TMI Blog2020 (5) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... 100% claimed by the assessee on account of substantial expansion of the Unit - HELD THAT:- Hon'ble Apex Court in the case of M/s Aarham Softronics [ 2019 (2) TMI 1285 - SUPREME COURT] and find that the Hon'ble Apex Court dealt with the entire scheme of the Act relating to the relevant section i.e. section 80IC of the Act, and arrived at the conclusion that the definition of the initial assessment year contained in clause (v) of sub-section(8) of section 80IC of the Act can lead to a situation where there can be more than one initial assessment year within the said period of ten years Since in the present case the fact that the assessee had undertaken substantial expansion is not disputed, the assessee, we hold, is entitled to c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y e-filed and submitted during the course of assessment proceedings. 3. That in the facts and circumstances of the case and in law, the Id. Commissioner of Income Tax (Appeals) gravelly erred in denying appellant benefit of deduction under Section 801C @ 100% as per the judgment of Honourable Supreme Court in the case of M/s Aarham Softronics. 4. That the appellant craves to add, amend or alter any ground of appeal before or at the time of hearing of appeal, with the permission of the Hon'ble Income Tax Appellate Tribunal. 3. Ground No.1: Ground No.1 is general in nature, hence, need no specific adjudication. 4. Ground No.2 : The brief facts relating to the issue are that assessee firm derives income from manufacturing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uring the assessment proceedings . In view of this, the issue is covered in favour of the assessee by the aforesaid decision of the Hon'ble jurisdictional High Court in CIT vs Punjab Financial Corporation (supra). Considering the facts of the case, the issue is decided in favour of the assessee accordingly. 8. Ground No. 3 : Vide this ground, the assessee has agitated the action of the Ld. CIT(A) in restricting the deduction u/s 80IC of the Income Tax Act, 1961 (in short 'the Act') to 25% as against 100% claimed by the assessee on account of substantial expansion of the Unit. 9. During the course of hearing before us, the Ld. Counsel for the assessee, at the outset itself, pointed out that the Hon'ble Apex Court h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This provision was, thus, aimed at encouraging the undertakings or enterprises to establish and set up such units in the aforesaid States to make them industrially advanced States as well. Undoubtedly, these are difficult States as most of these States fall in hilly areas. Therefore, cost of production and transportation may also go up. 20. When we keep in mind these objectives for which Section 80-IC was enacted, an irresistible conclusion would be to grant 100% deduction of the profits and gains even from the year when there is substantial expansion in the existing unit. After all, this substantial expansion involves great deal of investment which has to be, at least 50% in the plant and machinery, of the book value thereof before ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to take note of the definition initial assessment year contained in Section 80-IC itself and instead based its conclusion on the definition contained in Section 80-IB, which does not apply in these cases. The definitions of initial assessment year in the two sections, viz. Sections 80-IB and 80- IC are materially different. The definition of initial assessment year under Section 80-IC has made all the difference. Therefore, we are of the opinion that the aforesaid judgment does not lay down the correct law. (b) An undertaking or an enterprise which had set up a new unit between 7th January, 2003 and 1st April, 2012 in State of Himachal Pradesh of the nature mentioned in clause (ii) of subsection (2) of Section 80-IC, would be en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dismiss all these appeals of the Revenue. Likewise, appeals filed by the assessees are hereby allowed. 13. In view of the above, it is now settled law that even a new undertaking, which has claimed deduction of its eligible profits @ 100% thereof for the first five years, is entitled to claim deduction @ 100% of its profits thereafter on account of substantial expansion undertaken by it. However, such deduction would be for a total period of 10 years as provided in sub-section (6) to section 80IC of the Act. 14. Since in the present case the fact that the assessee had undertaken substantial expansion is not disputed, the assessee, we hold, is entitled to claim deduction @ 100% of its eligible profits for five years from the initial ..... X X X X Extracts X X X X X X X X Extracts X X X X
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