DCIT, CHENNAI V. M/s. Electronic Corporation of Tamilnadu Limited, CHENNAI

ITA 1594/CHNY/2008

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61323 (ITAT-CHENNAI)
• Duration Of Justice: 3 year(s) 11 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 10-07-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 24-07-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ANIRUDH RAI IRS
• Assessee Lawyers: S SRIDH

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI BEFORE DR. O.K.NARAYANAN, VICE-PRESIDENT AND SHRI V.DURGA RAO, JUDICIAL MEMBER I.T.A. NO. 1594/MDS/2008 ASSESSMENT YEAR : 2003-04 THE DEPUTY COMMISSIONER OF INCOME-TAX, COMPANY CIRCLE-II(1), CHENNAI-34. (APPELLANT) VV VS M/S.ELECTRONIC CORPORATION, OF TAMILNADU LIMITED, 692, ANNA SALAI, MHU COMPLEX, NANDANAM, CHENNAI 600 035. PAN AAACE1670K (RESPONDENT) APPELLANT BY : SHRI ANIRUDH RAI, IRS, CIT RESPONDENT BY : SHRI S. SRIDH AR, ADVOCATE DATE OF HEARING : 10 TH JULY, 2012 DATE OF PRONOUNCEMENT : 10 TH JULY, 2012 O R D E R PER DR. O.K.NARAYANAN, VICE PRESIDENT THIS APPEAL FILED BY THE REVENUE RELATES TO THE A SSESSMENT YEAR 2003-04. THE APPEAL IS DIRECTED AGAINST THE O RDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-XII AT CHENNAI DATED ITA 1594/08 :- 2 -: 28.3.2008. THE APPEAL ARISES OUT OF THE ASSESSMENT COMPLETED UNDER SEC.143(3) OF THE INCOME-TAX ACT, 1961. 2. THE FIRST GROUND RAISED BY THE REVENUE IS THAT T HE COMMISSIONER OF INCOME-TAX(APPEALS) HAS ERRED IN HO LDING THAT THE LOSS ON INVESTMENTS WRITTEN OFF BY THE ASSESSEE OF ` 2,04,90,274/- SHOULD BE ALLOWED AS A DEDUCTION, TRE ATING IT AS BUSINESS LOSS. THE SECOND GROUND RAISED BY THE REV ENUE IS THAT THE COMMISSIONER OF INCOME-TAX(APPEALS) HAS ERRED I N RESTRICTING THE DISALLOWANCE OF PRIOR PERIOD EXPENSES TO ` 1,45,371/-. 3. SHRI ANIRUDH RAI, THE LEARNED COMMISSIONER OF IN COME-TAX APPEARING FOR THE REVENUE SUBMITTED THAT THESE ISSU ES HAVE BEEN CONSIDERED BY THE INCOME-TAX APPELLATE TRIBUNAL, CH ENNAI A BENCH IN ASSESSEES OWN CASE FOR EARLIER ASSESSMENT YEAR 2001- 02 THROUGH THEIR ORDER DATED 11.1.2008 PASSED IN IT A NO.1112/MDS/2006. THE LEARNED COMMISSIONER HAS FIL ED A COPY OF THE SAID TRIBUNAL ORDER BEFORE US. 4. SHRI S. SRIDHAR, THE LEARNED COUNSEL APPEARING F OR THE ASSESSEE, ON THE OTHER HAND, SUBMITTED THAT SIMILAR ISSUES WERE CONSIDERED AND DECIDED BY VERY SAME MADRAS TRIBUNAL IN THE ITA 1594/08 :- 3 -: CASE OF M/S. V.D.SWAMY AND CO. LTD. IN ITA NO.252/M DS/95 DATED 23.2.2004 WHICH SHOULD HAVE BEEN FOLLOWED BY THE TRIBUNAL WHILE DECIDING THE ISSUES FOR THE ASSESSMENT YEAR 2 001-02. HE EXPLAINED THAT THE ORDER OF THE TRIBUNAL RELATING T O THE ASSESSMENT YEAR 2001-02, RELIED ON BY THE LEARNED COMMISSIONER OF INCOME- TAX, HAS NOT CONSIDERED THE ABOVE BINDING