TMI Blog2021 (6) TMI 882X X X X Extracts X X X X X X X X Extracts X X X X ..... in which the substantial expansion is undertaken would become initial assessment year and from that assessment year, the assessee shall be entitled to 100% deduction of profits and gains. It was also laid down by the Hon ble Apex Court that deduction would be for a total period of 10 years. - ITA No.1292/Del/2016 - - - Dated:- 31-5-2021 - Shri Sudhanshu Srivastava, Judicial Member And Shri Prashant Maharishi, Accountant Member For the Appellant : Sh. N.C. Uppadhay, Sr. DR For the Respondent : Written submission ORDER PER SUDHANSHU SRIVASTAVA, JM: This appeal is preferred by the Department against order dated 01.12.2015 passed by the Learned Commissioner of Income Tax (Appeals)-Dehradun {CIT(A)} for Assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 100% deduction u/s 80IC on the basis of substantial expansion made by the assessee in the F.Y.2011-12 while as per Form 10CCB submitted by the assessee, the initial assessment year for deduction u/s 80IC was A.Y.2006-07. 2. The Ld. CIT (A) has erred in law and on facts in allowing 100% deduction u/s 80IC for the seventh year treating the Assessment Year 2012-13 as initial assessment year on the basis of substantial expansion made by the assessee. As per Form 10CCB, the A.Y.2012-13 is the seventh year of claim of deduction u/s 80IC and being a non company only 25% of deduction is allowable to the assessee. 3. Since for the claim of deduction u/s 80IC the law provides for only one initial assessment year, therefore, there is no s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent Years. During the captioned Assessment Year i.e. 7th Assessment Year, the assessee under took substantial expansion of the new unit and again claimed deduction @ 100%. It is the beyond dispute that the claim @ 100% was not questioned by the Department for non fulfillment of statutory conditions and the only question before us is whether the initial Assessment Year can be re-fixed in case of substantial expansion. A perusal of the impugned order shows that the Ld. CIT(A) has allowed the assessee s claim by following the order of ITAT Delhi Bench in the case of Tirupati LPG Industries Limited vs. DCIT Range-2, Dehradun in ITA No.991/Del/2013 vide order dated 29.01.2014. In this case, the Co-ordinate Bench of ITAT had held that in case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A plain reading of Sec.80-IC(8)(v) which defines the term initial assessment year read with Sec.80-IC(8)(ix) which defines the term substantial expansion makes it clear that there is no restriction or bar on more than one substantial expansion being undertaken by an assessee. In our view, a unit can undertake any number of substantial expansions, in the absence of any specific restriction in the Section. There is no suggestion in the language of the section that incentive u/s 80 1C is not available if the assessee substantially expands for a second or third time. Substantial expansion requires additional investment and results in higher production, ITA N0.2786/Del/2013 8 employment etc. Industrialists have to be encouraged to undertake ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... round that it would amount to evergreening of an incentive provision. Sub section (6) of S.80-IC reads as follows. ITA N0.2786/Del/2013 9 6) Notwithstanding anything contained in this Act, 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 the second proviso to subsection (4) of section 80-IB or under section 10C, as the case may be, exceeds ten assessment years. This section imposes a restriction for a total period of 10 years for claiming the deduction in question, irrespective of the fact whether the deduction is claimed u/s 80-IC or u/s 80-IB or u/s 10 C as the case may be. Thus there is no evergreening ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ), Gwaliar Rayan Silks Mfg. Co. Ltd. (supra) have to be followed and benefit given to the assessee. We also make it clear that the deduction cannot be extended beyond the period of 10 years from the A.Y.2004-05. 7.1 Further, the issue now stands squarely covered by the judgment of the Hon ble Apex Court in the case of Pr. Commissioner of Income Tax vs. Aarham Softronics in Civil Appeal No.1784 of 2009 and related cases wherein the Hon ble Apex Court has laid down that in case substantial expansion is carried out as defined in clause (ix) of Sub-section-8 of Section 80IC by such an undertaking or enterprise, within the aforesaid period of 10 years, the said previous year in which the substantial expansion is undertaken would beco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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