DCIT, Tiruppur V. P.Gowthami, Tiruppur

ITA 1706/CHNY/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8556 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2016
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 07-06-2016
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: N VIJAYAKUMAR
• Keywords: Depreciation; Condonation of delay; Unabsorbed depreciation
• Section: 143(3)

Judgement Text

, , IN THE INCOME - TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . . . , . , BEFORE SHRI N.R.S. GANESAN , JUDICIAL MEMBER & SHRI A. MOHAN ALANKAMONY , ACCOUNTANT MEMBER ./ I.T.A.NO. 170 6 /MDS/2016 / ASSESSMENT YEAR :20 13 - 14 THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 2, 121, SIXTY FEET ROAD, TIRUPUR 641 602. VS. SMT. P. GOWTHAMI, NO. 207/86, MANGALAM ROAD, KARUVAMPALAYAM, TIRUPUR 641 60 4 . [PAN: A FBPG3714R ] ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : SHRI A. V. SREEKANTH, JCIT / RESPONDENT BY : SHRI N. VIJAYA KUMAR, C.A. / DATE OF HEARING : 3 1 . 0 8 .201 6 / DATE OF P RONOUNCEMENT : 09 . 0 9 .201 6 / O R D E R PER A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER : THIS APPEAL IS FILED BY THE REVENUE, AGGRIEVED BY THE ORDER DATED 21.12.2015 OF THE LEARNED COMMISSIONER OF INCOME TAX (A) - 3, COIMBATORE PASSED UNDER SECTION - 143(3) OF THE INCOME TAX ACT, 1961 [ ACT IN SHORT] IN APPEAL NO.25 7 /15 - 16 FOR ASSESSMENT YEAR 2013 - 14. 2. THE APPEAL OF THE REVENUE IS FOUND TO HAVE BEEN FILED LATE BY 70 DAYS BEFORE THE TRIBUNAL . THE ASSESSING OFFICER HAS FILED AN AFFIDAVIT FOR I.T.A. NO. 1706 /M/ 1 6 2 CONDONATION OF DELAY BY STATING THAT HE WAS CONSTRAINED WITH TIME BARRING SCRUTINY ASSESSMENT AND WAS ALSO DEPUTED FOR ELECTION DUTY . T HE LD. DR , CITING THE REASONS STATED BY THE LD. ASSESSING OFFICER, REQUESTED FOR CONDO NING THE DELAY AND TO ADMIT THE APPEAL FOR HEARING. THE LD. COUNSEL FOR THE ASSESSEE DID NOT SERIOUSLY OBJECT TO THE SUBMISSIONS OF THE LD. DR. ACCORDINGLY, WE CONDONE THE DELAY OF 70 DAYS IN FILING THE APPEAL AND ADMIT THE APPEAL FOR HEARING. 3 . THE REV ENUE HAS RAISED FIVE GROUNDS IN ITS APPEAL, HOWEVER , THE CRUX OF THE ISSUE IS THAT THE REVENUE IS AGGRIEVED BY THE ORDER OF THE LD. CIT(A), WHO HAD ERRED IN ALLOWING DEDUCTION UNDER SECTION 80 - IA OF THE ACT. 3. 1 THE ASSESSEE IS AN INDIVIDUAL , ENGAGED I N THE BUSINESS OF POWER GENERATION THROUGH WIND ELECTRIC GENERATOR , FILED HER RETURN OF INCOME ON 30 . 0 7 .201 3 ADMITTING HER INCOME AS .7 , 08 , 95 0 / - AFTER CLAIMING DEDUCTION OF . 30 , 46 , 164 / - U NDER SECTION 80IA OF THE ACT. THE CASE WAS TAKEN FOR SCRUTINY THROU GH CASS AND ASSESSMENT U NDER SECTION 143(3) OF THE ACT WAS COMPLETED ON 29 .0 7 .201 5, WHEREIN , THE A SSESSING O FFICER DISALLOWED THE DEDUCTION UNDER SECTION 80 - IA OF THE ACT ON WINDMILLS. 3.2 DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS OBSERVED BY THE LD. ASSESSING OFFICER THAT THE ASSESSEE HAD CLAIMED THE DEDUCTION UNDER SECTION 80 - IA OF THE ACT RELYING UPON THE DECISION OF THE JURISDICTIONAL HIGH I.T.A. NO. 1706 /M/ 1 6 3 COURT IN THE CASE OF VELAYUDHASWAMY SPINNING MILLS (P) LTD VS. ACIT REPORTED IN 231 CTR (MAD) 368 [20 10]. HOWEVER THE A SSESSING O FFICER OPINED THAT SINCE THE REVENUE IS IN APPEAL AND THE MATTER IS PENDING BEFORE THE HON. APEX COURT, HE IS JUSTIFIED IN DISALLOWING THE CLAIMED OF DEDUCTION OF . 