observed that Section 80IC was enacted by the Finance Act, 2003 to give effect to a 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 such incentive. The Ld. CIT(A) thereafter referred to para No. 49 of Circular No. 7/2003 issued by the Board on 5.9.2003. According to her the plain reading of section 80IC along with circular made it abundantly clear that Special provision of Section 80IC were applicable to two kinds of undertaking or enterprises which are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rprises. 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 possibly crossover into the zone of new undertakings or enterprises, the new undertakings also obviously cannot be allowed to cross over into the zone meant for the old, pre-existing undertakings. The rules of the game have to be the same for all the participants or stakeholders. The use of the word OR in clause (a) and clause (b) of sub-section (2) to section 80IC also leaves no doubt about the fact that the provisions of section 80IC apply to two distinct types of undertakings or 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt that the provisions of section 80IC are amply clear as there exists no ambiguity of any kind as regards the import of the provisions or as regards the intention of the legislature. The language of the 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 the basis of above analysis, the action of the Assessing Officer was upheld. 19. Before us Ld. Counsel for the assessee Shri Pavan Ved led the arguments because many other counsels were also present who were representing other group cases. Shri Rakesh Gupta who was representing many appeals particularly in ITA No. 866 to 869/Chd/2014, 895 to 897/Chd/2014, 185/Chd/2014 etc. also made some submissions. All other counsels present in the Court representing various cases adopted the arguments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Secondly, there was certain inconsistency in the notification because while defining the existing industrial unit, it was stated that same would mean as unit existing on 7.1.2003 but when the word 'substantial expansion' was defined, the words used was of an 'industrial unit' and not an 'existing industrial unit'. Thirdly, notification cannot override the section which provides the legislature intent. Fourthly, the notification was not issued u/s 119 of the Income Tax Act and, therefore, has not binding force. Fifthly, as per this notification the substantial expansion was related to increase in capacity by 25% which was contrary to the criteria laid down in section 80IC i.e. 50% increase in investment. 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. A reference was made to clause (v) of sub-section (8) of section 80IC which defines 'initial assessment' year and it was pointed out that initial assessment year was with reference to bot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax Act, section 80IC was introduced w.e.f. 1.4.2004 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 well as the subsidy scheme issued by Ministry of Commerce and Industry, Department of Industrial Policy and Promotion, Govt. of India. The word 'existing unit' is not mentioned in section 80IC but this can be ascertained easily if the section is properly construed. In any case, the Circular No. 49/2003 issued by Central Excise Department as well as notification issued by Ministry of Commerce very clearly mention that existing unit would mean 'an industrial unit existing before 7.1.2003'. By considering the various materials, the notification of the Government becomes absolutely clear. ii) Subsection (2) of section 80IC which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t would be noted that under sub section 3(ii) the rate has been given @ 100% for five years for the States of Himachal Pradesh and Uttaranchal and thereafter 25% for next 5 years whereas under sub section 3(i) the rate has been given at 100% in the North Eastern states and state of Sikkim for whole of ten years. If the interpretation adopted by the assessee is correct then the meaning of substantial expansion would become redundant for the North-Eastern states and 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 pointed out that as per this section there could be only one initial assessment year for the purpose of section 80IC. This become very clear because the Legislature has used exclusionary word OR' before the words 'com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 during the widow period. However if this interpretation is accepted then the consequences would be that in the guise of expansion by investing a very small sum, the assessee would claim deduction of 100% for whole of the profits of such expanded undertaking which would mean that profit of older unit also gets benefit of 100% deduction which cannot be the intention of the legislature. x) While concluding his argument it has been submitted that there is no ambiguity in the provisions and the decision 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pleted and, therefore, in the case of the assessee, assessment year 2009-10 would be the initial assessment year. b) On proper interpretation of section 80IC(6), the assessee would be entitled for a fresh de novo commencing period of 10 years from the initial assessment year. Though it was clarified that assessee had not 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 with capacity and it is related to investment, therefore, it was not practically possible to work out separately profits related to substantial expansion because though investment may be 50% but the same may lead to increase of capacity to say 10% or other percentage. c) Though there is no doubt that an existing unit claiming benefit us 80IB(4) would necessarily swit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cisions 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 following: a court of law, has nothing to do with the reasonableness or unreasonableness of a provision of a statute except so far as it may h old