ACIT, Ooty V. Marudhamalai Sri Dhandapani Spinning Mills, Coimbatore

ITA 1616/CHNY/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8109 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-11-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 01-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V NANDA KUMAR
• Assessee Lawyers: T VASUDEVAN
• Keywords: Reasonable cause
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , B B ENCH, CHENNAI . . . , . , & BEFORE SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.1616/MDS/2016 ( / ASSESSMENT YEAR: 2012-13) THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-1, OOTY. VS M/S. MARUDHAMALAI SRI DHANDAPANI SPINNING MILLS, 142B, BETTATHAPURAM PUDUR KARAMADAI, COIMBATORE-641 104. ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. V.NANDAKUMAR, JCIT /RESPONDENT BY : MR. T.VASUDEVAN, ADVOCATE /DATE OF HEARING : 17 TH AUGUST,2016 /DATE OF PRONOUNCEMENT : 9 TH NOVEMBER, 2016 / O R D E R PER A. MOHAN ALANKAMONY, AM: THIS APPEAL IS FILED BY THE REVENUE AGGRIEVED BY T HE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS)- 3, COIMBATORE, DATED 29.02.2016 IN ITA. NO.573/14-1 5 PASSED UNDER SECTION 143(3) R.W.S. 250(6) OF THE AC T. 2. THE REVENUE HAS RAISED SEVERAL GROUNDS IN ITS AP PEAL, HOWEVER, THE CRUX OF THE ISSUE IS AS FOLLOWS:- THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN ALLOWING THE CLAIM OF DEDUCTION MADE BY THE ASSESSEE AMOUNTING TO ` 37,26,120/- UNDER SECTION 80IA OF THE ACT FOLLOWING THE DECISION OF THE HONBLE JURISDICTIONA L 2 ITA NO.1616/MDS/2016 HIGH COURT IN THE CASE OF CIT VS.VELAYUTHASAMY SPINNING MILLS LTD. 3. THE APPEAL FILED BY THE REVENUE IS BARRED BY LIM ITATION OF 4 DAYS. THE REVENUE FILED AN AFFIDAVIT EXPLAININ G THE REASON FOR THE DELAY IN FILING THE APPEAL STATING T HAT THE RECORDS OF THE ASSESSEE COULD NOT BE LOCATED IMMEDI ATELY AS THE SAME WAS MISPLACED AND THEREFORE PRAYED FOR CONDONATION OF DELAY. CONSIDERING THE SUBMISSIONS O F THE REVENUE, WE ARE SATISFIED THAT THERE WAS REASONABLE CAUSE FOR THE DELAY IN FILING THE APPEAL. HENCE IN THE IN TEREST OF JUSTICE, WE HEREBY CONDONE THE DELAY IN FILING THE APPEAL AND ADMIT THE SAME FOR ADJUDICATION. 4. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A FIRM ENGAGED IN THE BUSINESS OF MANUFACTURING OF YARN FI LED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2012-13 ON 26.09.2012 DECLARING LOSS OF ` 29,96,963/-. THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE UNDER SECTION 143( 2) WAS ISSUED TO THE ASSESSEE ON 16.08.2013. SUBSEQUENTLY, THE ASSESSMENT WAS COMPLETED BY THE LEARNED ASSESSING O FFICER UNDER SECTION 143(3) OF THE ACT ON 11.02.2015 WHERE IN HE 3 ITA NO.1616/MDS/2016 MADE CERTAIN DISALLOWANCES AMONGST WHICH ONE OF THE DISALLOWANCE WAS ` 37,26,120/- BEING THE DEDUCTION CLAIMED UNDER SECTION 80IA OF THE ACT TOWARDS INCOME GENERA TED FROM THE WINDMILL. DURING THE COURSE OF ASSESSMENT PROCE EDINGS, IT WAS NOTICED BY THE LEARNED ASSESSING OFFICER