DCIT, Tiruppur V. P.S.Velusamy, Tiruppur

ITA 1660/CHNY/2014

• Counselvise Citation: 166021714 RSA 2014
• Duration Of Justice: 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-09-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 11-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C V PAVANA KUMAR
• Assessee Lawyers: N VIJAY KUMAR
• Keywords: Business income; Depreciation; Unabsorbed depreciation
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : CHENNAI . , . . , ! ' [BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMB ER AND SHRI S. S. GODARA, JUDICIAL MEMBER] ./ I.T.A.NO.1660/MDS/2014 / ASSESSMENT YEAR : 2010-11 THE DY. COMMISSIONER OF INCOME-TAX COMPANY CIRCLE TIRUPUR VS. SHRI P.S. VELUSAMY 207/86, KARUVAMPALAYAM MANGALAM ROAD TIRUPUR 641 604 [PAN ABLPV 6651 Q ] ( #$ / APPELLANT) ( %&#$ /RESPONDENT) ./ I.T.A.NO.1662/MDS/2014 / ASSESSMENT YEAR : 2010-11 THE INCOME TAX OFFICER WARD I(4) TIRUPUR VS. M/S C.S.GARMENTS NO.42, KARUMARAMPALAYAM MANNARAI TIRUPUR 641 607 [PAN AACFC 0719 J] ( #$ / APPELLANT) ( %&#$ /RESPONDENT) ./ I.T.A.NO.1664/MDS/2014 / ASSESSMENT YEAR : 2010-11 THE DY. COMMISSIONER OF INCOME-TAX COMPANY CIRCLE TIRUPUR VS. M/S SPICTEX COTTON MILLS P. LTD NO.63, P.N. ROAD TIRUPUR 641 602 [PAN AADCS 8164 R ( #$ / APPELLANT) ( %&#$ /RESPONDENT) I.T.A.NOS.1660, 1662, 1664 TO 1669/14 :- 2 -: / APPELLANT BY : SHRI C.V. PAVANA KUMAR, JCIT /RESPONDENT BY : SHRI N. VIJAY KUMAR, CA ./ I.T.A.NO.1665/MDS/2014 / ASSESSMENT YEAR : 2010-11 THE DY. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE TIRUPUR VS. M/S SAKTHI MURUGAN AGRO FOODS LTD 19/2 COIMBATORE MAIN ROAD AVINASHI 641 654 [PAN AACCS 9473 J] ( #$ / APPELLANT) ( %&#$ /RESPONDENT) / APPELLANT BY : SHRI C.V. PAVANA KUMAR, JCIT /RESPONDENT BY : NONE ./ I.T.A.NO.1666/MDS/2014 / ASSESSMENT YEAR : 2010-11 THE DY. COMMISSIONER OF INCOME-TAX COMPANY CIRCLE TIRUPUR VS. M/S SRI GANAPATHY MURUGAN SPINNING MILLS P. LTD 83B, POWER HOUSE ROAD SOMANUR 641 668 [PAN AAECS 2342 C] ( #$ / APPELLANT) ( %&#$ /RESPONDENT) / APPELLANT BY : SHRI C.V. PAVANA KUMAR, JCIT /RESPONDENT BY : SHRI N. VIJAY KUMAR, CA ./ I.T.A.NO.1667/MDS/2014 / ASSESSMENT YEAR : 2010-11 THE DY. COMMISSIONER OF INCOME-TAX COMPANY CIRCLE TIRUPUR VS. M/S SUEERA ALLOYS GLOBAL P. LTD NO.315/2, KANDAMPALAYAM SEMBIYANALLUR AVINASHI 641 654 [PAN AAGCS 6735 B] ( #$ / APPELLANT) ( %&#$ /RESPONDENT) I.T.A.NOS.1660, 1662, 1664 TO 1669/14 :- 3 -: / APPELLANT BY : SHRI C.V. PAVANA KUMAR, JCIT /RESPONDENT BY : SHRI M.NARAYANAN, RETD. ADDL. CIT ./ I.T.A.NO.1668/MDS/2014 / ASSESSMENT YEAR : 2010-11 THE INCOME TAX OFFICER WARD I(6) TIRUPUR VS. M/S ANGALAKSHMI SPINNING MILLS 154/1, MATHAKADI THOTTAM PALLAPALAYAM TIRUPUR 641 103 [PAN AACFA 3911 G] ( #$ / APPELLANT) ( %&#$ /RESPONDENT) / APPELLANT BY : SHRI C.V. PAVANA KUMAR, JCIT /RESPONDENT BY : SHRI ARJUNARAJ, CA ./ I.T.A.NO.1669/MDS/2014 / ASSESSMENT YEAR : 2010-11 THE INCOME TAX