it in interpreting what the Legislature has said. If the language of a statute be plain, admitting of only one meaning, the Legislature must be taken to have meant and intended what it has plainly expressed, and whatever it has in clear terms enacted must be enforced though it should not lead to absurd or mischievous results. If the language of this sub- 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 [19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the Hon'ble Supreme Court in the celebrated judgement of K.P. Vergese 131 ITR 598 (supra) are relevant. We extract the Head note which reads 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'ble Apex Court 557; [1964] 54 ITR 692 (HL) followed. Speeches made by the members of the legislature on the floor of the House when the Bill is being debated are inadmissible for the purpose of interpreting the statutory provision but the speech made by the mover of the Bill explaining the reason for its introduction can certainly be referred to for the purpose of ascertaining the mischief sought to be remedied by the legislation and the object and purpose for which the legislation is enacted. This is an accord with the recent trend i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... horities would take precedence over the interpretation made by the Supreme Court or High Court in respect of particular provision. The Para 6 of this judgment make this point absolutely clear and reads as under:- 6. Circulars and instructions issued by the Board are no doubt binding in law on the authorities under the respective statutes, but when the Supreme Court or the High Court declares the law on the question arising for consideration, it would not be appropriate for the Court to direct that the circular should be given effect to and not the view 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 existence in law. The above shows that circulars are not binding on the Court but the Court has right to look at the Circular and ultimate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 44A. 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 well settled principle of interpretation i.e. whenever the particular provision is required to be interpreted, it should be interpreted after reading the whole provision and not the parts of a particular section. However, a provision has to be read in context of the overall scheme of the Act. It is also well settled that no provision can be interpreted in such a way which would render parts of the section otiose or meaningless. 28. Having considered the principles of interpretation above, let us consider 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 incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edule or commences any operations specified in that Schedule and undertakes substantial expansion during the period beginning- on the 23rd day of December, 2002 and ending before the 1st day of April, [2007], in the State of Sikkim; or on the 7th day of January, 2003 and ending before the 1st day of April 2012, in the State of Himachal Pradesh or the State of Uttaranchal; or on the 24th day of December, 1997 and ending 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 - 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; in the case of any undertaking or enterprise referred to in sub-clause (ii) of clause (a) or sub-clause (ii) of clause (b), of sub-section (2),one hundred per cent of such profit and gains for five assessment years commencing with the initial assessment year and thereafter twenty-five per cent (or thirty per cent where t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d notified by the Central Government; 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; Initial assessment year means the assessment year relevant to the previous year in which the undertaking or the enterprise begins to manufactures or produce articles or things, or commences operation or completes substantial expansion; Integrated Infrastructure Development Centre means such centres, which the Board, may, by notification in the Official Gazette, specify in accordance with the scheme framed and notified by the Central Government North-Eastern States means the States of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland and Tripura; Software Technology 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; 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 deprec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 'begun'. This is because 'begun' refers to something which has already started in the past whereas 'begins' connotes something which would commence in the present. Therefore, 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 principles of interpretation needs to be looked into. This provision was brought into the statute indisputably in the light of the incentive package announced by the Union Cabinet. Through this incentive package not only income tax concession but excise concessions and some subsidies like transport subsidy and capital subsidy were also provided to various industries in the hilly stated comprising states of Himachal Pradesh, Uttaranchal, Sikkim and North- Eastern states to boost the economies of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so provides that 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 section 80-IB or under section 10C, as the case may be, exceeds ten assessment years. Further, 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 10B, in relation to the profits and gains of the undertaking or enterprise. 49.5 A new Thirteenth Schedule has been inserted in the Income-tax Act to specify the list of articles 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 Himachal Pradesh or in North-Eastern region including Sikkim, with effect from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to same package announced by the Union Cabinet of India for the development of the hilly states. Section 5, reads as under;- Definitions: ..... ..... Existing Industrial Unit' means an industrial unit existing as on 7 t h January 2003. ......... ............. ... 