TaxTMI 
TaxTMI 
2025 (2) TMI 1894
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....sufficiency and genuineness of the reasons for delay and accordingly, we condone the same by admitting the appeal for adjudication. 03. The only issue raised by the assessee is against the order of ld. CIT(A) allowing the claim of the assessee u/s 80IE of the Act of Rs. 5,82,61,479/-. 04. The facts in brief are that the assessee filed the return of income dated 28.09.2012, which was revised on 31.03.2014, wherein the total income was computed at Rs. nil after claiming deduction u/s 80IE of the Act to the tune of Rs. 15,97,27,673/-. The case of the assessee was selected for scrutiny and statutory and other notices were issued along with questionnaires and served upon the assessee. The ld. AO during the course of assessment proceedings observed that the assessee has claimed during the impugned assessment year, a deduction u/s 80IE of the Act of Rs. 15,97,27,683/- for which the assessee has submitted certificate from the auditors in form 10CEB. According to the ld. AO, the assessee has claimed deduction u/s 80IE of the Act, in respect of 16 undertakings. The ld. AO further noted that the assessee further claimed the deduction u/s 80IE of the Act for 3 more undertakings from A.Y.....
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....pacity/ modernization and diversification as against an increase by 33 ½% which was prescribed in NEIP, 1997. The matter is discussed by the AO from page 3 to page 8 of the assessment order. The AR of the appellant had laid stress on the point that the substantial expansion can be done in any year and the definition of 'initial assessment year' should be the year in which substantial expansion is made. The only requirement of the Act is substantial expansion should be any data between 01.04.2007 and 31.03.2017, which the appellant had complied. Nowehere, has it mandated that the substantial expansion once completed should be completed within same financial year. On an overall analysis of the matter, I find the case of the appellant has been squarely covered in its favour by the judgement of the jurisdictional Tribunal in the case of jay Shree Industries Ltd. Vs. JCIT (2018) 170 ITD 479 (Kolkata-Trib) and also by the judgment of the jurisdictional Tribunal in the case of DCIT Vs. Mcleod Russel India Ltd. (2019) in ITA No.116 & 117/KOL/2016 dated 01.02.2019 (copies of the orders on record), facts and circumstances being on similar footings. In such view of the matter, the AO i....
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....it is completed. The stand of the revenue that expansion should be completed in the same year in which it is commenced does not find any support from the statute. The revenue wants to be read words into the section which law does not permit. The above issue is squarely covered in favour of the appellant by the decision of the Hon'ble Tribunal in Jay Shree Industries Ltd. v. JCIT (2018) 170 ITD 479 (Kolkata Trib.) wherein it was held that that substantial expansion need not be completed within the same financial year (Page 174-182 of the Paper Book). The above decision was subsequently followed in DCIT v. Mcleod Russel India Ltd., ITA No. 116 & 117/Kol/2016 decided on February 1, 2019 (Page 164-173 of the Paper Book). On the aspect as to what items of plant and machinery should be considered for substantial expansion, it is submitted that it is indisputable that the business of growing and manufacturing tea is a composite activity. Because it is so, rule 8 of the Income Tax Rules, 1962, provides that income derived from the sale of tea grown and manufactured by the seller in India has to be computed in a composite manner as if the whole of it were derived from business and 40% of su....
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....f such items. In the absence of any such exclusion provision in section 80IE, the Assessing Officer ought not to have excluded the plant and machinery used in agricultural operations or those used for administrative purposes of the business including staff welfare. It is neither fair nor reasonable to say that only additions to the plant and machinery in the factory will be considered for ascertaining substantial expansion of a composite business undertaking. The ld. AR submitted that for the reasons aforesaid, the Assessing Officer should have allowed the entire claim of the appellant under section 80IE. 07. The ld. DR vehemently submitted before us that the appeal of the assessee was wrongly allowed by the ld. CIT(A) on this issue by holding that the substantial expansion undertaken by the three units even if completed even beyond the financial year in which it was first undertaken, the deduction u/s 80IE is available. The ld. Authorized Representative vehemently submitted that the substantial expansion has been completed in the assessment year in which it is started and therefore, the ld. AO has taken a very correct view of the matter by rejecting the claim u/s 80IE of the Ac....