30,46,164/ - TOWARDS THE WINDMILL DIVISION UNDER SECTION 80 - IA OF THE ACT FOR THE ASSESSMENT YEAR 201 3 - 1 4 . 4. ON APPEAL BY THE ASSESSEE, LD.CIT (A) DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY FOLLOWING THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF VELAYUDHASWAMY SPINNING MILLS (P) LTD VS. ACIT ( SUPRA ), WHEREIN , IT WAS HELD THAT: - I) EACH ELIGIBLE UNIT OF THE INDUSTRIAL UNDERTAKING HAS TO BE CONSIDERED AS IF SUCH ELIGIBLE BUSINESS WHERE THE ONLY SOURCE OF INCOME OF THE ASSESSEE DURING THE PREVIOUS YEAR RELEVANT TO THE INITIAL ASSESSMENT YEAR AND TO EVERY SUBSEQUENT ASSESSMENT YEAR UPTO THE PERIOD PRESCRIBED UNDER THE ACT FOR THE BENEFIT OF SECTION 80IA OF THE ACT. II) THAT THE INITIAL ASSESSMENT YEAR REFERRED TO SECTION 80 - IA(5) OF THE ACT WOULD MEAN THE YEAR IN WHICH THE ASSESSEE OPTS IN SE LECTING THE YEAR OF CLAIMING RELIEF UNDER SECTION 80 - IA OF THE ACT. III) THAT THE UNABSORBED DEPRECIATION AND CARRY FORWARD LOSSES OF THE EARLIER YEARS WHICH HAD ALREADY BEEN SET OFF AGAINST THE OTHER INCOME I.T.A. NO. 1706 /M/ 1 6 4 CANNOT BE NOTIONALLY CARRY FORWARD AND TAKEN INTO CONSIDERATION FOR THE PURPOSE OF COMPUTATION OF DEDUCTION UNDER SECTION 80 - IA OF THE ACT. 5. BEFORE US, THE LD. DR ARGUED IN SUPPORT OF THE ORDER OF THE LD. ASSESSING OFFICER. THE LD. DR FURTHER SUBMITTED THAT THE LD. ASSESSING OFFICER HAD ARRIVED AT THIS DECISION OUT OF ABUNDANT CAUTION, BECAUSE THE REVENUE HAS CARRIED THE MATTER BEFORE THE HON BLE APEX COURT AND THE MATTER WAS PENDING. THE LD. A.R. ON THE OTHER HAND, RELIED ON THE DECISION OF THE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF VELAYUDHASWAMY SPINNING MILLS (P) LTD., SUPRA AND PRAYED THAT THE ORDER OF THE LD. CIT(A) MAY BE UPHELD. 6. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY PERUSED THE MATERIALS AVAILABLE ON RECORD. FROM THE FACTS OF THE CASE IT APPEARS THAT THE LD. ASSESS ING OFFICER WAS OF THE VIEW THAT SINCE THE REVENUE WAS ON APPEAL AGAINST THE DECISION OF THE HON BLE MADRAS HIGH COURT IN THE CASE VELAYUDHASWAMY SPINNING MILLS P . LTD (SUPRA) BEFORE THE HON BLE APEX COURT, HE NEED NOT FOLLOW THAT DECISION. HE DID NOT REALIZE THAT MERE FILING OF THE SLP BEFORE THE APEX COURT IS NOT A VALID GROUND FOR NOT FOLLOWING THE JUDGMENT OF THE HON BLE MADRAS HIGH COURT. FURTHER, IT IS NOT THE CASE OF THE REVENUE THAT THE JUDGMENT OF THE HON BLE MADRAS HIGH COURT IN THE CASE VELAYUDHA SWAMY SPINNING MILLS P. LTD (SU P R A) IS STAYED BY THE HON BLE APEX COURT. IT IS PERTINENT TO MENTION THAT IN THE ABSENCE OF ANY STAY I.T.A. NO. 1706 /M/ 1 6 5 GRANTED BY THE HON BLE APEX COURT AGAINST THE OPERATION OF THE JUDGMENT OF THE HON BLE MADRAS HIGH COURT, ALL THE LOWER JUDICIARIES AS WELL AS QUASI JUDICIAL AUTHORITIES ARE BOUND TO FOLLOW THE DECISION OF THE HON BLE JURISDICTIONAL HIGH COURT. SINCE THE LD. CIT(A) HAS RIGHTLY FOLLO WED THE DECISION OF THE DECISION OF THE JURISDICTIONAL HIGH COURT CITED SUPRA AND HELD THE ISSUES IN FAVOUR OF THE ASSESSEE, WE DO NOT FIND IT NECESSARY TO INTERFERE WITH THE ORDERS OF THE LD.CIT(A). THEREFORE WE HEREBY CONFIRM THE ORDERS OF THE LD. CIT ( A). 7. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED ON 09 TH OF SEPTEMBER , 201 6 AT CHENNAI. SD/ - SD/ - ( N.R.S. GANESAN ) JUDICIAL MEMBER ( A. MOHAN ALANKAMONY ) ACCOUNTANT MEMBER CHENNAI, DATED, THE 09. 0 9 .201 6 VM/ - / COPY TO: 1. / APPELLANT , 2. / RESPONDENT , 3. ( ) / CIT(A) , 4. / CIT , 5. / DR & 6. / GF.