M/s. Synergy Electric Pvt. Ltd., , Kolkata V. ITO, Ward - 12(3), Kolkata , Kolkata

ITA 1526/KOL/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 4399 (ITAT-KOLKATA)
• Duration Of Justice: 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 16-07-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P MAJUMDAR CITSRDR
• Assessee Lawyers: V N PUROHIT
• Keywords: Depreciation; Unabsorbed depreciation
• Section: 143(3); 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH SMC KOLKATA BEFORE SHRI S.S, GODARA, JUDICIAL MEMBER ITA NO.1526/KOL/2018 ASSESSMENT YEAR:2010-11 M/S SYNERGY ELECTRIC PVT. LTD. TRISHUL GROUND FLOOR, 35, ROWLAND ROAD, KOLKATA-20 [ PAN NO.AARCS 8436 Q ] / V/S . INCOME TAX OFFICER WARD-12(3), AAYAKAR BHAWAN, KOLKATA-69 /APPELLANT .. /RESPONDENT /BY APPELLANT SHRI V.N. PUROHIT, FCA /BY RESPONDENT SHRI P. MAJUMDAR, ADDL. CIT-SR-DR /DATE OF HEARING 25-10-2018 /DATE OF PRONOUNCEMENT 31-10-2018 /O R D E R THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2010-11 , ARISES AGAINST THE COMMISSIONER OF INCOME-TAX (APPEALS)-4, KOLKATAS O RDER DATED 29.06.2018 PASSED IN CASE NO.997/CIT(A)-4/2014-15 INVOLVING PROCEEDIN GS U/S. 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. THE ASSESSEES SOLE SUBSTANTIVE GROUND RAISED IN THE INSTANT APPEAL PLEADS THAT BOTH THE LOWER AUTHORITIES HAVE ERRED IN LAW AS WEL L AS ON FACTS IN WRONGLY ADJUSTING BROUGHT FORWARD LOSES AND DEPRECIATION AMOUNTING TO 123,19,711/- AGAINST THE BUSINESS PROFITS OF THE CURRENT ASSESSMENT YEAR BEF ORE ALLOWING SEC. 10B DEDUCTION THEREBY NOT ALLOWING THE CORRESPONDING RELIEF CLAIM ED TO THE TUNE OF 59,56,861/-. BOTH THE LEARNED REPRESENTATIVES REITERATE THEIR RE SPECTIVE PLEADINGS AGAINST AND IN SUPPORT OF LOWER AUTHORITIES ACTION. I FIND THE IM PUGNED ISSUE OF ADJUSTMENT OF ITA NO.1526/KOL/2018 A.Y. 2010-11 M/S SYNERGY ELECTRIC PVT. LTD. VS. ITO WD-12( 3), KOL PAGE 2 BROUGHT FORWARD LOSSES AGAINST THE CURRENT YEARS B USINESS PROFIT TO BE NO MORE RES INTEGRA . A CO-ORDINATE BENCHS DECISION IN ASSESSEES OWN CASE ITA NO.2004/KOL/2014 FOR THE VERY PRECEDING ASSESSMENT YEAR 2009-10 DEC IDED ON 29.11.2017 HAS REVERSED THE LOWER AUTHORITIES IDENT ICAL ACTION AS FOLLOWS:- 4. WE HAVE HEAD THE ARGUMENTS OF BOTH THE SIDES ON THIS ISSUE AN ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS OB SERVED THAT THE ISSUE INVOLVED IN THIS APPEAL OF THE ASSESSEE IS SQUARELY COVERED BY THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF CIT VS YOKOGAWA INDIA LTD. 291 CTR 1 WHEREIN ONE OF THE QUESTIONS REFERRED TO THE HON'BLE SUPREM E COURT FOR CONSIDERATION WAS WHETHER BROUGHT FORWARD BUSINESS LOSSES AND UNA BSORBED DEPRECIATION OF 10A UNITS OR NON 10A UNITS CAN BE SET OFF AGAINST T HE PROFITS OF ANOTHER 10A UNITS OF THE ASSESSEE. THIS QUESTION