DCIT, Tiruppur V. Sri Vignesh Yarns P Ltd., Tiruppur

ITA 1218/CHNY/2014

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 8773 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-02-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 27-01-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 06-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GURU BHASHYAM
• Assessee Lawyers: N VIJAYAKUMAR
• Keywords: Depreciation
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : CHENNAI . . , . . , !' [BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI S. S. GODARA, JUDICIAL MEMBER] ./ I.T.A.NO.1217/MDS/2014 / ASSESSMENT YEAR : 2009-10 THE DY. COMMISSIONER OF INCOME-TAX COMPANY CIRCLE TIRUPUR VS. M/S INDIA DYEING MILLS PVT. LTD NO.16-17 KUMAR NAGAR SOUTH 2 ND STREET, TIRUPUR 641 603 [PAN AAACI 4602 B] ( #$ / APPELLANT) ( %&#$ /RESPONDENT) ./ I.T.A.NO.1218/MDS/2014 / ASSESSMENT YEAR : 2009-10 THE DY. COMMISSIONER OF INCOME-TAX COMPANY CIRCLE TIRUPUR VS. M/S SRI VIGNESH YARNS P. LTD 88, F-17-C KAMARAJ ROAD TIRUPUR 641 604 [PAN AACCS 4775 P] ( #$ / APPELLANT) ( %&#$ /RESPONDENT) / APPELLANT BY : SHRI GURU BHASHYAM, JCIT /RESPONDENT BY : SHRI N. VIJAYAKUMAR, CA / DATE OF HEARING : 27-01-2015 / DATE OF PRONOUNCEMENT : 4 -02-2015 I.T.A.NOS.1217 & 1218/14 :- 2 -: ' / O R D E R PER S.S.GODARA, JUDICIAL MEMBER THESE REVENUES APPEALS IN CASE OF DIFFERENT A SSESSEES FOR ASSESSMENT YEARS 2009-10 AND 2010-11, ARE DIRECTED AGAINST SEPARATE ORDERS OF THE COMMISSIONER OF INCOME-TAX (APPEALS) -II COIMBATORE DATED 31.12.2013 AND 24.12.2013 PASSED IN APPEAL NOS. 224/11-12 AND 82/12-13 RESPECTIVELY, IN PROCEEDINGS UNDER SEC TION 143(3) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT). 2. A PERUSAL OF THE CASE FILES REVEALS THAT THESE APPE ALS ARE TIME BARRED BY 46 DAYS AND 47 DAYS RESPECTIVELY. THE DY. CIT, TIRUPUR, HAS FILED CONDONATION AFFIDAVITS DATED 7. 5.2014 EXPLAINING REASONS THEREOF. THE ASSESSEES DO NOT OBJECT TO SO LEMN AFFIRMATIONS AVERRED THEREIN. THEREFORE, WE CONDONE DELAY OF 4 6 DAYS AND 47 DAYS IN FILING THESE APPEALS. 3. THE REVENUES IDENTICAL GROUNDS RAISED IN BOTH CASE S READ AS FOLLOWS: 1. THE ORDER OF THE LEARNED CIT (APPEALS-IL, COIMBATOR E IS AGAINST FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE LEARNED CIT (APPEALS)-II, COIMBATORE HAS ERRE D IN HOLDING THAT THE ASSESSEE IS ENTITLED FOR DEDUCTION U/S-80 IA. 3. THE LEARNED CIT (APPEALS)-II, COIMBATORE HAS ERR ED IN HOLDING I.T.A.NOS.1217 & 1218/14 :- 3 -: THAT THE ASSESSMENT YEAR 2005-06 IS THE FIRST INITIAL ASSESSMENT YEAR IN WHICH THE ASSESSEE HAD CLAIMED THE DEDUCTIO N U/S-80IA, AND, THEREFORE THE DEPRECIATION OF EARLIER YEARS (W HICH ALREADY HAVE BEEN ABSORBED) CANNOT BE NOTIONALLY CA RRIED FORWARD AND CONSIDEREDIN COMPUTING THE QUANTUM OF DEDUCTION U/S-80IA. 4. THE LEARNED CIT (APPEALS)-IL, COIMBATORE, SHOULD HAVE OBSERVED THAT AS PER THE PROVISIONS OF SECTION-80IA (2) AN ASSESSEE CAN OPT FOR DEDUCTION OF ANY TEN CONSECUTI VE YEARS OUT OF FIFTEEN YEARS, RECKONED FROM THE FIRST YEAR IN W HICH THE UNDERTAKING ENTERPRISE GENERATES