TMI Blog2018 (10) TMI 1001X X X X Extracts X X X X X X X X Extracts X X X X ..... e and Mr. Rohit Kaura, Advocate, Mr. Vishal Gupta, Advocate, Mr. Munish Kapila, Advocate and Mr. Aman Parti, Advocate For The Respondent-Revenue : Mr. Yogesh Putney, Sr. Standing Counsel And Ms. Urvashi Dhugga, Sr. Standing ORDER Ajay Kumar Mittal, J. 1. This order shall dispose of ITA Nos. 332, 443 of 2015, 112, 214, 420 of 2016, 158, 189, 253, 302, 303, 304, 330, 342, 343, 344, 351 of 2017, 113, 135 and 137 of 2018 as according to the learned counsel for the parties, the issue involved in all these appeals is identical. However, the facts are being extracted from ITA No.332 of 2015. 2. ITA No.332 of 2015 has been filed by the appellant-assessee under Section 260A of the Income Tax Act, 1961 (in short, the Act ) against the order dated 27.5.2015, Annexure A.3 passed by the Income Tax Appellate Tribunal, Chandigarh Bench (in short, the Tribunal ) in ITA No.1007/Chd/2014, for the assessment year 2011-12, claiming following substantial questions of law:- i) Whether on the facts and in the circumstances of the case, the Tribunal erred in law in holding that benefit of deduction under section 80IC @ 100% of profit was not available to units set up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as undertaken in the financial year 2010-11 within the time period prescribed under Section 80IC(2)(b) of the Act. The Assessing Officer disallowed the claim under Section 80IC of the Act vide order dated 29.01.2014, Annexure A.1, holding that the claim for 100% deduction was not permissible under Section 80IC of the Act and the same was to be restricted only to the extent of 25%. Aggrieved by the order, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)]. Vide order dated 22.09.2014, Annexure A.2, the CIT(A) held that the deduction at 100% of profits is available for only five assessment years including the initial assessment year and, thereafter, the assessee was eligible for deduction to the extent of 25% as the definition of initial assessment year provided under section 80IC(8)(v) of the Act would be restricted to only one initial assessment year. Relying upon the notification of the Central Excise Department, the CIT(A) held that the assessee was eligible for deduction under Section 80IC of the Act only to the extent of 25% for the assessment year in question. Still not satisfied, the assessee filed an appeal before the Tribunal. Vide order d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce with the scheme framed and notified by the Central Government in this regard, in the State of Himachal Pradesh or the State of Uttaranchal; or ( iii) on the 24th day of December, 1997 and ending 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 Techno-logy 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 manufactures or produces any article or thing, specified in the Fourteenth Schedule or commences any operation specified in that Schedule and undertakes substantial expansion during the period beginning- ( i ) on the 23rd day of December, 2002 and ending before the 1st day of April, 2012, in the State of Sikkim; or ( ii ) on the 7th day of January, 2003 and ending before the 1st day of April, 2012, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... second proviso to sub-section (4) of section 80-IB or under section 10C, as the case may be, exceeds ten assessment years. ( 7) The provisions contained in sub-section (5) and subsections (7) to (12) of section 80-IA shall, so far as may be, apply to the eligible undertaking or enterprise under this section. ( 8) For the purposes of this section,- ( i ) Industrial Area means such areas, which the Board, may, by notification in the Official Gazette, specify in accordance with the scheme framed and notified by the Central Government; ( ii ) Industrial Estate means such estates, which the Board, may, by notification in the Official Gazette, specify in accordance with the scheme framed and notified by the Central Government; ( iii ) Industrial Growth 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; ( 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 assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8/Chd/2012 dated 27.05.2015 for the assessment year 2009-10 adjudicated the issue against the assessee. Learned counsel for the assessee had placed strong reliance on the decision of the Himachal Pradesh High Court in Stovkraft India vs. Commissioner of Income Tax , alongwith other appeals reported as (2018) 400 ITR 225, to contend that in the batch of appeals including the case of Hycron Electronics (supra), the order of the Tribunal was set aside and the issue was decided in favour of the assessee. 7. The issue before the Himachal Pradesh High Court in Stovkraft India s case (supra) was as to whether undertaking or an enterprise established after 7th January 2003 carrying out substantial expansion within the window period between 07.01.2003 to 01.04.2012 would be entitled to deduction on profits at the rate of 100% under Section 80IC of the Act and if so then for what period. The answer was given in the affirmative. It was held as under: ( a) Such of those undertakings or enterprises which were established, became operational and functional prior to 07.01.2003 and have undertaken substantial expansion between 07.01.2003 upto 01.04.2012, should be entitled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s: 18. We are dealing with the deductions in respect of profits and gains under Section 80-IC of the Act. No other provision is involved. This section makes special provisions in respect of certain undertakings or enterprises in certain special category States. Section 80-IC was inserted by the Finance Act, 2003 w.e.f. April 1, 2004. As per this provision, certain undertakings or enterprises in certain special category States are allowed deduction from such profits and gains, as specified in subsection (3) of Section 80-IC. The provisions of Section 80-IC provided deduction to manufacturing units situated in the State of Sikkim, Himachal Pradesh and Uttaranchal and North-Eastern States. The deduction was provided to new units established in the aforesaid States, and also to existing units in those States if substantial expansion was carried out. The deduction was available @ 100% for ten Assessment Years for the units located in North-Eastern and in the State of Sikkim and for the units located in Himachal Pradesh, the deduction was available @ 100% for five years and @ 25% for next five years. 19. In the instant case, we are concerned with the assessees who had establi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Income Tax (Civil Appeal Nos.4765-4766 of 2018 decided on May 18, 2018 in the following terms:- 21. We are conscious of our recent judgment rendered by this very Bench in Mahabir Industries vs. Principal Commissioner of Income Tax (Civil Appeal Nos. 4765-4766 of 2018 decided on May 18, 2018). However, a fine distinction needs to be noted between the two sets of cases. In Mahabir Industries, the assessees had availed the initial deduction under a different provision, namely, Section 80-IA of the Act, i.e. by fulfilling the conditions mentioned in subsection (4) of Section 80-IA. Those conditions are altogether different. Deduction in respect of profits and gains under the said provision is admissible when these profits and gains are from industrial undertakings or enterprises engaged in infrastructure development etc. Even this availment started at a time when Section 80-IC was not even on the statute book. As mentioned above, Section 80-IC was inserted by the Finance Act, 2003 with effect from April 01, 2004. The assessees in those cases had started claiming and were allowed deductions from the Assessment Years 1998-99 and 1999-2000 under Section 80-IA and from ..... X X X X Extracts X X X X X X X X Extracts X X X X
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