ACIT, CHENNAI V. M/s. Mohan Breweries and Distilleries Ltd., CHENNAI

ITA 1381/CHNY/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64273 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 13-09-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 22-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K E B RENGARAJAN JR STAND ING
• Keywords: Depreciation; Unabsorbed depreciation
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI BEFORE DR. O.K.NARAYANAN, VICE-PRESIDENT AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ITA NO.1381(MDS)/2012 ASSESSMENT YEAR : 2008-09 THE ASSISTANT COMMISSIONER OF INCOME-TAX, COMPANY CIRCLE IV(3), CHENNAI. VS. M/S.MOHAN BREWERIES AND DISTILLERIES LTD., 158, ANNA SALAI, RAYALA TOWERS, II FLOOR, CHENNAI-600 002. PAN AAACM2415L. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI KEB RENGARAJAN, JR.S TANDING COUNSEL RESPONDENT BY : SHRI SAROJ KUMAR PARIDA, ADVOC ATE DATE OF HEARING : 13 TH SEPTEMBER, 2012 DATE OF PRONOUNCEMENT : 13 TH SEPTEMBER, 2012 O R D E R PER DR.O.K.NARAYANAN, VICE PRESIDENT THIS APPEAL FILED BY THE REVENUE RELATES TO THE ASSESSMENT YEAR 2008-09. THE APPEAL IS DIRECTED AG AINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS)-V AT CHENNAI, DATED 21-3-2012 AND ARISES OUT OF THE ASSESSMENT CO MPLETED UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961. - - ITA 1381 OF 2012 2 2. THE CONTENTION OF THE REVENUE IN THIS APPEAL IS THAT THE COMMISSIONER OF INCOME-TAX(APPEALS) HAS ERRED I N EXCLUDING THE SET OFF OF UNABSORBED DEPRECIATION AND BUSINESS LOSSES OF EARLIER YEARS IN COMPUTING THE PROFITS OF ELIGIBLE BUSINESS FOR DEDUCTION UNDER SECTION 80IA OF THE ACT. IT IS THE CASE OF THE REVENUE THAT IF THOSE UNABSORBED DEPRECIATION AND B USINESS LOSSES OF EARLIER YEARS WERE SET OFF, THERE WOULD B E NO PROFIT ON WHICH THE ASSESSEE COULD CLAIM THE DEDUCTION UNDER SECTION 80IA OF THE ACT. IT IS THE FURTHER CASE OF THE REV ENUE THAT THE COMMISSIONER OF INCOME-TAX(APPEALS) HAS ERRED IN HO LDING THAT THE UNABSORBED DEPRECIATION OR BUSINESS LOSSES OF T HE ELIGIBLE BUSINESS PRIOR TO SUCH INITIAL ASSESSMENT YEAR WOUL D NOT BE COVERED BY LEGAL FICTION OF SECTION 80IA(5). 3. THIS ISSUE WAS CONSIDERED BY THE HONBLE MADRAS HIGH COURT IN ASSESSEES OWN CASE THROUGH THE JUDGM ENT OF THEIR LORDSHIPS DATED MARCH 11, 2010, REPORTED IN 340 ITR 477. THE HONBLE COURT HAS HELD THEREIN THAT WHERE THE DEPRE CIATION AND LOSS OF EARLIER YEARS WERE ALREADY SET OFF AND ADJU STED AGAINST THE PROFITS OF EARLIER YEARS, THERE WAS NO EARLIER DEPRECIATION OR LOSS OF THE ELIGIBLE UNDERTAKING TO BE FURTHER SET OFF AND IN SUCH - - ITA 1381 OF 2012 3 CIRCUMSTANCES THERE IS NO ROOM FOR ANY NOTIONAL SET OFF OF LOSSES AND DEPRECIATION PERTAINING TO EARLIER ASSESSMENT Y EARS. 4. IN VIEW OF THE ABOVE JUDGMENT, WE FIND THAT THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS) IN THIS CAS E IS JUST AND PROPER AND IN ACCORDANCE WITH LAW. HIS ORDER IS, T HEREFORE, UPHELD. 5. IN RESULT, THIS APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON THURSDAY, THE 13 TH OF SEPTEMBER, 2012 AT CHENNAI. SD/- SD/- (CHALLA NAGENDRA PRASAD) ( DR. O.K.NARAYANAN) JUDICIAL MEMBER VICE-PRESIDENT CHENNAI, DATED, THE 13 TH SEPTEMBER, 2012. V.A.P. COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GF.