POWER OR COMMENCES TRANSMISSION OR DISTRIBUTES POWER, ETC. 5. THE LEARNED CIT (APPEALS)-II, COIMBATORE, OUGHT TO HAVE APPRECIATED, THAT AS PERTHE PROVISIONS OF THE SECTI ON-80IA(5) THE ELIGIBLE UNDERTAKING SHOULD BE TREATED ASONLY SOURC E OF INCOME FOR COMPUTING THE QUANTUM OF DEDUCTION ALLOWABLE U/S. 80LA. 6. THE LEARNED CIT (APPEALS)-II, COIMBATORE, SHOUL D HAVE TAKEN NOTE OF THE FACT THAT THE SEC-80IA(5) BEGINS WITH A NON-OBSTANTE CLAUSE; AND, THEREFORE, THE RESTRICTION THEREIN, SHALL PREVAIL IN COMPUTING AND ALLOWING THE DEDUCTION U/S-80IA. 4. BOTH PARTIES INFORM US THAT THE SOLE IDENTICAL ISSU ED INVOLVED IN BOTH THESE CASES IS THAT OF DISALLOWANCE OF DEDU CTION U/S 80IA. THEREFORE, WE TREAT I.T.A.NO. 1217/MDS/2014 IN CASE OF M/S INDIA DYEING MILLS PVT. LTD. AS THE LEAD CASE. 5. THE ASSESSEE-COMPANY IS ENGAGED IN THE BUSINESS OF TEXTILE PROCESSING AND ALSO GENERATES WINDMILL ENERGY. IT HAD FILED ITS RETURN ON 28.9.2009 ADMITTING INCOME OF ` 2,73,82,420/-. THE ASSESSING OFFICER TOOK-UP SCRUTINY. HE INTER ALIA NOTICED THE ASSESSEES CLAIM OF DEDUCTION U/S 80IA. HE WAS OF THE VIEW THAT SECTI ON 80IA(5) I.T.A.NOS.1217 & 1218/14 :- 4 -: MANDATES COMPUTATION OF ELIGIBLE BUSINESS AS IF THE VERY BUSINESS IS THE ONLY SOURCE OF ASSESSEES INCOME FROM THE INI TIAL ASSESSMENT YEAR I.E THE YEAR OF COMMENCEMENT OF BUSINESS. THE ASS ESSEE PLEADED THAT THIS MEANT TO BE THE FIRST YEAR OF CLAIMING SE CTION 80IA DEDUCTION AS PER CASE LAW OF VELAYUDHASWAMY SPINNING MILLS P . LTD VS ACIT [2012] 340 ITR 477(MAD). THE ASSESSING OFFICER OBSE RVED IN ASSESSMENT ORDER DATED 25.12.2011 THAT REVENUES SP ECIAL LEAVE PETITION AGAINST THE AFORESAID DECISION IS PENDING IN THE APEX COURT AND INVOKED SECTION 80IA TO DISALLOW/ADD THE AMOUNT IN QUESTION OF ` 79,66,562/-. 6. THE ASSESSEE PREFERRED AN APPEAL. THE CIT(A) HAS FOLLOWED THE AFORESAID CASE LAW AND HOLDS THAT THE INITIAL Y EAR HAS TO BE THE FIRST YEAR OF CLAIMING SECTION 80IA DEDUCTION. THE REFORE, THE REVENUE IS IN APPEAL. 7. WE HAVE HEARD BOTH PARTIES AND PERUSED THE CASE FIL E. THERE IS NO DISPUTE THAT THE HON'BLE JURISDICTIONAL HIGH COURT HAS SETTLED THE LAW ABOUT THIS AMBIGUITY SOUGHT TO BE PROJECTED AT THE REVENUES INSTANCE IN INTERPRETING 80IA(5) THAT THE INITIAL Y EAR HAS TO BE CONSTRUED AS THE FIRST YEAR OF CLAIMING THE IMPUGNE D DEDUCTION. THE I.T.A.NOS.1217 & 1218/14 :- 5 -: REVENUE ARGUES THAT ITS SLP IS PENDING BEFORE THE A PEX COURT. IN OUR VIEW, THIS ITSELF DOES NOT FORM A VALID BASIS TO A DOPT A DIFFERENT APPROACH. THE CIT(A)S ORDER IS AFFIRMED. THE REV ENUES GROUNDS ARE REJECTED. THE REVENUES APPEAL I.T.A.NO.1217/MDS/2014 IS DIS MISSED. 8. SAME ORDER TO FOLLOW IN I.T.A.NO.1218/MDS/2014. 9. BOTH THESE REVENUES APPEALS ARE DISMISSE D. ORDER PRONOUNCED ON WEDNESDAY, THE 4 TH OF FEBRUARY, 2015, AT CHENNAI. SD/- SD/- ( . . ) (B.R. BASKARAN) / ACCOUNTANT MEMBER ( . . ) (S. S. GODARA) ! '# / JUDICIAL MEMBER $! / CHENNAI %' / DATED: 4 TH FEBRUARY, 2015 RD '&'' ()'*) / COPY TO: ' 1 . / APPELLANT ' 2. / RESPONDENT 3. ' +',- / CIT(A) 4. ' + / CIT 5. )./' 0 / DR 6. /1'2 / GF