OFFICER WARD I(4) TIRUPUR VS. M/S ANAND TEXTILES NO.527, AVINASHI ROAD TIRUPUR 641 603 [PAN AAHFA 5876 E ] ( #$ / APPELLANT) ( %&#$ /RESPONDENT) / APPELLANT BY : SHRI C.V. PAVANA KUMAR, JCIT /RESPONDENT BY : SHRI N. VIJAY KUMAR, CA / DATE OF HEARING : 15-09-2014 ! / DATE OF PRONOUNCEMENT : 19-09-2014 ' / O R D E R PER BENCH THESE REVENUES APPEALS FOR ASSESSMENT YEAR '#$#%$$ IN CASE OF DIFFERENT ASSESSES & ARE DIRECTED AGAINST SEPARATE ORDERS OF THE I.T.A.NOS.1660, 1662, 1664 TO 1669/14 :- 4 -: COMMISSIONER OF INCOME-TAX(APPEALS) COIMBATORE, DAT ED 27.3.2014, 21.3.2014, 27.3.2014, 27.3.2014, 24.3.2014, 24.3.20 14, 31.3.2014 AND 31.3.2014, RESPECTIVELY, IN PROCEEDINGS UNDER S ECTION 143(3) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT). 2. THE IDENTICAL GROUNDS RAISED IN ALL THESE APPEALS R EAD AS FOLLOWS: 1. THE ORDER OF THE LEARNED CLT(APPEALS)-II, COIMB ATORE IS AGAINST FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE LEARNED CLT(APPEALS)-II, COIMBATORE HAS ER RED IN HOLDING THAT THE ASSESSEE IS ENTITLED FOR DEDUCTION U/S-80L A. 3. THE LEARNED CLT(APPEALS)-II, COIMBATORE HAS ERRE D IN HOLDING THAT THE ASSESSMENT YEAR 2005-06 IS THE FIRST INITI AL ASSESSMENT YEAR IN WHICH THE ASSESSEE HAD CLAIMED THE DEDUCTIO N U/S-80LA, AND, THEREFORE THE DEPRECIATION OF EARLIER YEARS (W HICH ALREADY HAVE BEEN ABSORBED) CANNOT BE NOTIONALLY CARRIED FO RWARD AND CONSIDERED IN COMPUTING THE QUANTUM OF DEDUCTION U/ S-80LA. 4. THE LEARNED CLT(APPEALS)-II, COIMBATORE, SHOULD HAVE OBSERVED THAT AS PER THE PROVISIONS OF SECTION-80LA (2) AN ASSESSEE CAN OPT FOR DEDUCTION OF ANY TEN CONSECUTI VE YEARS OUT OF FIFTEEN YEARS, RECKONED FROM THE FIRST YEAR IN W HICH THE UNDERTAKING ENTERPRISE GENERATES POWER OR COMMENCES TRANSMISSION OR DISTRIBUTES POWER, ETC. 5. THE LEARNED CLT(APPEALS)-II, COIMBATORE, OUGHT TO HAVE APPRECIATED, THAT AS PER THE PROVISIONS OF THE SECT ION-80LA(5) THE ELIGIBLE UNDERTAKING SHOULD BE TREATED AS ONLY SOUR CE OF INCOME FOR COMPUTING THE QUANTUM OF DEDUCTION ALLOWABLE U/ S- 801A. 6. THE LEARNED CLT (APPEALS)-II, COIMBATORE, SHOU LD HAVE TAKEN NOTE OF THE FACT THAT THE SEC-80LA(5) BEGINS WITH A NON-OBSTANTE CLAUSE; AND, THEREFORE, THE RESTRICTION THEREIN, SH ALL PREVAIL IN COMPUTING AND ALLOWING THE DEDUCTION U/S-80LA. I.T.A.NOS.1660, 1662, 1664 TO 1669/14 :- 5 -: KEEPING IN MIND THE FACT THAT THE REVENUE HAS PLEAD ED THE IDENTICAL ISSUE OF DEDUCTION U/S 80IA OF THE ACT, WE TAKE UP I.T.A.NO.1660/MDS/2014 AS THE LEAD CASE. 3. THE ASSESSEE IS AN INDIVIDUAL. HE IS DERIVING I NCOME FROM SALARY, HOUSE PROPERTY, BUSINESS AND CAPITAL GAINS. THE ASSESSEE HAD FILED HIS RETURN ON 19.9.2010 DECLARING INCOME OF ` 3,10,06,150/- AND ALSO CLAIMED DEDUCTION U/S 80IA OF ` 1,06,20,988/-. HE WAS HAVING WIND TURBINE GENERATORS. ELECTRICITY PRODUCED THER EFROM WAS SOLD TO M/S TAMIL NADU ELECTRICITY BOARD. THE ASSESSEE H AD INSTALLED THESE WIND TURBINE