TaxTMI 
TaxTMI 
2016 (2) TMI 1279
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....led to deduction u/s 80lC of Income Tax Act, 1961 @ 100% of profit derived from the industrial undertaking and the CIT(A) and the assessing officer has erred in restricting the deduction to 30%. The alleged reasons giving by the A.O. and CIT(A) for restricting the deduction to 30% are erroneous. 4. On the facts and circumstances of case and in law, the Commissioner of Income Tax (Appeal) erred in confirming the action of Assessing Officer of not allowing deduction u/s 80lC on Interest income of Rs. 35,44,359/-. 5. On the facts and circumstances of case and in law, the Commissioner of Income Tax (Appeal) erred in confirming the action of Assessing Officer of treating the interest income of Rs. 35,44,359/- as income from other sources instead of business income. 6. The appellant craves leave to add one or more ground of appeal or to alter / modify the existing ground before or at the time of hearing of appeal." 2. Facts of the case as narrated from paras 2.1 to 2.6 of Assessing Officer's order is extracted hereunder for ready reference. 2.1 "The assessee is a Limited company incorporated in the year 2000. Its registered office is at D-14, IInd floor, Preet Vihar, Delhi. It h....
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....aving been allowed by the department since Assessment Year 2004-05 is well taken. Even during the instant year, the claim is not questioned for non-fulfillment of statutory conditions. What is being questioned is the claim @ 100% of profits for the seventh Assessment Year. 3.10. The assessee is claiming that substantial expansion has been completed again during the A.Y. 2009-10 resulting in increase of installed capacity of the unit. Since the substantial expansion is completed again therefore, the initial Assessment Year is being refixed at Assessment Year 2009-10. This action of the assessee, claiming that substantial expansion can be undertaken twice and initial Assessment Year can be refixed again during the period of ten years is neither in conformity with the letter nor with the spirit of the legislature. 3.11. For the AY 2009-10 which was sixth year for the claim of deduction u/s. 80IC, the AO after detailed discussions vide assessment order dated 19.12.2011 rejected the assessee's claim of deduction @100% in the sixth year on the basis of substantial expansion. Aggrieved with this order the assessee filed appeal before CIT(A), Dehradun who rejected the the plea and uphe....
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.... assessee isn ot supporting its case." 3.12 In view of the above discussions, the deduction u/s 80 IC is restricted to 30% of profits of the instant Assessment Year. The assessee made the claim of deduction @ 100% of profits in the seventh year while it knew fully well that it was eligible for deduction @ 30% of the profits. Therefore, I have reasons to believe that the assessee furnished inaccurate particulars of income. Accordingly proceedings u/s 271(1)(c ) of the Act are being initiated separately for furnishing inaccurate particulars of income." 4. Aggrieved with the aforesaid order of the AO, assessee appealed before the Ld. CIT(A) who vide impugned order dated 22.2.2013 upheld the order of the AO on the issue of dispute and dismissed the appeal filed by the Assessee. 4.1 Against the order dated 22.2.2013 passed by the Ld. CIT(A), assessee is in appeal before the Tribunal. 5. First we take up the ground no. 4 & 5 raised by the assessee, in these grounds the grievance of the assessee is that Ld. CIT(A) has erred in confirming the action of AO of not allowing deduction u/s. 80IC on the interest income of Rs. 35,44,359/-. The AO has denied the deduction on this amount on the....
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....retation of the term "initial assessment year" and whether the same comes with any restriction. The Revenue seeks to take the color from the object of introducing Section 80-IC. The A.O. referred to policy of the government for giving incentives to the State of Uttaranchal and Himachal Pradesh. It is well settled that external aids should not be taken for the purpose of interpreting the Statute, when the language of the Section is clear and unambiguous. A plain reading of Sec.80-IC(8)(v) which defines the term "initial assessment year" read with Sec.80-IC(8)(ix) which defines the term "substantial expansion" makes it clear that there is no restriction or bar on more than one substantial expansion being undertaken by an assessee. In our view, a unit can undertake any number of substantial expansions, in the absence of any specific restriction in the Section. There is no suggestion in the language of the section that incentive u/s 80 IC is not available if the assessee substantially expands for a second or third time. Substantial expansion requires additional investment and results in higher production, employment etc. Industrialists have to be encouraged to undertake substantial exp....