DCIT, CHENNAI V. GRT Jewellers Pvt. Ltd., CHENNAI

ITA 1037/CHNY/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 90651 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2015
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 07-05-2015
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Keywords: Depreciation

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : CHENNAI . . . , ! , ' #$ % [ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER ] ./ I.T.A.NO.1037/MDS/2015 / ASSESSMENT YEAR : 2010-11 THE DY. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE 3(3) CHENNAI VS. M/S GRT JEWELLERS (INDIA) PVT. LTD 136 USMAN ROAD T. NAGAR CHENNAI 600 017 [PAN AAACR 3582 R] ( &' / APPELLANT) ( ()&' /RESPONDENT) / APPELLANT BY : SHRI A.V. SREEKANTH, JCIT /RESPONDENT BY : SHRI PHILIP GEORGE, ADVOCATE / DATE OF HEARING : 15-07-2015 / DATE OF PRONOUNCEMENT : 17-07-2015 / O R D E R PER N.R.S.GANESAN, JUDICIAL MEMBER THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-II, CHENNA I, DATED 14.11.2014 AND PERTAINS TO ASSESSMENT YEAR 2010-11 . 2. THE ONLY ISSUE ARISES FOR CONSIDERATION IS DEDUCTIO N U/S 80IA OF THE ACT TO THE EXTENT OF ` 60,16,777/-. ITA NO. 1037/15 :- 2 -: 3. SHRI A.V. SREEKANTH, LD. DEPARTMENTAL REPRESENTATIV E SUBMITTED THAT THE ASSESSING OFFICER DISALLOWED THE CLAIM OF THE ASSESSEE U/S 80IA OF THE ACT ON THE GROUND THAT T HE DEPARTMENT HAS FILED AN APPEAL BEFORE THE APEX COURT AGAINST THE J UDGMENT OF THE MADRAS HIGH COURT IN M/S VELAYUDHASWAMY SPINNING MI LLS PVT. LTD. & OTHERS VS ACIT IN TAX CASE (APPEALS) NOS.909 & 940 OF 2009 AND 918 OF 2008. REFERRING TO THE ORDER OF THE HYDERABAD BENCH OF THIS TRIBUNAL IN THE CASE OF M/S HYDERABAD CHEMICALS SUP PLIES LTD & OTHERS VS ACIT IN I.T.A.NO.352/HYD/2005 DATED 21.1.2011, THE LD. DR POINTED OUT THAT THIS ORDER OF THE HYDERABAD BENCH OF THIS TRIBUNAL AUTHORED BY ONE OF THE MEMBER WHO IS CONSTITUTING T HE PRESENT BENCH NAMELY, LD. ACCOUNTANT MEMBER, AFTER REFERRING TO T HE JUDGMENT OF THE MADRAS HIGH COURT, OBSERVED THAT THE JUDGMENT OF TH E MADRAS HIGH COURT IN M/S VELAUDHASWAMY SPINNING MILLS PVT. LTD. & OTHERS (SUPRA) WAS OF NON-JURISDICTIONAL HIGH COURT AND IT WAS REN DERED WITHOUT HAVING BEEN INFORMED CERTAIN STATUTORY PROVISIONS THAT ARE DIRECTLY RELEVANT. ACCORDINGLY, THE HYDERABAD BENCH PREFERR ED TO FOLLOW THE DECISION OF THE AHMEDABAD SPECIAL BENCH IN GOLD MIN E SHARES & FINANCE (P) LTD. 113 ITD 209. ACCORDING TO THE LD. DR, IN VIEW OF THIS DECISION OF THE TRIBUNAL, THE DEPRECIATION WHICH WA S ALREADY SET OFF HAS TO BE NOTIONALLY CARRIED FORWARD TO THE SUBSEQUENT YEAR FOR THE PURPOSE OF COMPUTING THE ELIGIBLE PROFIT FOR DEDUCTION U/S 80IA. ITA NO. 1037/15 :- 3 -: 4. ON THE CONTRARY, SHRI PHILIP GEORGE, LD. COUNSEL FO R THE ASSESSEE