THAT T HE ASSESSEE HAS CLAIMED DEDUCTION OF RS.37,26,120/- UN DER SECTION 80IA OF THE ACT TOWARDS THE INCOME GENERATE D FROM WIND MILL RELYING IN THE DECISION OF THE HONBLE J URISDICTIONAL HIGH COURT IN THE CASE OF SRI VELAYUDHASAMY SPINNIN G MILLS PVT.LTD. REPORTED 231 CTR 368. HOWEVER, THE LEARNE D ASSESSING OFFICER WAS OF THE VIEW THAT THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT HAS NOT BECOME FI NAL AS THE DEPARTMENT HAD FILED SLP BEFORE THE HONBLE SUPREME COURT WHICH IS PENDING FOR DECISION. THEREFORE HE DISALLO WED THE CLAIM OF DEDUCTION UNDER SECTION 80IA OF THE ACT T O KEEP THE MATTER ALIVE. 5. ON APPEAL, THE LEARNED COMMISSIONER OF INCOME T AX (APPEALS) ALLOWED THE DEDUCTION OF RS.37,26,120 /- CLAIMED BY THE ASSESSEE UNDER SECTION 80IA OF THE ACT IN V IEW OF THE BINDING DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE 4 ITA NO.1616/MDS/2016 CASE OF CIT VS.SRI VELAYUTHASAMY SPINNING MILLS LTD ., CITED SUPRA. 6. BEFORE US, THE LEARNED DEPARTMENTAL REPRESENTATI VE ARGUED IN SUPPORT OF THE ORDER OF THE LEARNED ASSES SING OFFICER WHILE AS THE LEARNED AUTHORIZED REPRESENTAT IVE ARGUED IN SUPPORT OF THE ORDER OF THE LEARNED COMMI SSIONER OF INCOME TAX (APPEALS) BY RELYING ON THE DECISION OF THE HONBLE JURISDICTIONAL MADRAS HIGH COURT IN THE CAS E OF SRI VELAYUDHASAMY SPINNING MILLS LTD., CITED SUPRA. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND CAREFULL Y PERUSED THE MATERIAL ON RECORD. FROM THE FACTS OF T HE CASE, WE ARE OF THE CONSIDERED VIEW THAT THE LEARNED COMM ISSIONER OF INCOME TAX (APPEALS) HAS RIGHTLY FOLLOWED THE DE CISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE O F SRI VELAYUDHASAMY SPINNING MILLS PVT.LTD., CITED SUPRA AND THEREBY ALLOWED THE CLAIM OF DEDUCTION TO THE ASSES SEE UNDER SECTION 80IA OF THE ACT. FURTHER, IT IS NOT THE CA SE OF THE REVENUE THAT THE JUDGMENT OF THE HONBLE MADRAS HIG H COURT IN THE CASE VELAYUDHASAMY SPINNING MILLS P. LTD (SU RPA) IS 5 ITA NO.1616/MDS/2016 STAYED BY THE HONBLE APEX COURT. IT IS PERTINENT TO MENTION THAT IN THE ABSENCE OF ANY STAY GRANTED BY THE HON BLE APEX COURT AGAINST THE OPERATION OF THE JUDGMENT OF THE HONBLE MADRAS HIGH COURT, ALL THE LOWER JUDICIARIES AS WEL L AS QUASI JUDICIAL AUTHORITIES ARE BOUND TO FOLLOW THE DECISI ON OF THE HONBLE JURISDICTIONAL HIGH COURT. SINCE THE LEARNE D COMMISSIONER OF INCOME TAX (APPEALS) HAS RIGHTLY F OLLOWED THE DECISION OF THE HONBLE JURISDICTIONAL MADRAS H IGH COURT(SUPRA) AND HELD THE ISSUE IN FAVOUR OF THE AS SESSEE, WE DO NOT FIND IT NECESSARY TO INTERFERE WITH HIS ORD ER. THEREFORE WE HEREBY CONFIRM THE ORDER OF THE LEARNED COMMISSI ONER OF INCOME TAX (APPEALS). 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 9 TH NOVEMBER, 2016 SD/- SD/- ( . . . ) ( . ) (N.R.S.GANESAN) ( A.M OHAN ALANKAMONY ) # % / JUDICIAL MEMBER % / ACCOUNTANT MEMBER # /CHENNAI, ( /DATED 9 TH NOVEMBER, 2016 SOMU *+ ,+ /COPY TO: 1. APPELLANT 2. RESPONDENT 3. - () /CIT(A) 4. - /CIT 5. + 1 /DR 6. /GF .