DCIT, Coimbatore V. M/s. Sri Ranganathar Valves (P) Ltd., Coimbatore

ITA 1577/CHNY/2012

• Counselvise Citation: 157721714 RSA 2012
• Duration Of Justice: 1 year(s) 4 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 30-12-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 09-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N MADHAVAN JT
• Assessee Lawyers: A S SRIRAMAN
• Keywords: Question of law; Revised return
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI [BEFORE DR. O.K. NARAYANAN, VICE-PRESIDENT AND SHRI S. S. GODARA, JUDICIAL MEMBER] I.T.A.NO.1577/MDS/2012 ASSESSMENT YEAR : 2009-10 THE DY. CIT COMPANY CIRCLE I(3) COIMBATORE VS M/S SRI RANGANATHAR VALVES (P) LTD 12/45, THADAGAM ROAD EDAYARPALAYAM COIMBATORE 641 025 [PAN AALCS 5492C] (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI N. MADHAVAN, JT. CIT RESPONDENT BY : SHRI A.S.SRIRAMAN, ADVOCATE DATE OF HEARING : 30-12-2013 DATE OF PRONOUNCEMENT : 30-12-2013 O R D E R PER S.S.GODARA, JUDICIAL MEMBER THIS APPEAL FILED BY THE REVENUE FOR ASSESSMENT Y EAR 2009- 10, IS DIRECTED AGAINST THE ORDER OF THE COMMISSION ER OF INCOME-TAX (APPEALS-I) COIMBATORE, DATED 21.5.2012, PASSED IN APPEAL NO.20A/11-12, IN PROCEEDINGS UNDER SECTION 143(3) O F THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT). I.T.A.NO.1577/12 :- 2 -: 2. IN THE COURSE OF HEARING, THE ONLY GRIEVANCE RAISE D BY THE REVENUE IS THAT THE CIT(A) HAS WRONGLY DELETED THE DISALLOWANCE/ ADDITION OF ` 1,04,91,822/- MADE BY THE ASSESSING OFFICER AFTER REJECTING ASSESSEES CLAIM OF DEDUCTION U/S 80IA OF THE ACT. IT ARGUES THAT THE IMPUGNED DISALLOWANCE OUGHT TO HAVE BEEN U PHELD IN THE LOWER APPELLATE PROCEEDINGS. ACCORDINGLY, THE REVEN UE PRAYS FOR ACCEPTANCE OF ITS APPEAL. 3. THE ASSESSEE SUPPORTS THE ORDER OF THE CIT(A) UNDER CHALLENGE AND PRAYS FOR CONFIRMATION THEREOF. 4. FACTS OF THE CASE ARE IN A VERY NARROW COMPASS. TH E ASSESSEE IS A PRIVATELY HELD COMPANY. IT RUNS A N ENGINEERING UNIT WITH FOUNDRY, MACHINES SHOP AND WINDMILLS. ON 25.9 .2009, THE ASSESSEE HAD RETURNED INCOME OF ` 27,85,53,260/-. THEREAFTER, IT CHOSE TO FILE REVISED RETURN ON 22.9.2010. THIS TIME, THE INCOME DECLARED STOOD AT ` 27,17,76,601/-. 5. AS WE SEE FROM THE ASSESSMENT ORDER DATED 29.3.2011 , THE ASSESSEE HAD PREFERRED TO FILE REVISED RETURN AFT ER DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF VE LAYUDHASAMY SPINNING MILLS PVT. LTD VS ACIT [REPORTED AS [2012]340 ITR 4 77 (MDS)] AND I.T.A.NO.1577/12 :- 3 -: CLAIMED IMPUGNED DEDUCTION OF ` 1,53,81,440/- U/S 80IA BY CLAIMING ITSELF TO BE AN UNDERTAKING ENGAGED IN INFRASTRUCTU RE DEVELOPMENT. THE ASSESSEE HAD BEEN FORMED BY DEMERGER OF UNIT II OF SRI RANGANATHAR INDUSTRIES LTD. WITH EFFECT FROM 1.4.2008. IN PREV IOUS YEAR RELEVANT TO THE IMPUGNED ASSESSMENT YEAR, IT HAD THREE WINDMILL UNITS I.E DIVISION I, II AND III WHICH COMMENCED PRODUCTION ON 31.3.20 03, 31.3.2006 AND 31.3.2007 RESPECTIVELY. THE CORRESPONDING CLAI MS OF DEDUCTION QUA AFORESAID UNITS READ ` 