Aggarwal & Co. (Engg. & Eractors) v. Dy. CIT

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The Tax Publishers2016 TaxPub(DT) 4238 (Asr-Trib) : (2016) 160 ITD 0540 Aggarwal & Co. (Engg. & Eractors) v. Dy. CIT INCOME TAX ACT, 1961 --Deduction under section 80-IC--Substantial expansionCommencement of period of deduction ----Where an assessee had begun operation with a unit in 1996 and created a new unit by way of substantial expansion in 2004, the commencement of ten years period as per section 80-IC(6) in case of the second unit will be from 2005 and not 1996, as the provision is applicable to the unit and not to assessee --Assessee had established an industrial undertaking and claimed deduction under section 80-IB for the first time for assessment year 1997-98. Subsequently substantial expansion was carried out in assessment year 2004-05 by setting up a new unit described as Unit-II and old unit was described as the Unit-I. Assessee claimed deduction under section 80-IC in respect of income of Unit-II. Revenue restricted the deduction with regard thereto up to assessment year 2006-07 on the ground that period of deduction was ten years from the initial assessment year and since the first year in which deduction was claimed was assessment year 1997-98, deduction could be claimed up to assessment year 2006-07 only in view of section 80-IC(6). *Held:* Section 80-IC(6) evidently talks of an 'undertaking' or 'enterprise'. Thus restriction of the period of deduction pertains to an undertaking or enterprise belonging to an assessee and not to the assessee as had erroneously been done by the revenue. Unit-II arising due to substantial expansion constituted a news business or enterprise and assessee was eligible for deduction under section 80-IC for a period of ten years from the initial assessment year of that unit. Income Tax Act, 1961, Section 80-IC *Relied:*CIT v. Vegetable Products Ltd. 88 ITR 192 (SC) and Joonktolle Tea & Industries Ltd. v. Dy. CIT ITA Nos. 110 and 401 (Kol) of 2010, dt. 24-9-2019. *REFERRED :* FAVOUR : In assessee's favour A.Y. : 2008-09 IN THE ITAT, AMRITSAR BENCH A.D. JAIN, J.M. & T.S. KAPOOR, A.M. Aggarwal & Co. (Engg. & Eractors) v. Dy. CIT IT Appeal No. 600 (Asr.) of 2011 A.Y. 2008-09 19 July, 2016 Appellant by: Sandeep Vijh, CA Respondent by: A.N. Mishra, DR ORDER SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2016 TaxPub(DT) 4238 (Asr-Trib) : (2016) 160 ITD 0540

Aggarwal & Co. (Engg. & Eractors) v. Dy. CIT

INCOME TAX ACT, 1961

--Deduction under section 80-IC--Substantial expansionCommencement of period of deduction ----Where an assessee had begun operation with a unit in 1996 and created a new unit by way of substantial expansion in 2004, the commencement of ten years period as per section 80-IC(6) in case of the second unit will be from 2005 and not 1996, as the provision is applicable to the unit and not to assessee --Assessee had established an industrial undertaking and claimed deduction under section 80-IB for the first time for assessment year 1997-98. Subsequently substantial expansion was carried out in assessment year 2004-05 by setting up a new unit described as Unit-II and old unit was described as the Unit-I. Assessee claimed deduction under section 80-IC in respect of income of Unit-II. Revenue restricted the deduction with regard thereto up to assessment year 2006-07 on the ground that period of deduction was ten years from the initial assessment year and since the first year in which deduction was claimed was assessment year 1997-98, deduction could be claimed up to assessment year 2006-07 only in view of section 80-IC(6). Held: Section 80-IC(6) evidently talks of an 'undertaking' or 'enterprise'. Thus restriction of the period of deduction pertains to an undertaking or enterprise belonging to an assessee and not to the assessee as had erroneously been done by the revenue. Unit-II arising due to substantial expansion constituted a news business or enterprise and assessee was eligible for deduction under section 80-IC for a period of ten years from the initial assessment year of that unit.

Income Tax Act, 1961, Section 80-IC

Relied:CIT v. Vegetable Products Ltd. 88 ITR 192 (SC) and Joonktolle Tea & Industries Ltd. v. Dy. CIT ITA Nos. 110 and 401 (Kol) of 2010, dt. 24-9-2019.

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2008-09

IN THE ITAT, AMRITSAR BENCH

A.D. JAIN, J.M. & T.S. KAPOOR, A.M.

Aggarwal & Co. (Engg. & Eractors) v. Dy. CIT

IT Appeal No. 600 (Asr.) of 2011

A.Y. 2008-09

19 July, 2016

Appellant by: Sandeep Vijh, CA

Respondent by: A.N. Mishra, DR

ORDER