ACIT Circle 1 , Tuticorin V. Diamond Shipping Agencies (P) Limited , Tuticorin

ITA 1693/CHNY/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5950 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2014-2015
• Appeal Filed On: 10-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS S VIJAYA PRABHA
• Assessee Lawyers: S SRINIRANJANI
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , D B ENCH, CHENNAI . , ! ' ! # . $ , % & BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY, JUDICIAL MEMBER ./ I.T.A.NO. 1693/MDS/2017 ( / ASSESSMENT YEAR: 2014-15) ASST. COMMISSIONER OF INCOME TAX, CIRCLE-1, TUTICORIN VS M/S. DIAMOND SHIPPING AGENCIES (P) LIMITED, DIAMOND HOUSE, A-4, WORLD TRADE AVENUE, HARBOUR ESTATE, TUTICORIN 628 004. PAN : AAACD6487H ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MRS. S. VIJAYAPRABHA, JCIT /RESPONDENT BY : MS. S. SRINIRANJANI, ADVOCATE /DATE OF HEARING : 13.09.2017 ! /DATE OF PRONOUNCEMENT : 16.10.2017 / O R D E R PER A. MOHAN ALANKAMONY, AM:- THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-1, MADURAI DATED 12.04.2017 IN ITA NO.019 6/2016-17 FOR THE ASSESSMENT YEAR 2014-15 PASSED U/S.250(6) R .W.S. 143(3) OF THE ACT. 2 ITA NO. 1693/MDS/201 7 2. THE REVENUE HAS RAISED SEVERAL GROUNDS IN ITS A PPEAL, HOWEVER THE CRUX OF THE ISSUE IS THAT THE LD.CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF DEDUCTION U/S.80IA(4) OF THE ACT WITH RESPECT TO THE BUSINESS ACTIVITY OF THE ASSESSEE BE ING DEVELOPER AND OPERATOR OF CONTAINER FREIGHT STATION BY RELYI NG ON THE DECISION OF THE HONBLE HIGH COURT. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A COMPANY, ENGAGED IN THE BUSINESS OF SHIPPING & TRAN SPORT, FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2014-1 5 ELECTRONICALLY ON 27.09.2014 ADMITTING NIL INCOME . THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND NOTICE U/S.143 (2) WAS ISSUED ON 28.08.2015. THEREAFTER THE ASSESSMENT WA S COMPLETED U/S.143(3) OF THE ACT, WHEREIN THE LD.AO DISALLOWED THE CLAIM OF DEDUCTION U/S.80IA OF THE ACT, IN RESPECT OF THE BU SINESS OF DEVELOPING AND OPERATING CONTAINER FREIGHT STATION. WHILE DOING SO, THE LD.AO OPINED THAT THE DECISION OF THE HONB LE HIGH COURT IN THE CASE OF A.L. LOGISTICS WAS NOT ACCEPTABLE TO THE INCOME TAX DEPARTMENT SINCE THE DEPARTMENT HAS FILED APPEAL BE FORE THE HONBLE APEX COURT. 3 ITA NO. 1693/MDS/201 7 4. HOWEVER ON APPEAL, THE LD.CIT(A) ALLOWED THE CLA IM OF THE ASSESSEE BY OBSERVING AS UNDER:- I HAVE CONSIDERED THE SUBMISSIONS OF THE REPRESENT ATIVE. AS FAR AS THE DEDUCTION U/S.80IA IS CONCERNED, I ACCEP T THE PLEA OF THE REPRESENTATIVE THAT THIS ISSUE IS COVERED BY MY APPELLATE ORDERS FOR ASSESSMENT YEARS 2012-13 AND 2013-14 WHI CH HAVE BEEN CONFIRMED BY THE HON'BLE ITAT. REGARDING THE B INDING DECISION OF THE JURISDICTION HIGH COURT, I FIND THA T THERE IS MERIT IN THE CLAIM OF THE APPELLANT THAT THE ASSESS ING OFFICER IS BOUND TO FOLLOW THE JURISDICTIONAL HIGH COURT DECIS ION EVEN IF THE SAME IS NOT ACCEPTED BY THE DEPARTMENT AND FURT HER APPEAL IS PENDING. THE BOARD HAS ISSUED INSTRUCTIONS THAT THE ASSESSING OFFICERS HAVE TO FOLLOW THE DECISION OF T HE JURISDICTIONAL HIGH COURT AND NOTE DOWN SUCH CASES SEPARATELY SO THAT WHENEVER THE JURISDICTIONAL HIGH COURT'S DE CISION IS REVERSED BY THE HON'BLE APEX COURT, REMEDIAL ACTION IS TO BE TAKEN. THE ASSESSING OFFICER IS NOT JUSTIFIED IN RE FUSING TO FOLLOW THE DECISION OF THE JURISDICTIONAL HIGH COUR T MERELY BECAUSE THE APPEAL IS PENDING BEFORE THE APEX COURT . THE ACTION OF THE ASSESSING OFFICER IS AGAINST THE INST RUCTIONS ISSUED BY THE BOARD. IN VIEW OF THE ABOVE, I DIRECT THE ASSESSING OFFICER TO ALLOW DEDUCTION U/S.801A. THE ASSESSING OFFICER SHALL TAKE INTO ACCOUNT THE DISALLOWANCES/A DDITIONS IF ANY, WHICH SHALL HAVE THE EFFECT OF ENHANCEMENT OF DEDUCTION U/S.801A. 5. AT THE OUTSET, WE FIND MERIT IN THE ORDER OF THE LD.CIT(A). THE ISSUE HAS BEEN HELD IN FAVOUR OF THE ASSESSEE B Y THE HONBLE JURISDICTION MADRAS HIGH COURT. IT IS PERTINENT TO MENTION THAT ALL THE LOWER JUDICIARY HAS TO NECESSARILY FOLLOW THE D ECISION OF THE ORDER OF THE HONBLE JURISDICTIONAL HIGH COURT, WHI CH THE LD.CIT(A) 4 ITA NO. 1693/MDS/201 7 HAS ADHERED TO. THEREFORE WE DO NOT FIND ANY INFIR MITY IN THE DECISION OF THE LD.CIT(A). HENCE WE HEREBY UPHOLD THE SAME. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED ON THE 16 TH OCTOBER, 2017 AT CHENNAI. SD/- SD/- ( ! ' ! # . $ ) ( . ) ( DUVVURU RL REDDY ) ( A . MOHAN ALANKAMONY ) ' #$ /JUDICIAL MEMBER #$ / ACCOUNTANT MEMBER %' /CHENNAI, &# /DATED 16 TH OCTOBER, 2017 RSR # () *) /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. - ( )/CIT(A) 4. - /CIT 5. )./ 0 /DR 6. /1 /GF