DECISION OF THE CO- ORDINATE BENCH DELIVERED IN THE CASE OF M/S. V.D.SW AMY AND CO. LTD. HE FURTHER CONTENDED THAT THE TRIBUNAL IN THE IR ORDER FOR THE ASSESSMENT YEAR 2001-02 HAS RELIED ON THE JUDGMENT OF THE HONBLE MADRAS HIGH COURT, TO HOLD AGAINST THE ASSE SSEE, RENDERED IN THE CASE OF CIT VS. M/S. CHIDAMBARANATH A MUDALIAR (240 ITR 552). THE FACTS AND CIRCUMSTANCES OF THE SAID CASE OF M/S. CHIDAMBARANATHA MUDALIAR ARE ENTIRELY DIFFEREN T FROM THE FACTS OF THE PRESENT CASE AND THE SAID DECISION OF THE HONBLE MADRAS HIGH COURT HAS BEEN REFERRED TO BY THE TRIBU NAL OUT OF CONTEXT. THE LEARNED COUNSEL ALSO RELIED ON THE DE CISION OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS. SR I VINAYAKA PICTURES (161 ITR 65) AND THE DECISION OF THE HONB LE GUJARAT HIGH COURT IN THE CASE OF VITHALDAS H. DANJIBAI BAR DHANWALA VS. CIT (130 ITR 94). HE, THEREFORE, SUBMITTED THAT T HE ISSUES MAY NOT BE DECIDED AGAINST THE ASSESSEE ONLY FOR THE RE ASON THAT THE ITA 1594/08 :- 4 -: TRIBUNAL HAS DECIDED THE ISSUES AGAINST THE ASSESSE E FOR THE EARLIER ASSESSMENT YEAR 2001-02. 5. WE HEARD BOTH SIDES IN DETAIL. THE VERY SAME IS SUES RAISED BY THE REVENUE IN THE PRESENT APPEAL HAVE ALSO BEEN RAISED FOR THE EARLIER ASSESSMENT YEAR 2001-02 IN ITA NO.1112 /MDS/2006. THE TRIBUNAL ALLOWED THE SAID APPEAL OF THE REVENUE THROUGH THEIR ORDER DATED 11.1.2008. THE TRIBUNAL HELD THA T THE ASSESSING OFFICER HAS RIGHTLY DISALLOWED THE CLAIM OF DEDUCTI ON MADE BY THE ASSESSEE AGAINST THE VALUE OF INVESTMENTS WRITTEN O FF. THE TRIBUNAL ALSO HELD THAT THE PRIOR PERIOD EXPENDITUR E HAS RIGHTLY BEEN DISALLOWED BY THE ASSESSING OFFICER. AS THE I SSUES ARE SQUARELY COVERED BY THE ORDER OF THE CO-ORDINATE BE NCH, WE ARE BOUND TO FOLLOW THE SAID ORDER, EVEN THOUGH, THE AS SESSEE MAY HAVE ITS OWN ARGUMENTS BASED ON DIFFERENT CASE LAWS . EVEN IF THE ARGUMENTS OF THE ASSESSEE CARRY MUCH CONVICTION, IT IS NOT WITHIN OUR JURISDICTION TO SIT UP IN JUDGMENT ON AN ORDER PASSED BY A CO- ORDINATE BENCH. SUCH JURISDICTION IS AVAILABLE ONL Y FOR THE HONBLE JURISDICTIONAL HIGH COURT. 6. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE F OLLOW THE EARLIER ORDER OF THE TRIBUNAL FOR THE ASSESSMENT YE AR 2001-02 AND ITA 1594/08 :- 5 -: HOLD THAT THE ASSESSING OFFICER HAS RIGHTLY DISALLO WED THE TWO CLAIMS AGITATED BY THE REVENUE IN THIS APPEAL. THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS) ON THESE ISSUES ARE SET ASIDE. 7. IN RESULT, THIS APPEAL FILED BY THE REVENUE IS A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON TUESDAY, THE 10 TH OF JULY, 2012 AT CHENNAI. SD/- SD/- (V.DURGA RAO) JUDICIAL MEMBER (DR. O.K.NARAYANAN) VICE-PRESIDENT CHENNAI, DATED THE 10 TH JULY, 2012 MPO* COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR 6. GF