WAS ANSWERED B Y THE HON'BLE SUPREME COURT IN FAVOUR OF THE ASSESSEE BY HOLDING THAT THO UGH SECTION10A, AS AMENDED, IS A PROVISION FOR DEDUCTION, THE STAGE OF DEDUCTION WOULD BE WHILE COMPUTING THE GROSS TOTAL INCOME OF THE ELIGIBLE UN DERTAKING UNDER CHAPTER IV OF THE ACT AND NOT AT THE STAGE OF COMPUTATION OF T HE TOTAL INCOME UNDER CHAPTER VI. IT WAS HELD BY THE HON'BLE SUPREME COUR T THAT THE READING OF RELEVANT PROVISIONS OF SECTION 10A MAKES IT CLEAR T HAT THE DEDUCTION CONTEMPLATED THEREIN IS QUA THE ELIGIBLE UNDERTAKIN G OF THE ASSESSEE STANDING ON ITS OWN AND WITHOUT REFERENCE TO THE OTHER ELIGI BLE OR NON-ELIGIBLE UNITS OR UNDERTAKINGS OF THE ASSESSEE. IT WAS HELD THAT THE BENEFIT OF DEDUCTION UNDER SECTION 10A THUS IS GIVEN BY THE ACT TO THE INDIVID UAL UNDERTAKING AND RESULTANTLY FLOWS TO THE ASSESSEE. THIS DECISION RE NDERED IN THE CASE OF YOKOGAWA INDIA LTD. (SUPRA) HAS BEEN SUBSEQUENTLY F OLLOWED BY THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS J.P.MORGAN IND IA PVT LTD. 297 CTR 16 TO HOLD THAT WHILE COMPUTING DEDUCTION UNDER SECTION 1 0A, BROUGHT FORWARD UNABSORBED DEPRECIATION AND LOSS ARE NOT TO BE SET OFF AGAINST THE CURRENT YEAR PROFIT OF THE ELIGIBLE UNIT. SINCE THE PROVISIONS O F SECTION 10A ARE ANALOGOUS WITH THE PROVISIONS OF SECTION 10B, WE RESPECTFULLY FOLLOW THE DECISIONS OF THE HON'BLE SUPREME COURT IN THE CASE OF YOKOGWA INDIA LTD (SUPRA) AND J.P. MORGAN INDIA LTD. (SUPRA) AND DIRECT THE AO TO ALLO W DEDUCTION UNDER SECTION 10B TO THE ASSESSEE AS COMPUTED ON THE PROFITS OF T HE ELIGIBLE UNIT FOR THE YEAR UNDER CONSIDERATION WITHOUT SETTING OFF THE BROUGHT FORWARD UNABSORBED DEPRECIATION. 3. LEARNED DEPARTMENTAL REPRESENTATIVES CASE BEFO RE ME IS THAT THE SAID CO- ORDINATE BENCHS DECISION HAS NOT CONSIDERED HON'BL E APEX COURTS JUDGMENT IN CIT VS. HIMATASINGIKE SEIDE LTD. (2006) 286 ITR 255 (SC) AN D THIS TRIBUNALS SPECIAL BENCH IN GLOBAL VANTEDGE P LTD. VS. DCIT (2010) 1 ITR (TR IB) 326 (DEL) I FIND THAT THE CO- ORDINATE BENCH HAS GONE BY HON'BLE APEX COURTS DEC ISION (SUPRA) IN ACCEPTING ITA NO.1526/KOL/2018 A.Y. 2010-11 M/S SYNERGY ELECTRIC PVT. LTD. VS. ITO WD-12( 3), KOL PAGE 3 ASSESSEES CASE HEREINABOVE. THE REVENUES ARGUMENT S SUPPORTING BOTH THE LOWER AUTHORITIES ACTION IS DECLINED THEREFORE. 4. THIS ASSESSEES APPEAL IS ALLOWED ACCORDINGLY. ORDER PRONOUNCED IN OPEN COURT ON 31/10/2018 SD/- (S.S. GODARA) JUDICIAL MEMBE R KOLKATA, *DKP/SR.PS - 31/10/2018 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-M/S SYNERGY ELECTRIC PVT. LTD., TRISHUL , GR. FLOOR, 35, ROWLAND RO AD, KOLKATA-20 2. /RESPONDENT-INCOME TAX OFFICER, WARD-12(3), AAYAKAR BHAWAN, KOLKATA-69 3. ' % / CONCERNED CIT 4. % - / CIT (A) 5. & ))' , ' / DR, ITAT, KOLKATA 6. + / GUARD FILE. BY ORDER/ , /TRUE COPY/ / ',