GENERATORS IN ASSESSMENT YEAR 2004-05 AND STARTED CLAIMING DEDUCTION U/S 80IA IN ASSESSMENT YEAR 2006-07. HE HAD SET OFF UNABSORBED DEPRECIATION AND BUSINESS LOSSE S INCURRED DURING FINANCIAL YEARS 2003-04, 2004-05 AND 2005-06 AGAIN ST OTHER INCOMES. THEREAFTER, THIS CLAIM OF DEDUCTION HAD B EEN RAISED. THE ASSESSING OFFICER QUOTED SECTION 80IA(5), HELD THAT THE UNDERTAKING IN QUESTION SHOULD BE TREATED AS THE SOLE BUSINESS AND PROFIT AND LOSS ACCOUNT HAD TO BE WORKED OUT ACCORDINGLY. PER ASSE SSING OFFICER, THE BUSINESS LOSSES AND UNABSORBED DEPRECIATION ALREADY SET OFF AGAINST OTHER INCOMES HAD TO BE NOTIONALLY BROUGHT FORWARD AND SET OFF ONCE AGAIN. HE CONCLUDED THAT ONCE THIS COURSE OF ACTIO N IS ADOPTED, THE I.T.A.NOS.1660, 1662, 1664 TO 1669/14 :- 6 -: ASSESSEE DID NOT HAVE ANY POSITIVE INCOME TO CLAIM SECTION 80IA DEDUCTION. 4. THE ASSESSEE RELIED UPON CASE LAW OF CIT VS VELAYUD ASWAMY SPINNING MILLS P. LTD, 340 ITR 477 (MAD) HOLDING TH AT THE BUSINESS LOSSES AND UNABSORBED DEPRECIATION ALREADY SET OFF IN THE PAST AGAINST OTHER INCOMES NEED NOT BE NOTIONALLY BROUGHT FORWA RD AND SET OFF AGAINST THE INCOME FROM THE CONCERNED UNDERTAKING. THE ASSESSING OFFICER OBSERVED IN THE ASSESSMENT ORDER DATED 30.1 1.2012 THAT THE REVENUES SPECIAL LEAVE PETITION WAS PENDING BEFORE THE HON'BLE APEX COURT. HE DISALLOWED THE IMPUGNED DEDUCTION AND KE PT THE DEMAND IN ABEYANCE TILL THE DECISION OF THE HON'BLE SUPREM E COURT. THE ASSESSEES TOTAL INCOME WAS COMPUTED AS ` 4,16,27,138/-. 5. IN LOWER APPELLATE PROCEEDINGS, THE CIT(A) HAS FOLL OWED THE AFORESAID CASE LAW OF HON'BLE JURISDICTIONAL HIGH C OURT FOR DELETING THE DISALLOWANCE. THEREFORE, THE REVENUE IS IN APPEAL. 6. WE HAVE HEARD BOTH PARTIES AND PERUSED THE CASE FIL E. THE REVENUE DOES NOT POINT OUT ANY DISTINCTION QUA FACT S OF THE INSTANT CASE VIS--VIS THOSE INVOLVED BEFORE THE HON'BLE HI GH COURT. THEIR LORDSHIPS HAVE ALREADY HELD THAT UNABSORBED DEPRECI ATION AND BUSINESS I.T.A.NOS.1660, 1662, 1664 TO 1669/14 :- 7 -: LOSSES ALREADY SET OFF IN THE PRECEDING ASSESSMENT YEARS AGAINST OTHER INCOMES ARE NOT TO BE NOTIONALLY CARRIED FORWARD FO R SETTING OFF AGAINST THE BUSINESS INCOME IN QUESTION. THE REVENUES AR GUMENT THAT ITS SPECIAL LEAVE PETITION IS PENDING, IS NOT FOUND TO BE JUSTIFIABLE TO ADOPT A DIFFERENT APPROACH. THE ASSESSEE IS HELD ENTITLE D FOR DEDUCTION. WE AFFIRM THE CIT(A)S FINDINGS. THE REVENUES APPEAL I.T.A.NO.1660/MDS/2014 IS DIS MISSED 7. SAME ORDER TO FOLLOW IN ALL OTHER APPEAL S. 8. ALL THESE REVENUES APPEALS I.T.A.NOS.1660,1662,166 4 TO 1669/MDS/2014 ARE DISMISSED. ORDER PRONOUNCED ON FRIDAY, THE 19 TH OF SEPTEMBER, 2014, AT CHENNAI. SD/- SD/- ( . ) (A. MOHAN ALANKAMONY) / ACCOUNTANT MEMBER ( . . ) (S. S. GODARA) ! / JUDICIAL MEMBER '( / CHENNAI )* / DATED: 19 TH SEPTEMBER, 2014 RD *+ ,-.- / COPY TO: 1 . / APPELLANT 4. / / CIT 2. / RESPONDENT 5. -01 2 / DR 3. /34 / CIT(A) 6. 156 / GF