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TMI Blog2019 (3) TMI 988X X X X Extracts X X X X X X X X Extracts X X X X ..... .2015 where in the case of M/s. Tirupati LPG Industries v/s DCIT had been already considered." 3. Ld. CIT DR has sought time on the ground that paper book is required to be filed by the Revenue. Shri Gautam Jain, Advocate appearing on behalf of the assessee submitted that the issue is fully covered in favour of the assesee by decisions of the Apex court and the orders of the ITAT consistently, accordingly the departmental request for time was objected to. A pass over was given so that the Ld. CIT(A) DR may familiarize herself with the facts and consider the feasibility of the assessee's objects to the grant of time. In the second round when the appeal came up for hearing the Ld. AR sought permission to elaborate the facts subject to the leave of the CIT(DR). The Ld. CIT DR posed no objection. 4. The Ld. AR Referring to the issue raised to ground No. 1 by the Revenue invited attention to the discussion in the assessment order made by the AO in para 5. Inviting attention to unnumbered page 3 of the assessment order he submitted that the assessing officer observed that the expenses are debited mainly to the taxable units and same is not in commensuration with the turnover of the uni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no infirmity on fact or position of law was cited. The request for time consequently was withdrawn and for the two departmental grounds she relied upon the assessment order. However, no contrary fact or argument was brought to the notice of the Bench. 7. We have heard the rival submissions and perused the material available on records. We find qua the first issue wherein the assessee has placed reliance on the following orders of the ITAT the issue stands covered in assessee's favour: Sr. No. Assessment year Disallowance made on account of allocation of expenses Remarks i) 2005-06 8,00,000 CIT(A) deleted the disallowance and upheld by the decision of Hon'ble Tribunal in ITA No. 554/Del/2009 (pages 67-69 of JPB) ii) 2008-09 9,52,155 CIT(A) deleted the disallowance" and upheld by the decision of Hon'ble Tribunal in ITA No. 4569/Del12011 at pages 2-4 of JPB following decision of Hon'ble Tribunal for Assessment year 2005-06 iii) 2009-10 26,88,182 CIT(A) deleted the disallowance and upheld by the decision of Hon'ble Tribunal in ITA No. 2134/Del/2012 at pages 9-11 of JPB following decision of Hon'ble Tribunal for Assessment year 2005-06 iv) 2010-11 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also covered under section 80IC of the I.T. Act. It was also submitted that these incomes are generated out of manufacturing activity. The short and excess is the difference in billing and payments made and as such the income derived is from industrial undertaking. The Ld. CIT(A) considering the profit element also noted that there has been no investigation or specific exercise to show that the amount claimed as deduction under section 80IC of the Act was wrong. The Ld. CIT(A) following the order of his predecessor for A.Y. 2009-2010, allowed the appeal of the assessee and deleted the 4 ITA.No.1194/Del./2015 M/s. Micro Turners Rohtak. addition of Rs. 7.44 crores. The appeal of assessee has been allowed. 4. The Learned Counsel for the Assessee submitted that in A.Y. 2010-2011, the Department on the same ground filed the appeal before the Tribunal in ITA.No.2369/Del./2014 which have been dismissed by the Tribunal vide order dated 9th August, 2016. The findings of the Tribunal in paras 7.1 to 9 are reproduced as under : "7.1 After going through the findings of the Ld. CIT(A), as aforesaid, we are of the view that the AO has reduced the deduction admissible u/s. 80 IC of the IT Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITA.No.1194/Del./2015 M/s. Micro Turners Rohtak. "The Ld. Commissioner of Income Tax (A), it is seen, Ld. CIT(A) has followed the principle of consistency in deleting the addition made by the AO. No changes in facts from the earlier years have been brought on record. Moreover, the ld. CIT(A) has followed the decision of Delhi Tribunal, Third Member, Delhi in the case of DCIT vs. Delhi Press Samachar Patra 103 TTJ (Del) 45 wherein it was held that apportionment of expenses between different units without any investigation and collection any material is arbitrary." 7.2 We further note that ITAT, Delhi 'F' Bench in assessee's own case for the assessment year 2005-06 in ITA No. 554/Del/2009 vide order dated 17.9.2009 has upheld the order of the Ld. CIT(A) by citing the exactly the same case law of the ITAT i.e. DCIT vs. Delhi Press Samachar Patra 103 TTJ (Del) 45 (Supra). 8. In the background of the aforesaid discussions and respectfully following the precedents of the Coordinate Bench in assessee's own case relevant for the assessment year 2005-06 and 2009-10, we are of the considered view that the Ld. CIT(A) has passed a well reasoned order which does not need any interference on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndustrial undertakings or enterprises engaged in infrastructure development etc. Even this availment started at a time when Section BO-IC was not even on the statute book. As mentioned above, Section BO-IC was inserted by the Finance Act,] 2003 with effect from April 01, 2004. The assessees in those cases :lad started claiming and were allowed deductions from the Assessment Years 199B-99 and 1999-2000 under Section BO-IA and from the Assessment Year 2000-01 to Assessment Year 2005-06 under Section 80-1B of the Act. The deduction was, thus, claimed by the assessees in those appeals under the new provision i.e. Section 80-IC on fulfilling conditions contained in sub-section- (2) of Section 80-IC for the first time for the Assessment Year 2006-07. Thus, insofar as those cases are concerned, the initial Assessment Year under Section BO-IC started only from the Assessment Year 2006-07. In contrast, position here is altogether different. These assessees have availed deduction under Section 80-IC alone. Initially, they claimed the deduction on the ground that they had set up their units in the State of Himachal Pradesh and after availing the deduction @ 100% they want continuation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g deduction u/s 80lB @100%with initial year as AY 2003-04 and thereafter he carried out substantial expansion and started claiming deduction u/s 80lC @100%. On 18.03.2015, the assessee filed reply wherein he stated that the assessee is entitled to deduction @100% on substantial expansion and produced copy of the section 80lC with letter from CIT Shimla with clarification." 10.1 On a perusal of the same it is seen that the assesee as per its claim on record claimed deduction u/s 80IB with initial year as 2003-04. The year under consideration is 2012-13 and it is claimed that substantial expansion has been carried out in terms of section 80IC. It is seen that again as to when the substantial expansion was carried out there is not discussion in the order . "To sum up, it is noted that the assessee had substantially expanded its new business already claiming deduction u/s 80IB since AY 2003- 04 and refixed its initial AY for claiming deduction at higher rate which is not permissible as per law and the legislative intent. Thus, the deduction claimed by the assessee is restricted to 25% (Rs. 12,95,35,776 -@25% = Rs. 3,23,83,944/-) and accordingly addition of Rs. 9,71,51,832/- (=12,95, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of deductions specified in Section 80-IA, Section 80-IB and Section 80-IC is, thus, different. Section 8t-C stipulates the period for which hundred per cent deduction is to be given and then deduction at reduced rates is to be given f the assessee had earlier availed deduction under Section 80-IA and Section 80-IS, that would be of no concern inasmuch s on carrying out substantial expansion, which was carried out and completed in the Assessment Year 2006- 07, the assessee became entitled to deduction under Section 80-IC from the initial year. The term' initial year is referable to the year in which substantial expansion has been completed, which legal position is stated by the High Court itself and even accepted by the Department as it has not challenged that part of the judgment. The inclusion of period for the deduction is availed under Section 80-IA and Section 80-IB, for the purpose of counting ten years, is provided in sub-section(6) of Section 80-IC and it is limited to those industrial undertakings or enterprises which are set-up in the North-Eastern Region. By making specific provision of this kind, the Legislature has shown its intent, namely, where the industry is n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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