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08-01-2019, Globe Precision Industries, Section 250(6), Tribunal Chandigarh

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6 days 23 hours ago #8299 by amit
Section - 250(6), 80IB, 80HHC, 80AB, 80AB
Order Date - 08-01-2019
Favouring - Assessee Partly
Court - Tribunal Chandigarh
Appellant - Globe Precision Industries P.Ltd.
Respondent - ITO
Justice - SANJAY GARG JM & ANNAPURNA GUPTA AM
Citation - 119Taxpundit96
Appeal No. - ITA No. 871/CHD/2017
Asstt. Year - 2011-12

Order

PER : ANNAPURNA GUPTA

The above are appeals filed by the different assessees against separate orders passed by the Commissioner of Income Tax (Appeals) Shimla [in short referred to as CIT(A)] u/s 250 sub-section (6) of the Income Tax Act, 1961 ( hereinafter referred to as 'Act') dated 24.03.2017, 16.02.2017 and 25.05.2017 respectively.

2. It was common ground that the issues involved in all the three appeals are identical, therefore, they were all taken up together for hearing.

3. For the sake of convenience, we shall be dealing with the appeal of the assessee in ITA 871/CHD/2017 and the decision rendered therein will apply mutatis-mutandis to the other appeals also. The assessee has raised the following grounds of appeal :

1. That the order passed under section 250(6) of the Income Tax Act, 1961 by the learned Commissioner of Income Tax (Appeals) Shimla in Appeal No. IT- /447/2013-14/SML, dated 24.03.2017 is contrary to law and facts of the case.

2. That in the facts and circumstances of the case, the Id. Commissioner of Income Tax (Appeals), gravelly erred in upholding the action of the Id. Assessing Officer in holding that the appellant is not entitled to 100% deduction under section 80IB in respect of Baddi unit on account of substantial expansion made by appellant during the 7th year for which deduction is allowable as per Section 80IC of the Income Tax Act, 1961.

3. That in the facts and circumstances of the case, the Id. Commissioner of Income Tax (Appeals) gravelly erred in upholding the action of the Id. Assessing Officer in restricting the deduction under Section 80IC of the Income Tax Act, 1961 at 30% as against 100% in respect of Badd unit claimed by the appellant as the substantial expansion was done by the appellant which fact has not been controverted by the Id. Assessing Officer.

4. That in the facts and circumstances of the case, the Id. Commissioner of Income Tax (Appeals), gravelly e red in upholding that for quantification of deduction under Section 80IC, the loss of one priority unit is to be set off against the profit of other priority unit. Whereas as per the provisions of Income Tax Act for quantification of deduction each eligible unit is to be considered separately for deduction under section 80IC of the Income Tax Act, 1961.

5. 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, Chandigarh.

4. Ground No. 1 & 5 are general in nature and need no adjudication.

5. Ground No. 2 & 3 raised by the assessee relate to the issue of restriction of deduction claimed u/s 80IC of the Act to30% of the eligible profits as against 100% claimed by the assessee on account of substantial expansion carried out by it. The brief facts relating to the issue are that the assessee firm is engaged in the manufacturing of axels, gears and shafts having units at Baddi and Rudrapur. In the Baddi unit, the assessee had declared business profit of Rs. 1,39,26,245/- and had claimed 100% deduction of the same. The AO noted that the assessee company had started its business activities w.e.f. 17.09.1986 and the Baddi Unit had completed substantial expansion for the first time during the assessment year 2005-06 and claimed deduction u/s 80IC of the Act from assessment year 2005-06 by showing it to be the initial assessment year. The claim of deduction u/s 80IC was allowed by the AO for assessment year 2005-06. Thereafter, deduction u/s 80IC was allowed to the assessee u/s 143(3) upto assessment year 2009-10 for a period of five years. In the impugned assessment year, which was the seventh year of production since the first time the assessee carried out substantial expansion, the assessee again claimed deduction @ 100% of its profits since it had completed second substantial expansion in assessment year 2010-11. The AO denied the same holding that asper Section 80IC,
the assessee was eligible for deduction of profits @ 100% only for the first five years and thereafter @ 30% of the profits.

6. The mat er was carried in appeal before the CIT(A) who upheld the order of the AO following the order of the ITAT Chandigarh Bench in the case of Hycron Electronics Vs ITO in ITA 798/CHD/2012 and other related cases.

7. Before us, ld. counsel for the assessee fairly conceded that the issue was now settled and covered against the assessee by the decision of the Hon'ble Apex Court in the case of CIT Vs M/s Classic Binding Industries & Ors. in Civil Appeal No. 7208 and others of 2018 dated 20.08.2018.

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