Tribunal grants full deduction under section 80IC, allowing 100% deduction for eligible profits.

The tribunal dismissed the legal grounds related to the validity of reopening the assessment as the assessee's counsel did not press them. Concerning the restriction of deduction under section 80IC of the Income Tax Act to 30%, the tribunal ruled in favor of the assessee. Citing a Supreme Court judgment, the tribunal allowed the assessee to claim 100% deduction for eligible profits due to substantial expansion, overturning the lower authorities' decision and granting the full deduction as claimed.

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Issues:
1. Validity of reopening of assessment u/s 147 read with section 148 of the Income Tax Act, 1961.
2. Restriction of deduction u/s 80IC of the Act to 30% instead of 100% claimed by the assessee.

Issue 1: Validity of Reopening of Assessment:
The assessee appealed against the consolidated order of the Commissioner of Income Tax (Appeals) regarding the validity of reopening the assessment u/s 147 read with section 148 of the Income Tax Act, 1961. The legal grounds related to this issue were not pressed by the assessee's counsel, leading to their dismissal by the tribunal. Thus, the issue of the validity of reopening the assessment was not further considered by the tribunal.

Issue 2: Restriction of Deduction u/s 80IC of the Act:
The assessee challenged the lower authorities' decision to restrict the deduction u/s 80IC of the Act to 30% instead of the 100% claimed by the assessee due to substantial expansion. The assessee had initially claimed 100% deduction for eligible profits for five years but later claimed the same rate for subsequent years citing substantial expansion. The Assessing Officer (A.O.) limited the deduction to 30% based on a previous ITAT Chandigarh Bench decision.

The assessee appealed to the CIT(A), who upheld the decision of the A.O. However, during the tribunal hearing, the assessee's counsel referred to a Supreme Court judgment in favor of the assessee in a similar case. The tribunal noted that the Supreme Court's decision clarified that an undertaking could claim 100% deduction for profits even after the initial five years if substantial expansion was undertaken.

The tribunal, following the Supreme Court's ruling, concluded that the assessee, having undertaken substantial expansion, was entitled to claim 100% deduction of eligible profits, even after claiming the same rate for the initial five years. Therefore, the tribunal set aside the CIT(A)'s order and allowed the appeals of the assessee, granting them the full deduction as claimed.

In conclusion, the tribunal dismissed the legal grounds related to the validity of reopening the assessment due to the assessee's counsel not pressing them. Regarding the restriction of deduction u/s 80IC of the Act to 30%, the tribunal ruled in favor of the assessee based on the Supreme Court's judgment, allowing them to claim 100% deduction for eligible profits due to substantial expansion.

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