TaxTMI 
TaxTMI 
TaxTMI 
2018 (11) TMI 443
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....e, the Tribunal has erred in holding that benefit of deduction under Section 80IC @ 100% of profit was not available to units set up after 07.01.2003, on undertaking substantial expansion from the year of completion of substantial expansion? iii) Whether under the facts and circumstances of the case, the order is unsubstantial, for upholding the disallowance of the claim for substantial expansion under Section 80IC to the units that came into existence after 07.01.2003 by stating that initial assessment year cannot be re-fixed for such units? iv) Whether under the facts and circumstances of the case, in case of difference of opinion amongst the decisions of co-ordinate benches, the matte is to be referred to the larger bench?" 2. A few facts relevant for the decision of the controversy involved as narrated in the appeal may be noticed. The appellant-assessee is a proprietor of Windstor Industries which is primarily engaged in the business of manufacturing and trading in EPS Thermocole Moulded Packaging, Disposable Glass and BOPP Tapes at Baddi (Himachal Pradesh). Deduction of Rs. 2,10,46,729/- under Section 80IC of the Act was claimed. As per Form 10-CCB, the date of commen....
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....ect 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 units situated in the States of Sikkim, Himachal Pradesh and Uttaranchal and North-Eastern States. The deduction was provided to new units established in the aforesaid States, and also to existing units in those States if substantial expansion was carried out. The deduction was available @ 100% for ten Assessment Years for the units located in North-Eastern and in the State of Sikkim, and for the units located in Himachal Pradesh, the deduction was available @ 100% for five years and @ 25% for next five years. 6. The Tribunal in view of the opinion expressed by it in its decision in the case of M/s. Hycron Electronics, Baddi, Solan in ITA No. 798/Chd/2012 dated 27.05.2015 for the assessment year 2009-10 adjudicated the issue against the assessee. Learned counsel for the assessee had placed strong reliance on the decision of the ....
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.... 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 substantial expansion during the period mentioned in sub section (2) thereof. The answer was given in the negative. The matter is no longer res integra. It was held by the Apex Court as under:- "17. In this backdrop, the question is as to whether these assessees, who had availed deductions @ 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 deductions @ 100% again for next five years as they had undertaken "substantial expansion" during the period mentioned in sub-section (2) thereof? The answer has to be in the negative for the following reasons: 18. We are dealing with the deductions in respect of profits and gains under Section 80-IC of the Act. No other provision is involved. This section makes special provisions in respect of certain undertakings or enterprises in certain speci....
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....xt 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 (3) read with sub-section (6) of Section 80-IC. A pragmatic and reasonable interpretation of Section 80-IC would be to hold that once the initial Assessment Year commences and an assessee, by virtue of fulfilling the conditions laid down in sub-section (2) of Section 80-IC, starts enjoying deduction, there cannot be another "Initial Assessment Year" for the purposes of Section 80-IC within the aforesaid period of 10 years, on the basis that it had carried substantial expansion in its unit." 9. While the Apex Court adjudicated the issue in favour of the revenue, it specifically distinguished its earlier pronouncement in Mahabir Industries vs. Principal Commissioner of Income Tax (Civil Appeal Nos.4765-4766 of 2018 decided on May 18, 2018 in the following terms:- "21. We are conscious of our recent judgment rendered by this very Bench in Mahabir Industries vs. Principal Commissioner of Income Tax (Civil Appeal Nos. 4765-4766 of 2018 d....