48,89,618/-, ` 61,53,679/- AND ` 43,38,143/-. AS PER ASSESSING OFFICER, THE IMPUGNED CLAIM WAS AL LOWABLE IN THE CASE OF UNIT I ONLY AND QUA OTHER TWO UNITS AGGREGATING TO ` 1,04,91,822/- (SUPRA) DESERVED TO BE DISALLOWED ON THE GROUND THA T AFTER SETTING OF THE LOSSES FROM THE SAID DIVISIONS IN PREVIOUS YEAR S AGAINST OTHER INCOME, NO FURTHER INCOME WAS ELIGIBLE FOR DEDUCTI ON U/S 80IA. HE ALSO REJECTED ASSESSEES CONTENTIONS ON THE BASIS OF AFORESAID CASE LAW AND HELD THAT REVENUES SPECIAL LEAVE PETITION WAS PENDING BEFORE THE HON'BLE APEX COURT. IN VIEW THEREOF, ASSESSEES TAXABLE INCOME WAS COMPUTED AT ` 28,22,68,423/-. 6. AGGRIEVED, THE ASSESSEE PREFERRED APPEAL. THE CIT (A), IN THE LOWER APPELLATE PROCEEDINGS, HAS DIRECTED THE A SSESSING OFFICER TO I.T.A.NO.1577/12 :- 4 -: ALLOW DEDUCTION AFORESAID BY TAKING INTO CONSIDERAT ION THE CASE LAW OF HON'BLE JURISDICTIONAL HIGH COURT (SUPRA). THEREFORE, THE REVENUE IS IN APPEAL. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE CASE FILE. WE MAKE IT CLEAR THAT IN THE INSTANT CASE, THERE IS NO DISPUTE IN SO FAR AS THE FACTS ARE CONCERNED. THE ISSUE BETWEEN THE PARTIES AND MORE PARTICULARLY RAISED ON BEHALF OF THE REVENUE IS THA T SINCE AFTER NOTIONALLY CARRYING FORWARD THE LOSSES OF PREVIOUS ASSESSMENT YEARS OF THE SUBSEQUENT TWO UNITS, THERE IS NO POSITIVE INCO ME, SO, THE ASSESSEES CLAIM OF DEDUCTION COULD NOT HAVE BEEN A CCEPTED BY THE CIT(A). AFTER PERUSING THE JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT (SUPRA), WE NOTICE THAT THE FACTS IN HAND ARE SQUARELY COVERED BY THE SAME. EVEN THE ASSESSING OFFICER IS FAIR ENOUG H TO ADMIT THAT THE CASE LAW DOES NOT APPLY ONLY ON THE GROUND THAT SIN CE THE SPECIAL LEAVE PETITION PREFERRED BY THE REVENUE IS PENDING, THE CASE LAW OF THE TRIBUNAL IN M/S CHETTINADU LIGNITE TRANSPORT SERV ICES PVT. LTD. WOULD APPLY IN THE INSTANT CASE. AFTER GIVING OUR THOUGH TFUL CONSIDERATION, WE HARDLY SEE ANY REASON TO ACCEPT THE CONTENTION OF T HE REVENUE AND THE STAND ADOPTED BY THE ASSESSING OFFICER. IN THE HIE RARCHY OF JUDICIAL I.T.A.NO.1577/12 :- 5 -: PRECEDENCE, ONCE THE HON'BLE JURISDICTIONAL HIGH C OURT HAS SETTLED A SUBSTANTIAL QUESTION OF LAW AND THE TRIBUNAL ADOP TS A DIFFERENT APPROACH, THE FORMER CASE LAW HAS TO PREVAIL AND N OT THE LATTER ONE. HENCE, WE AGREE WITH THE ORDER OF THE CIT(A) AND HO LD THAT THE IMPUGNED CLAIM OF DEDUCTION U/S 80IA COULD NOT HAV E BEEN DENIED BY THE ASSESSING OFFICER MERELY ON THE GROUND THAT AFT ER NOTIONALLY CARRYING FORWARD LOSSES OF PREVIOUS YEARS, THERE IS NO POSITIVE INCOME LEFT TO BE CONSIDERED FOR THE PURPOSE OF DEDUCTION U/S 80IA IN THE IMPUGNED ASSESSMENT YEAR. THE FINDINGS UNDER CHALL ENGE OF THE CIT(A) ARE ACCORDINGLY CONFIRMED. 8. THE REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON MONDAY, THE 30 TH OF DECEMBER, 2013, AT CHENNAI SD/- SD/- (DR. O.K. NARAYANAN) VICE-PRESIDENT (S. S. GODARA) JUDICIAL MEMBER DATED: 30 TH DECEMBER, 2013 RD COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR