DCIT, Circle 1(1), Pune V. Chordia Food Products Ltd., Pune

ITA 1637/PUN/2013

• Counselvise Citation: 163724514 RSA 2013
• Duration Of Justice: 11 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 29-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P S NAIK
• Assessee Lawyers: MA HENDRA MOHIT

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI G.S. PANNU, ACCOUNTANT MEMBER ITA NOS.1637 & 1638/PN/2013 (A.YS: 2008-09 & 2010-11) DY.CIT, CIRCLE 1(1), PUNE APPELLANT VS. CHORDIA FOOD PRODUCTS LTD., 48A, PARVATI INDUSTRIAL ESTATE, PUNE-SATARA ROAD, DIST. PUNE PAN: AAACC7421J RESPONDENT APPELLANT BY : SHRI P.S. NA IK RESPONDENT BY : S/SHRI MA HENDRA MOHIT & BHARAT SHAH DATE OF HEARING: 21.08.2014 DATE OF ORDER : 25.08.2014 ORDER PER SHAILENDRA KUMAR YADAV, J.M: BOTH THE APPEALS PERTAIN TO THE SAME ASSESSEE FILE D BY THE REVENUE AGAINST THE CONSOLIDATED ORDER OF COMMISSIO NER OF INCOME TAX (APPEAL)-I, PUNE, DATED 12.06.2013 FOR A .YS. 2008-09 AND 2010-11. 2. IN ITA NO.1637/PN/2013 FOR A.Y. 2008-09, THE REV ENUE HAS FILED THE APPEAL ON THE FOLLOWING GROUNDS. 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS CONTRARY TO LAW AND TO THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) GROSSLY ERRED IN ALLOWING THE ASSESSEE'S CLAIM OF D EDUCTION OF RS.11,64,198/- U/S. 80-IA(4) OF THE INCOME-TAX ACT, 1961, BEING THE ALLEGED PROFIT OF THE INDUSTRIAL UNDERTAK ING ENGAGED IN GENERATION / DISTRIBUTION OF POWER FROM WIND- MILL, WITHOUT APPRECIATING THAT ON A PROPER APPLICA TION OF SECTION 80-IA(5), THERE IS NO PROFIT FROM THE AFORE SAID 2 ITA NOS.1637 & 1638/PN/13 CHORDIA FOOD PRODUCTS LTD UNDERTAKING AND, THEREFORE, THE ASSESSING OFFICER H AD CORRECTLY HELD THAT THE ASSESSEE WAS NOT ELIGIBLE F OR ANY DEDUCTION U/S.80-IA OF THE INCOME-TAX ACT, 1961. 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) GROSSLY ERRED IN ALLOWING THE ASSESSEE'S CLAIM BY MAKING AN ERRONEOUS INTERPRETATION OF SUB SECTION (5) OF S ECTION 80- IA AND ACCORDINGLY IN HOLDING THAT 'INITIAL ASSESSM ENT YEAR' FOR THE PURPOSE OF SECTION 80-IA(5) R.W.S. 80 -IA(2) IS THE FIRST YEAR IN WHICH THE ASSESSEE STARTED GENERA TING ELECTRICITY. 4. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) GROSSLY ERRED IN FAILING TO APPRECIATE THAT THERE I S NOTHING IN SUB-SECTION (5) OF SECTION 80-IA WHICH PERMITS SU CH AN INTERPRETATION THEREOF AND, FURTHER, THAT IN VIEW O F THE UNAMBIGUOUS WORDS USED IN THE SUB-SECTION (5), 'INI TIAL ASSESSMENT YEAR' CAN ONLY MEAN THE ASSESSMENT YEA R IN WHICH THE UNDERTAKING COMMENCES GENERATION OF POWER . 5. HAVING ACKNOWLEDGED THAT THE ABOVE STATUTORY POSITI ON AS REGARDS THE MEANING AND SCOPE OF SUB-SECTION (5) OF SECTION 80-IA HAS AUTHORITATIVE SUPPORT FROM THE DE CISION OF THE ITAT, BENCH MUMBAI IN THE CASE OF HERCULES HOIS TS LTD. VS. ACIT, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) GROSSLY ERRED IN NOT FOLLOWING THE SAID D ECISION AND INSTEAD IN FOLLOWING THE DECISION OF THE HON'BLE IT AT, PUNE IN THE ASSESSEE'S OWN CASE FOR THE A.Y. 2007-08 (IN ITA NO. 478/PN/2011 DATED 26.06.2012). 6. THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) GROSSLY ERRED IN FOLLOWING THE AFORE-CITED DECISI ON OF THE HON'BLE ITAT, PUNE, IN THE ASSESSEE'S OWN CASE FOR THE A.Y. 2007-08 EVEN WHILE OBSERVING THAT THE JUDGEMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF THANE ELEC TRICITY SUPPLY LTD. HAS NOT BEEN CONSIDERED IN THE SAID DEC ISION. 7. FOR THESE AND SUCH OTHER GROUNDS AS MAY BE URGED AT THE TIME OF THE HEARING, THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) MAY BE VACATED AND THAT OF THE ASSESSING OFFICER BE RESTORED. 8. THE APPELLANT CRAVES LEAVE TO ADD, ALTER AMEND ANY OF THE GROUNDS OF APPEAL DURING THE COURSE OF THE APPE LLATE PROCEEDINGS BEFORE THE HON'BLE TRIBUNAL. 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MAKIN G PICKLES, KETCHUP AND SPICES. IN THE YEAR 2001, THE ASSESSEE INSTALLED A WINDMILL. AS PER THE OPTION AVAILABLE U/S.80IA(2), THE ASSESSEE 3 ITA NOS.1637 & 1638/PN/13 CHORDIA FOOD PRODUCTS LTD CLAIMED THE INITIAL YEAR AS ASSESSMENT YEAR 2007-08 FOR THE PURPOSE OF CLAIMING DEDUCTION U/S.80IA(4) OF THE AC T. FOR THE IMPUGNED ASSESSMENT YEAR NOTICE U/S.148 OF THE ACT WAS ISSUED. THE REOPENED ASSESSMENT WAS COMPLETED BY THE ASSESS ING OFFICER DENYING THE CLAIM OF DEDUCTION U/S. 80IA(4) ON THE GROUND THAT THE INITIAL YEAR HAS TO BE TAKEN AS ASSESSMENT YEAR 2002-03 I.E. THE YEAR IN WHICH THE WINDMILL WAS INSTALLED AND MA DE OPERATIONAL. THE ASSESSING OFFICER RELIED ON THE P ROVISIONS OF SECTION 80IA(2) AND 80IA(5) OF THE ACT AND CONFLICT ING JUDICIAL OPINION ON THE SUBJECT TO ARRIVE AT HIS CONCLUSION. 2.1 THE MATTER WAS CARRIED BEFORE FIRST APPELLATE A UTHORITY, WHEREIN THE VARIOUS CONTENTIONS WERE RAISED ON BEHA LF OF THE ASSESSEE AND HAVING CONSIDERED THE SAME, THE CIT(A) HAS GRANTED RELIEF TO THE ASSESSEE. THE SAME HAS BEEN OPPOSED BEFORE US ON BEHALF OF THE REVENUE, INTER ALIA, SUBMITTED THAT T HE CIT(A) ERRED IN ALLOWING THE ASSESSEE'S CLAIM OF DEDUCTION OF RS .11,64,198/- U/S. 80-IA(4) OF THE INCOME-TAX ACT, 1961, BEING TH E ALLEGED PROFIT OF THE INDUSTRIAL UNDERTAKING ENGAGED IN GENERATION / DISTRIBUTION OF POWER FROM WIND-MILL, WITHOUT APPRE CIATING THAT ON A PROPER APPLICATION OF SECTION 80-IA(5), THERE WAS NO PROFIT FROM THE AFORESAID UNDERTAKING AND, THEREFORE, THE ASSESSING OFFICER HAD CORRECTLY HELD THAT THE ASSESSEE WAS NO T ELIGIBLE FOR ANY DEDUCTION U/S.80-IA OF THE INCOME-TAX ACT, 1961 . SO, THE ORDER OF CIT(A) BE SET ASIDE AND THAT OF ASSESSING OFFICER BE RESTORED. ON THE OTHER HAND, THE LEARNED AUTHORIZE D REPRESENTATIVE HAS SUBMITTED THAT THE ISSUE CAME UP BEFORE THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO.478/PN/11 FOR A.Y. 2007-08, WHEREIN, THE TRIBUNAL HELD AS UNDER: 11. WE HAVE CAREFULLY CONSIDERED THE SAID ASPECT A ND FIND THAT SIMILAR ARGUMENT HAS ALREADY BEEN DEALT WITH B Y OUR CO-ORDINATE BENCH IN THE CASE OF SERUM INTERNATIONA L LTD. (SUPRA). THE TRIBUNAL WAS SEIZED OF THE DIVERGENT V IEWS, NAMELY, ONE IN FAVOUR OF THE ASSESSEE, I.E. THE JUD GMENT OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF 4 ITA NOS.1637 & 1638/PN/13 CHORDIA FOOD PRODUCTS LTD VELAYUDHASWAMY SPINNING MILLS (P) LTD. AND OTHER OF SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF GOLDMI NE SHARES & FINANCE (P) LTD (SUPRA) WHICH WAS IN FAVOU R OF THE REVENUE. THE TRIBUNAL IN ITS DECISION HAS EXPLAINED THE REASONS WHICH PREVAILED UPON IT TO FOLLOW THE JUDGM ENT OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF VELAYUDHASWAMY SPINNING MILLS (P) LTD. (SUPRA) IN PREFERENCE TO THE CONTRA VIEW EXPRESSED BY THE SPEC IAL BENCH OF THE TRIBUNAL IN THE CASE OF GOLDMINE SHARE S & FINANCE (P) LTD. (SUPRA). IN SO FAR AS THE PLEA OF THE LEARNED DEPARTMENTAL REPRESENTATIVE THAT THE JUDGMENT OF TH E NON- JURISDICTIONAL HIGH COURT IS NOT BINDING ON THE TRI BUNAL IS CONCERNED, THE SAME, IN OUR VIEW, IS NOT A PROPOSIT ION TO BE EXAMINED IN ABSOLUTE TERMS. NO DOUBT THE DECISION O F A NON- JURISDICTIONAL HIGH COURT WOULD NOT HAVE A BINDING PRECEDENT ON THE TRIBUNAL ACTING IN A PLACE OTHER T HAN THE JURISDICTION OF SUCH HIGH COURT, SO HOWEVER, IT IS AN EQUALLY RESPECTED PRACTICE THAT AN AUTHORITY LIKE AN INCOME -TAX APPELLATE TRIBUNAL ACTING ANYWHERE IN THE COUNTRY H AS TO RESPECT THE LAW LAID DOWN BY ANY HIGH COURT ON AN I SSUE SETTLED, SO LONG THERE IS NO CONTRARY DECISION OF A NY OTHER HIGH COURT ON THAT ISSUE. FOR SUCH PROPOSITION, WE MAY ALSO MAKE A GAINFUL REFERENCE TO THE DECISION OF THE HON BLE BOMBAY HIGH COURT IN THE CASE OF CIT V SMT GODAVARI DEVI SARAF 113 ITR 589 (BOM) AS WELL AS THE RECENT DECIS ION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF COMMISSIONER OF CENTRAL EXCISE V. M/S VALSON DYEING , BLEACHING AND PRINTING WORKS, 2010 TIOL 710 HC MUM CX. THEREFORE, IN OUR VIEW THE DECISION OF TH E HONBLE MADRAS HIGH COURT IS LIABLE TO BE PREFERRED IN LIEU OF SPECIAL BENCH OF THE TRIBUNAL, CONSIDERING THE JUDI CIAL DISCIPLINE. EVEN OTHERWISE, WE MAY OBSERVE THAT THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL WAS VERY MUCH CONSIDERED BY THE HONBLE MADRAS HIGH COURT IN ITS JUDGMENT. NOTABLY IN THE CASE BEFORE THE HONBLE M ADRAS HIGH COURT, THE TRIBUNAL HAD DECIDED THE ISSUE IN F AVOUR OF THE REVENUE BY FOLLOWING THE DECISION OF THE SPECIA L BENCH IN THE CASE OF GOLDMINE SHARES & FINANCE (P) LTD ( SUPRA) AS IS EVIDENT FROM THE DISCUSSION IN PARA 4.1 OF THE J UDGMENT OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF VELAYUDHASWAMY SPINNING MILLS (P) LTD. (SUPRA). THE REFORE, CONSIDERING THE AFORESAID ASPECTS, WE FIND THAT THE ISSUE IN QUESTION IS LIABLE TO BE DECIDED IN FAVOUR OF THE A SSESSEE FOLLOWING THE JUDGMENT OF THE HONBLE MADRAS HIGH C OURT IN THE CASE OF VELAYUDHASWAMY SPINNING MILLS (P) LTD. (SUPRA), ESPECIALLY CONSIDERING THAT NO DECISION OF ANY OTHE R HIGH COURT TO THE CONTRARY HAS BEEN BROUGHT TO OUR NOTIC E. IN THIS VIEW OF THE MATTER, WE SET-ASIDE THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) AND DIRECT THE 5 ITA NOS.1637 & 1638/PN/13 CHORDIA FOOD PRODUCTS LTD ASSESSING OFFICER TO GRANT DEDUCTION UNDER SECTION 80-IA OF THE ACT AS CLAIMED BY THE ASSESSEE. AS A RESULT, TH E ASSESSEE SUCCEEDS IN ITS GROUND OF APPEAL. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. 2.2 NOTHING CONTRARY HAS BEEN BROUGHT TO OUR KNOWLE DGE ON BEHALF OF THE REVENUE. FACTS BEING SIMILAR, SO FOL LOWING THE SAME REASONING, WE ARE NOT INCLINED TO INTERFERE WITH TH E FINDING OF CIT(A) WHO HAS ALLOWED THE ASSESSEES CLAIM OF RS.1 1,64,198/- U/S.80IA(4) OF THE ACT . WE UPHOLD THE SAME. 2.3 A SIMILAR ISSUE AROSE IN ITA NO.1638/PN/2013 FO R A.Y. 2010-11. FACTS BEING SIMILAR, SO FOLLOWING THE SAM E REASONING, WE ARE NOT INCLINED TO INTERFERE WITH THE FINDING O F CIT(A) WHO HAS ALLOWED THE ASSESSEES CLAIM OF RS.13,67,729/- U/S. 80IA(4) OF THE ACT . WE UPHOLD THE SAME. 3. IN THE RESULT, BOTH THE APPEALS FILED BY THE REV ENUE ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS THE 25 TH DAY OF AUGUST, 2014. SD/- SD/- (G.S. PANNU) (SHAILENDRA KUMAR YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 25 TH AUGUST, 2014 GCVSR COPY TO:- 1) DEPARTMENT 2) ASSESSEE 3) THE CIT(A)-I, PUNE 4) THE CIT-I, PUNE 5) THE DR, B BENCH, I.T.A.T., PUNE. 6) GUARD FILE BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T., PUNE