TaxTMI 
TaxTMI 
2020 (5) TMI 51
X X X X Extracts X X X X
X X X X Extracts X X X X
....er of Income Tax (Appeals), Shimla in Appeal No. IT/374/18-19/Sml dated 28.03.2019 is contrary to law and facts of the case. 2. That in the facts and circumstances of the case and in law, the Commissioner of Income Tax (Appeals) gravelly erred in upholding the action of the Id. Assessing Officer who had denied the claim of deduction of Rs. 1,32,45,463/- under Section 801C for non-filing of Form No. 10CCB. Although, the Form No. 10CCB was duly e-filed and submitted during the course of assessment proceedings. 3. That in the facts and circumstances of the case and in law, the Id. Commissioner of Income Tax (Appeals) gravelly erred in denying appellant benefit of deduction under Section 801C @ 100% as per the judgment of Honourable Supreme....
X X X X Extracts X X X X
X X X X Extracts X X X X
....spect has relied upon the decision of the Hon'ble jurisdiction High Court in the case of 'CIT vs Punjab Financial Corporation' [2002] 254 ITR 6 (P&H). 7. We have gone through the aforesaid order of the Hon'ble High Court (supra). The Hon'ble jurisdictional High Court held that provision for submission of audit report along with return are not mandatory and that the audit report can be entertained during the assessment proceedings . In view of this, the issue is covered in favour of the assessee by the aforesaid decision of the Hon'ble jurisdictional High Court in 'CIT vs Punjab Financial Corporation' (supra). Considering the facts of the case, the issue is decided in favour of the assessee accordingly. 8. Ground No. 3 : V....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion 80-IC can lead to a situation where there can be more than one "initial assessment year" within the said period of 10 years. As per sub-section (6), cap is on the 10 assessment years. It is not on quantum. We have also to keep in mind the purpose for which Section 80-IC was enacted. The purpose was to establish the business of the nature specified in the said provision in the specified States. This provision was, thus, aimed at encouraging the undertakings or enterprises to establish and set up such units in the aforesaid States to make them industrially advanced States as well. Undoubtedly, these are difficult States as most of these States fall in hilly areas. Therefore, cost of production and transportation may also go up. 20. Whe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ntial expansion is undertaken becoming the initial assessment year. That in any case, the period of deduction u/s 80IC of the Act would not exceed 10 years. The conclusion of the Hon'ble Apex Court at para 24 of its order is as under: "24. The aforesaid discussion leads us to the following conclusions: (a) Judgment dated 20th August, 2018 in Classic Binding Industries case omitted to take note of the definition 'initial assessment year' contained in Section 80-IC itself and instead based its conclusion on the definition contained in Section 80-IB, which does not apply in these cases. The definitions of 'initial assessment year' in the two sections, viz. Sections 80-IB and 80- IC are materially different. The definition of 'initial a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n for the first five years, deduction @ 25% of the profits and gains for the next two years and @ 100% again from 8th year as this year becomes 'initial assessment year' once again However, this 100% deduction would be for remaining three years, i.e., 8th, 9th and 10th assessment years. 25. In view of the aforesaid, we affirm the judgment of the High Court on this issue and dismiss all these appeals of the Revenue. Likewise, appeals filed by the assessees are hereby allowed." 13. In view of the above, it is now settled law that even a new undertaking, which has claimed deduction of its eligible profits @ 100% thereof for the first five years, is entitled to claim deduction @ 100% of its profits thereafter on account of substantial expans....