DCIT, Tiruppur V. K.Indira, Tiruppur

ITA 1637/CHNY/2014

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7115 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 26-08-2014
• Assessment Year: 2010-2011
• Appeal Filed On: 10-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C V PAVANA KUMAR IRS
• Assessee Lawyers: N VIJAY KUMAR
• Keywords: Depreciation; Unabsorbed depreciation
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . , . . ! , '# BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER& SHRI S.S. GODARA, JUDICIAL MEMBER ./ I.T.A. NO.1637/MDS/2014 ( / ASSESSMENT YEAR : 2010-2011) THE DEPUTY COMMISSIONER OF INCOME TAX, COMPANY CIRCLE, TIRUPUR. ( $% /APPELLANT) VS SMT. K. INDIRA, NO.207/86, KARUVAMPALAYAM, MANGALAM ROAD, TIRUPUR 641 602 [PAN :AAEPI7557A] ( &'$% /RESPONDENT) / APPELLANT BY : SHRI. C.V. PAVANA KUMAR, IRS, JCIT. / RESPONDENT BY : SHRI. N. VIJAYKUMAR, C.A., /DATE OF HEARING : 26.08.2014. ! /DATE OF PRONOUNCEMENT : 27.08.2014 ( / O R D E R PER S.S.GODARA, JUDICIAL MEMBER THIS REVENUES APPEAL FOR ASSESSMENT YEAR 2010-11; EMANATES FROM ORDER DATED 27.03.2014 PASSED BY THE COMMISSIONER OF I.T.A.NO.1637 /MDS/2014 . :- 2 -: INCOME TAX (APPEALS)-II, CHENNAI IN ITA NO.78/2012- 13 IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT 1961 [IN SHORT THE ACT]. 2. THE REVENUES SOLE SUBSTANTIVE GROUND IN THE PRESEN T APPEAL CHALLENGES THE CIT(A) ORDER DELETING DISALLOWANCE O F DEDUCTION U/S. 80IA OF THE ACT AMOUNTING TO ` .99,11,499/- MADE IN THE ASSESSMENT ORDER DATED 30.11.2012. 3. THE ASSESSEE IS AN INDIVIDUAL. SHE IS HAVING SAL ARY AND INTEREST INCOME. THE ASSESSEE HAD FILED HER RETURN ON 19. 09.2010 ADMITTING INCOME OF ` .87,93,210/-. SHE HAD CLAIMED U/S. 80IA DEDUCTION OF ` .99,11,499/- QUA INCOME DERIVED FROM WIND TURBINE G ENERATED ELECTRICITY AND SOLD TO THE TAMIL NADU ELECTRICITY BOARD. THE ASSESSEE HAD INSTALLED THESE WIND TURBINE GENERATORS IN FINA NCIAL YEARS 2003-04 AND 2005-06. SHE HAD BEEN CLAIMING U/S. 80IA DEDU CTION FROM ASSESSMENT YEARS 2006-07 AND 2008-09 AFTER TREATING ASSESSMENT YEAR 2006-07 AS THE INITIAL ASSESSMENT YEAR. THE ASSES SEE HAD SETOFF UNABSORBED DEPRECIATION AND BUSINESS LOSS PERTAININ G TO FINANCIAL YEARS 2003-04, 2004-05, 2005-06, 2006-07 AND 2007-08 AGAI NST THE INCOME FROM OTHER SOURCES. THE ASSESSING OFFICER DISALLOW ED HER DEDUCTION I.T.A.NO.1637 /MDS/2014 . :- 3 -: BY QUOTING SECTION 80IA (5) OF THE ACT. HE HELD IN THE ASSESSMENT ORDER THAT THE RELEVANT UNDERTAKING/ENTERPRISE SHOU LD BE SOLE BUSINESS AND PROFIT AND LOSS HAS TO BE REWORKED. THE ASSESS ING OFFICER OBSERVED THAT THE AFORESAID LOSS AND UNABSORBED DEP RECIATION SET-OFF WOULD BE NOTIONALLY BROUGHT FORWARD AND SET OFF AGA INST INCOME DERIVED FROM WINDMILLS RESULTING IN NO POSITIVE INC OME FOR SEEKING 80IA DEDUCTION. THE ASSESSEE QUOTED CASE LAW OF CIT VS. VELAYUDASWAMY SPINNING MILLS (P) LTD 340 ITR 477 THAT BUSINESS LOSS AND UNABSORBED DEPRECIATION ALREADY SET-OFF NEED NOT BE NOTIONALLY BROUGHT FORWARD AND SET-OFF ONCE AGAIN. THE ASSESSING OFFICER CONC LUDED THAT REVENUES SPECIAL LEAVE PETITION AGAINST THE AFORES AID CASE LAW IS PENDING. HE ORDERED THAT THE IMPUGNED DISALLOWANCE BE KEPT IN ABEYANCE TILL THE DECISION OF THE HONBLE SUPREME C OURT. 4. THE ASSESSEE PREFERRED AN APPEAL. THE CIT(A) HAS D ELETED THE DISALLOWANCE BY FOLLOWING THE ABOVE SAID DECISION O F THE HONBLE JURISDICTIONAL HIGH COURT. THEREFORE, THE REVENUE IS IN APPEAL. 5. WE HAVE HEARD BOTH PARTIES AND PERUSED THE CASE FILE. THE I.T.A.NO.1637 /MDS/2014 . :- 4 -: ISSUE INVOLVED IS IN A VERY NARROW COMPASS. THE AS SESSEE HAD SET-OFF UNABSORBED DEPRECATION AND BUSINESS LOSS AGAINST FR OM INCOME FROM OTHER SOURCES IN PRECEDING ASSESSMENT YEARS. THE A SSESSING OFFICER HOLDS THAT THE VERY DEPRECIATION AND LOSSES HAVE T O BE AGAIN NOTIONALLY CARRIED FORWARD AND BE ADJUSTED FROM INCOME DERIVED FROM SECTION 80IA UNDERTAKING. WE FIND HONBLE JURISDICTIONAL HIGH COURT (SUPRA) HAS HELD THAT SUCH A DEPRECIATION AND LOSSES ALREA DY SET-OFF NEED NOT TO BE NOTIONALLY BROUGHT FORWARD. THERE IS NO DISTI NCTION ON FACTS OR LAW IS POINTED OUT. IN THESE CIRCUMSTANCES, WE HOLD TH AT THE CIT(A) HAS RIGHTLY DELETED THE IMPUGNED DISALLOWANCE OF DEDUCT ION U/S. 80IA. THE REVENUES GROUNDS ARE REJECTED. 6. THE REVENUE APPEAL IS DISMISSED. ORDER PRONOUNCED ON WEDNESDAY, THE 27 TH OF AUGUST, 2014 AT CHENNAI. SD/- SD/- ( . ) (A.MOHAN ALANKAMONY) / ACCOUNTANT MEMBER ( . . ! ) (S.S. GODARA) ' / JUDICIAL MEMBER '# /DATED:27.08.2014. K.V #$ %& '& /COPY TO: 1. ( APPELLANT 2. / RESPONDENT 3. ) ( )/CIT(A) 4. ) /CIT 5. &*+ , /DR 6. +- . /GF. I.T.A.NO.1637 /MDS/2014 . :- 5 -: