TaxTMI 
TaxTMI 
2018 (10) TMI 1129
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....n in the case of Hycron Electronics Vs. Income Tax Officer, Ward-2, Baddi [2015] 41 ITR (T) 486 (Chandigarh-Trib.) instead of referring the matter to a larger bench in view of the contrary view taken in an earlier decision in the case of Tirupati LPG Industries Limited, Vs. DCIT (2014) 45 taxman.com 326 ? iii) Whether in the facts and in the circumstances of the case, the Hon'ble Tribunal was not wrong in holding that once an exemption under Section 80IC of the Act is given to an undertaking, the undertaking cannot have another initial year even if substantial expansion is undertaken? iv) Whether in the facts and circumstances of the case the Hon'ble Tribunal was not wrong in holding that Section 80IC of the Act recognizes only one initial assessment year when Section 80IC(8)(v) of the Act provides for the initial assessment year with reference to setting up a new undertaking as well as substantially expanding the existing undertaking?" 2. A few facts relevant for the decision of the controversy involved as narrated in the appeal may be noticed. The appellant-assessee is engaged in the business of manufacturing of soap, soap noodles, toilet soap etc. On 27.04.2....
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....ding of Section 80IC(8)(v) and 80IC(8)(ix) makes it clear that there is no restriction on more than one initial assessment year. 5. On the other hand learned counsel for the respondent-revenue supported the impugned order passed by the Tribunal and relied upon the pronouncement of the Apex Court in M/s Classic Binding Industries case's (supra). 6. The matter is no longer res integra. The issue has already been decided against the assessee in a judgment passed on 06.09.2018 in ITA No. 332 of 2015 (M/s Admac Formulations, H.No. 272, Sector-17, Panchkula Vs. Commissioner of Income Tax, Panchkula) wherein after considering the relevant statutory provision and the case law on the point, it has been recorded as under:- "Section 80-IC was inserted by Finance Act, 2003 w.e.f. April 1, 2004. It makes special provisions in respect of certain undertakings or enterprises in certain special category States. According to this provision, certain undertakings or enterprises in certain special category States are allowed deduction from such profits and gains, as specified in subsection (3) of Section 80-IC of the Act. The provisions of this Section provided deduction to manufacturing....
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.... multiple substantial expansions. (d) Correspondingly, there can be more than one initial Assessment Years. (e) Within the window period of 07.01.2003 to 01.04.2012, an undertaking or an enterprise can be entitled to deduction @ 100% for a period of more than five years. (f) All this, of course, is subject to a cap of ten years. [Section 80-IC(6)] (g) Units claiming deduction under Section 80-IC shall not be entitled to deduction under any other Section, contained in Chapter VI-A or Section 10A or 10B of the Act [Section 80-IB(5)]." 8. The view of the Himachal Pradesh High Court in Stovkraft India's case (supra) and other appeals was not approved by the Supreme Court. The Apex Court in Commissioner of Income Tax vs. M/s Classic Binding Industries, Civil Appeal No(s) 7208 of 2018 decided on 20.8.2018, dealing with the issue whether the assessee who had availed deductions at the rate of 100% for first five years on the ground that they had set up a manufacturing unit as prescribed under sub section (2) of Section 80IC of the Act can start claiming deduction at the rate of 100% again for the next five years as they had undertaken substantia....
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.... five Assessment Years commencing with the initial Assessment Year and thereafter the deduction is allowable at 25% (or 30% where the assessee is a company) of the profits and gains. Cumulative reading of these provisions brings out the following aspects: (a) Those undertakings or enterprises fulfilling the conditions mentioned in sub-section (2) of Section 80-IC become entitled to deduction under this provision. (b) This deduction is allowable from the initial Assessment Year. "Initial Assessment Year" is defined in Section 80- IB(14)(c) of the Act. (c) The deduction is @ 100% of such profits and gains for first 5 Assessment Years and thereafter a deduction is permissible @ 25% (or 30% where the assessee is a company). (d) Total period of deduction is 10 years, which means 100% deduction for first 5 years from the initial Assessment Year and 25% (or 30% where the assessee is a company) for the next 5 years. 20. When we keep in mind the aforesaid scheme and spirit behind this provision, such a situation cannot be countenanced where an period of 10 years. If that is allowed it will amount to doing violence to the provisions of subsection ....