TMI Blog2021 (8) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee s claim by following the order of ITAT Delhi Bench in the case of Tirupati LPG Industries Limited [ 2016 (2) TMI 1279 - ITAT DELHI] as held that in case of substantial expansion, the deduction will be allowable @ 100% subject to a maximum of 10 years. Thus, it has been held that the assessee can re-fix the initial Assessment Year in the case of substantial expansion from the year in which the substantial expansion has taken place for the purpose of claiming deduction at full rate subject to over all limit of 10 years. Although, the Department has vehemently opposed the order of the Ld. CIT(A) granting deduction @ 100%, we find no error either in law or facts having been committed by Ld. CIT(A) as the Ld. CIT(A) has only follow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l after claiming deduction of ₹ 4,57,19,546/- u/s 80IC of the Income Tax Act, 1961 (hereinafter called the Act ). The case was selected for scrutiny and during the course of assessment proceedings, it was noticed that this was the 6th year of claiming deduction u/s 80IC of the Act. It was the claim of the assessee that it had undertaken substantial expansion of the industrial unit during the year under consideration and, therefore, it was eligible for deduction @ 100%. The Assessing Officer, however, was of the view that the deduction u/s 80IC of the Act was allowable @ 100% only for the initial five assessment years and not for undertaking substantial expansion. Accordingly, the Assessing Officer proceeded to restrict the assessee s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Ld. SR. Departmental Representative (DR) submitted that the Ld. CIT(A) had erred in allowing the assessee s claim of deduction to the full as against the legally permissible deduction of 25% because the law was very clear on the issue that for persons other than companies, the deduction was allowable only @ 25% after expiry of the initial five years. It was submitted by the Ld. Sr. DR that the assessee does not have an option to re-fix the initial assessment year, and therefore, the claim of deduction @ 100% for the 6th Assessment Year from the initial assessment year was not valid in the eyes of law. 7.0 Having heard the submissions of the Sr. Departmental Representative (DR) and after perusing the impugned order, it is seen that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Ld. CIT(A) granting deduction @ 100%, we find no error either in law or facts having been committed by Ld. CIT(A) as the Ld. CIT(A) has only followed the interpretation as laid down by the Co-ordinate Bench of this Tribunal. Further, the Ld. Sr. DR also could not bring to our notice any order contrary to the order of the Co-ordinate Bench of this Tribunal in the case of Tirupati LPG Industries (supra). It will also be relevant here to reproduce the relevant portion of the order of the Tribunal in ITA No.991/Del/2013 as under: 10.4. The only dispute that arises for our consideration is the interpretation of the term initial assessment year and whether the same comes with any restriction. The Revenue seeks to take the color from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e purpose of this section, the Assessment Year relevant to the P.Y. in which such substantial expansion is completed becomes the initial assessment year. Once it becomes the initial Assessment Year consequently under sub section (3) the assessee would be entitled to 100% deduction of profits and gains for a period of 5 years commencing from such initial Assessment Year, and thereafter the % of deduction from profits come down. The term initial year has been defined, as a year in which substantial expansion is completed. There is nothing to suggest that there cannot be a second initial year if a second substantial expansion is completed. Even if an existing unit which is claiming 80-IC, undertakes first substantial expansion then also the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g deduction u/s 80 IB(iv) of the Act from the A. Y. 1999-2000. For the first 5 years it had claimed exemption of 100%. Thereafter it undertook substantial expansion and claimed deduction u/s 80 IB(iv). The AO rejected the same and observed that benefit could be availed u/s 80 1C and as the substantial expansion was less than 50% of the value of plant ITA N0.2786/Del/2013 10 and machinery the claim is to be rejected. The Tribunal observed that the assessee is entitled to deduction u/s 80-IC. It held that mere mention of a wrong Section would not disentitle the assessee to claim the above said deduction. To our mind this case law is not directly on the point. 11. In view of the above discussion, as on a plain reading of the section and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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