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 section (2) is read alongwith sub-section (3) of section 80IC. As noted earlier, sub section (2) is enabling provision which provides for deduction in certain kind of undertakings, i.e. new unit set up or the existing units which carries out substantial expansion during the particular window period which are given in clauses (i), (ii) (iii) of sub section (2). The sub section (3) provides for rates of deduction. It is useful to note that clause (i) of sub section (3) provides for 100% deduction for a period of 10 assessment years in cases covered by sub clause (i) (iii) of clause (a) and sub clause (i) (iii) of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ears and 25% thereafter. 34. There is a force in the contention of Ld. CIT/DR that if the interpretation contended on behalf of the assessee was to be adopted then Sub Section (4) of Section 80IC would also become redundant. Sub Section (4) clearly provides that the deduction is available to any undertaking or enterprise which is not formed by splitting or reconstruction of the business already in existence or it is not formed by transfer to 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 plant or part so transferred does not exceed twenty per cent of the total value of the machinery or plant used in the business, then, for the purposes of clause (ii) of this sub-section, the condition specified therein shall be deemed to have been complied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 out any number of expansions, deduction was claimed for the 12 t h year for assessment year 2009-10 (We may clarify that reference to these cases is made because of particular contention and we are not expressing any opinion on the merits of these appeals here). Therefore, the contention of the assessee that any number of expansions are allowed is not possible in view of the restriction given in section 80IC(6). 36. The above situation as pointed by the Revenue also becomes clear if the provision of 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 u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d we may note that even the Ld. authors in their Commentary of Income Tax Laws By Chaturvedi Pithisaria's - Sixth Edition has expressed the same opinion. The relevant extract at pages 6351 of the commentary reads as under;- No deduction possible for more than 10 assessment 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 assessment year as defined in clause (v) of sub section (8) of section 80IC uses the expression 'or' therefore, it can be construed that it relates to both situations separately i.e. for new unit and substantial expanded unit. We find no force in this contention. The initial assessment year has been defined and the expression 'or' has been used in respect of new units by stating 'commences ope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld 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. Deputy Commissioner of Commercial Taxes Ors., [1992) Suppl. 1 S.C.C, 21, a Bench of this Court comprising M.N. Venkatachaliah, J. (as the learned Chief Justice then was) and S.C Agrawal, J. stated the relevant principle in the following words: Shri Narasimhamurty again relied on certain observations in CCE v. Parle Exports (P)Ltd. [1989] 1 SCC 345, in support of strict construction of a provision concerning exemptions. There is support of judicial opinion to the view that exemptions 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 violenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... various sub sections of section 80IC are read carefully it leaves no doubt that deduction 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 clause he was entitled to the deduction but assessee is simply asserting before us that there is no restriction for deduction in case of substantial expansion of new units. In our opinion, that is not enough because absence of restriction does not mean that particular deduction was allowable. 42. We also find force in the submissions of Ld. CIT-DR that if interpretation given by the assessee is to be accepted, the provision would become discriminatory for two classes of undertakings i.e. new units and old units. Because the old units would be entitled to 100% deduction on expansion for first five years an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on as per the provisions of section 80IC(2)(a)(ii) if it starts commercial production before 01.04.2012. The Authority held that the assessee was entitled to the benefit of substantial expansion in terms of and to the extent provided by section 80IC of the Act if it starts commercial production in the substantially expanded unit before 01.04.2012. In this case the assesse shall be entitled to deduction of 100% of its profits upto A.Y. 2014-15 since the initial assessment year was A.Y. 2010-11 and 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 on was in the case of Sintex Industries Ltd v CIT (supra). In this case the deduction u/s 80IC was allowed by the Assessing Officer but later on a revisionary order was passed u/s 263 of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oes the undertaking or enterprise manufacture or Produce any article or thing specified in the Fourteenth Schedule. :---Yes ---No (If yes, please specify the article 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 opinion, the Ld. CIT(A) has correctly adjudicated this issue. 49. In view of the above detailed discussion we hold that the assessee before us i.e. M/s Hycron Electronics in ITA No. 798/Chd/2012 is entitled to only 25% of deduction during the present year because the assessee has already availed the period of full deduction @ 100% in the earlier five years i.e. from assessment years 2004-05 to 2008-09. In this background, we find nothing wrong with the order of Ld. CIT(A) and we uphold the same. Accordingly, asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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