SUBMITTED THAT AN IDENTICAL ISSUE CAME BE FORE THIS TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 20 08-09 IN I.T.A.NO. 805/MDS/2014 DATED 9.6.2014. THIS TRIBUNAL, BY FOL LOWING THE JUDGMENT OF THE MADRAS HIGH COURT IN M/S VELAYUDHAS WAMY SPINING MILLS PVT. LTD. & OTHERS (SUPRA) DISMISSED THE REVE NUES APPEAL ON IDENTICAL GROUNDS. THE LD. COUNSEL HAS ALSO PLACE D HIS RELIANCE ON THE ORDER OF THIS TRIBUNAL IN THE CASE OF ACIT VS M/S M.M. FORGINGS LTD IN I.T.A.NO. 2679/MDS/2014 DATED 19.6.2015. THIS TRIB UNAL CONFIRMED THE ORDER OF THE CIT(A) BY PLACING RELIANCE ON THE JUDGMENT OF THE MADRAS HIGH COURT IN M/S VELAYUDHASWAMY SPINNING MI LLS PVT. LTD. & OTHERS (SUPRA). ACCORDING TO THE LD. COUNSEL, THIS ORDER OF THE TRIBUNAL WAS AUTHORED BY LD. ACCOUNTANT MEMBER. EVEN OTHERW ISE, ACCORDING TO THE LD. COUNSEL, THE JUDGMENT OF THE MADRAS HIGH COURT IN THE CASE OF M/S VELAYUDHASWAMY SPINNING MILLS PVT. LTD. & OT HERS (SUPRA) IS BINDING ON THIS TRIBUNAL. THEREFORE, MERELY BECAUS E THE SPECIAL LEAVE PETITION IS PENDING BEFORE THE APEX COURT CANNOT B E A REASON TO TAKE A DIFFERENT VIEW. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. AD MITTEDLY, THE MADRAS HIGH COURT IN M/S VELAYUDHASWAMY SPINNING MILLS PVT . LTD. & OTHERS (SUPRA) EXAMINED THE ISSUE ELABORATELY AND FOUND TH AT DEPRECIATION ITA NO. 1037/15 :- 4 -: WHICH WAS ALREADY SET OFF CANNOT BE CARRIED FORWARD NOTIONALLY TO THE SUBSEQUENT YEARS AND SET OFF FOR THE PURPOSE OF ALL OWING DEDUCTION U/S 80IA. IN FACT, THE CIT(A) HAS FOLLOWED THE JUD GMENT OF THE MADRAS HIGH COURT AND ALLOWED THE CLAIM OF THE ASSESSEE. THE ONLY OBJECTION OF THE DEPARTMENT BEFORE THIS TRIBUNAL IS THAT THE SLP IS PENDING BEFORE THE APEX COURT AGAINST THE JUDGMENT OF MADRA S HIGH COURT IN M/S VELAYUDHASWAMY SPINNING MILLS PVT. LTD. & OTHER S (SUPRA). THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT MERE PEN DENCY OF THE SLP BEFORE THE APEX COURT IS NOT A GROUND FOR NOT FOLLO WING THE JUDGMENT OF THE MADRAS HIGH COURT. IT IS NOT THE CASE OF TH E REVENUE THAT OPERATION OF THE MADRAS HIGH COURTS JUDGMENT WAS S TAYED BY THE APEX COURT. IN THOSE CIRCUMSTANCES, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE CIT(A) HAS RIGHTLY FOLLOWED THE BI NDING JUDGMENT OF THE JURISDICTIONAL HIGH COURT. THEREFORE, THIS TRIBUNAL DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A). ACCORDINGLY, THE SAME IS CONFIRMED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH OF JULY, 2015, AT CHENNAI. SD/- SD/- ( ! ) (CHANDRA POOJARI) ' / ACCOUNTANT MEMBER ( . . . ! ) (N.R.S. GANESAN) / JUDICIAL MEMBER '# / CHENNAI $% / DATED: 17 TH JULY, 2015 RD ITA NO. 1037/15 :- 5 -: %&'' ()'*) / COPY TO: ' 1 . / APPELLANT 4. ' + / CIT 2. / RESPONDENT 5. ),-' . / DR 3. ' +'/! / CIT(A) 6. -0'1 / GF