ACIT, Tiruppur V. M/s. Flowlink Systems (P) Ltd., Coimbatore

ITA 1255/CHNY/2006

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4981 (ITAT-CHENNAI)
• Duration Of Justice: 5 year(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2011
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 06-06-2011
• Assessment Year: 2002-2003
• Appeal Filed On: 17-05-2006
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K E B RENGARAJAN JR
• Keywords: Set aside
• Section: 143(3); 80HHC; 234B; 80IB; 80IA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH D, CHENNAI B E F O R E DR. O.K.NARAYANAN, VICE PRESIDENT AND SHRI HARI OM MARATHA, JUDICIAL MEMBER .. I.T.A. NO.1255(MDS)/2006 ASSESSMENT YEAR: 2002-03 THE ASSISTANT COMMISSIONER M/S.FLOWL INK SYSTEMS(P) LTD., OF INCOME-TAX, 189/1A-C, UTHUPALAYAM, CIRCLE I, VS. ARASUR, COIMBATORE-641407. TIRUPUR. PAN AAACF3239K. (APPELLANT) (RESPONDENT) APPELLANT BY : S HRI K.E.B.RENGARAJAN, JR. STANDING COUNSEL RESPONDENT BY: NONE O R D E R PER DR.O.K.NARAYANAN, VICE-PRESIDENT: THIS APPEAL FILED BY THE REVENUE RELATES TO THE ASSESSMENT YEAR 2002-03 AND IT IS DIRECTED AGAINST THE ORDER PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)-II AT C OIMBATORE DATED ITA NO.1 255(MDS)/2006 2 22-2-2006. THE APPEAL ARISES OUT OF THE ASSESSMENT COMPLETED UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961. 2. WHEN THE MATTER WAS CALLED ON FOR HEARING, NOBO DY WAS PRESENT FOR THE RESPONDENT-ASSESSEE, INSPITE OF NOT ICE. THEREFORE, WE ARE PROCEEDING TO DISPOSE OF THE APPEAL EX PARTE, Q UA, THE ASSESSEE. WE HEARD SHRI K.E.B.RENGARAJAN, THE LEARNED STANDIN G COUNSEL APPEARING FOR THE REVENUE. 3. THE FIRST GROUND RAISED BY THE REVENUE IN THE P RESENT APPEAL IS THAT THE COMMISSIONER OF INCOME-TAX(APPEA LS) HAS ERRED IN DIRECTING THAT 80IB SHOULD BE ALLOWED ON THE ELIGIB LE PROFITS WITHOUT REDUCING THE DEDUCTION GIVEN UNDER SECTION 80HHC. IT IS THE CASE OF THE REVENUE THAT THE COMMISSIONER OF INCOME TAX (AP PEALS) HAS OVERLOOKED THE SPECIFIC PROVISION OF SUB-SECTION(9A ) TO SECTION 80IA OF THE INCOME-TAX ACT. ACCORDING TO THE REVENUE, THE DECISION OF THE COMMISSIONER OF INCOME TAX (APPEALS) MAKES WAY FOR OVERLAPPING THE DEDUCTION UNDER SECTION 80IA WITH THE DEDUCTION AVAILABLE UNDER SECTION 80HHC, ALREADY GRANTED TO THE ASSESSEE. 4. THIS ISSUE WAS CONSIDERED BY THE INCOME-TAX APP ELLATE TRIBUNAL, CHENNAI SPECIAL BENCH IN THE CASE OF ASSI STANT COMMISSIONER OF INCOME-TAX VS. ROGINI GARMENTS, 294 ITR (AT) 15 ITA NO.1 255(MDS)/2006 3 (CHENNAI) (SB). THE SPECIAL BENCH HAS HELD THAT TH E RESTRICTION IN SECTION 80IA WAS PROVIDED IN SUB-SECTION(9) BY AMEN DING THE SECTION, SO THAT UNINTENDED BENEFITS MAY NOT PASS ON TO THE ASSESSEE BY CLAIMING REPEATED DEDUCTIONS IN RESPECT OF THE SAME AMOUNT OF ELIGIBLE INCOME. IN VIEW OF THAT SUB-SECTION, THE TRIBUNAL HAS HELD THAT RELIEF UNDER SECTION 80IA SHOULD BE DEDUCTED FROM T HE PROFITS AND GAINS OF THE BUSINESS BEFORE COMPUTING RELIEF UNDER SECTION 80HHC OF THE ACT. ACCORDINGLY THE RELIEF UNDER SECTION 80IA SHOULD BE DEDUCTED FROM THE PROFITS AND GAINS OF BUSINESS BEFORE COMPU TING THE RELIEF AVAILABLE UNDER SECTION 80HHC. IN VIEW OF THE ABOV E, THE DEDUCTION AVAILABLE TO THE ASSESSEE UNDER SECTION 80IB SHOULD BE FIRST ALLOWED ON THE ELIGIBLE PROFITS BEFORE REDUCING THE DEDUCTI ON UNDER SECTION 80HHC AND THEREAFTER ALONE THE DEDUCTION UNDER SECT ION 80HHC WILL BE ALLOWED. THE DECISION OF THE COMMISSIONER OF IN COME TAX (APPEALS) ON THIS POINT IS SET ASIDE. THE ASSESSIN G AUTHORITY IS DIRECTED TO RECOMPUTE THE DEDUCTIONS UNDER SECTIONS 80IB AND 80HHC. THIS GROUND IS DECIDED IN FAVOUR OF THE REV ENUE. 5. THE NEXT GROUND RAISED BY THE REVENUE IS THAT T HE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN G IVING CREDIT TO THE MAT CREDIT WHILE COMPUTING THE LIABILITY OF INT EREST UNDER SECTIONS ITA NO.1 255(MDS)/2006 4 234B AND 234C. THIS ISSUE HAS BEEN CONSIDERED BY T HE INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH IN THE CASE OF M/S .SYNTHETIC INDUSTRIAL CHEMICALS LTD. VS. DCIT, 270 ITR 98 (AT) (COCHIN) AND HELD THAT MAT CREDIT BROUGHT DOWN FROM THE EARLIER ASSESSMENT YEAR IS TO BE GIVEN CREDIT FIRST IN COMPUTING THE INTERE ST LIABILITY. IN VIEW OF THIS, THE GROUND RAISED BY THE REVENUE FAILS. 6. IN RESULT THIS APPEAL FILED BY THE REVENUE IS P ARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON MONDAY, THE 6 TH DAY OF JUNE, 2011 AT CHENNAI. SD/- SD/- (HARI OM MARATHA) (DR. O.K.NARAYANAN) JUDICIAL MEMBER VICE-PRESIDENT CHENNAI, DATED THE 6 TH JUNE, 2011. V.A.P. COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT (4) CIT(A) (5) D.R. (6) G.F.