TMI Blog2019 (1) TMI 290X X X X Extracts X X X X X X X X Extracts X X X X ..... e ₹ 5,71,71,244/- u/s.80IC of the Act, irrespective of the fact that the assessee company has not fulfilled the condition laid down in section 80IC(4) of the Act? 2. The appellant craves leave to add, amend or alter any of the above grounds of appeal. 2. The brief facts in this case are that the assessee-company is engaged in the business of manufacturing M.S. Steel press parts required for automobile. It has filed return for assessment year 2012-13 on 28.09.2012 declaring total income of ₹ 6,42,54,360/- after claiming deduction of ₹ 5,78,63,479/- u/s.80IC of the Income Tax Act, 1961 (hereinafter referred to as the Act ). The case was selected for scrutiny under CASS. The assessment u/s.143(3) of the Act was completed at ₹ 12,21,38,844/- by making addition of ₹ 21,000/- on account of interest and addition of ₹ 5,71,71,244/- on account of deduction u/s.80IC of the Act. 3. The grievance of the Revenue is with regard to allowing deduction u/s.80IC of the Act by the Ld. CIT(Appeals). 4. The assessee had made detailed written submissions before the First Appellate Authority and after considering the assessment order, facts of the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndertaking. The Ld. AR of the appellant has relied on number of cases in this regard. However, the AO has dismissed these submissions on one point or other. He has argued that considering the phraseology used in the related section, one must make a distinction between some conditions as the time of formation and others on year to year basis. In Para 4.6 of the assessment order, the AO has dealt w it h the various issues raised by appellant before him. In the first case cited, i .e . Vintage Cards, following was the observation of the Honorable ITAT , Pune : On the contrary, it leads to the conclusion that the fulfillment of conditions in the year of claim of deduction is not linked to the fulfillment of conditions in initial year. The Honorable Pune ITAT refused to test the subsequent years situation for the first year's position of compliance. I have also perused various High Court decisions on the issue. It appears, the judicial views are not uniform and different interpretations are available on the point under dispute. The AR of appellant has also placed before this office a copy of the SLP dismissal in case of Sami Labs Limited on the Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s required to be visited to the appellant every year after its formation. It is held by the jurisdictional Pune ITAT, conditions as to formation are to be tested /visited only in the first year when such a unit is formed. Thereafter, the conditions of formation are not required to be visited. In subsequent years what is required to be tested are the yearly compliance conditions such as, submission of audit report, working of quantum of deduction w.r.t. test of profits derived from the undertaking, and so on. The view of the Honorable Karanataka High Court was that, violation of the first year's condition of 80 :20 ratio can t be improved by the assessee in the next years by adding some further new plant machinery items, etc. In other words, the period/year in which this condition is to be tested is only year 1 and not any subsequent years. This view gains support from two points, first being the specific word used i.e. formed and the second being, the accompaniment of the other condition of reconstruction / splitting-up. All these conditions deny an old unit being formed into a new unit merely for claiming of deduction. Now, if this being the situation, ratio emanating is tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R Pur No Pune (Rs. Cr.) R Pur (Rs. Cr.) Pune (Rs. Cr.) R Pur Rs. Cr.) 2008-09 113.00 11.00 25,188 500 70 37.00 0.09 2.06 0.13 2009-10 106.00 33.00 55,103 500 150 44.00 0.18 1.42 0.40 2010-11 95.00 47.00 71,530 400 275 45.00 0.26 1.68 0.91 2011-12 142.00 61.00 88,461 600 325 50.00 0.27 2.00 1.03 2012-13 166.00 108.00 98,580 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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