ACIT, Coimbatore V. Defree Engineering Pvt. Ltd., Coimbatore

ITA 1721/CHNY/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68820 (ITAT-CHENNAI)
• Duration Of Justice: 1 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 10-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T N BETGERI
• Assessee Lawyers: A S SRIRAMAN
• Keywords: Reasonable cause

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI BEFORE DR. O.K. NARAYANAN, VICE-PRESIDENT AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ITA NO. ASSESS- MENT YEAR APPELLANT RESPONDENT 1 721 /MDS/201 3 2010-11 THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE-I(1) COIMBATORE-641 018. M/S. DEFREE ENGINEERING PVT. LTD., S.F.NO.125/2B, AVINASHI ROAD, NEELAMBUR POST, COIMBATORE-14. PAN:AAACD7943E 1722 /MDS/201 3 2010-11 THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE-I(1) COIMBATORE-641 018 M/S. PURANI TEXTILES PVT.LTD. 1239, INDIA HOUSE, TRICHY ROAD COIMBATORE-641 018. PAN:AABCP7909D APPELLANT BY : MR. T.N.BETGERI, JCIT RESPONDENT BY : MR. A.S.SRIRAMAN, ADVOCATE DATE OF HEARING : 6 TH NOVEMBER, 2013 DATE OF PRONOUNCEMENT : 6 TH NOVEMBER, 2013 O R D E R PER CHALLA NAGENDRA PRASAD, JM : THESE TWO APPEALS ARE FILED BY THE REVENUE AGAINST THE ORDERS OF COMMISSIONER OF INCOME TAX (APPEALS)-I, COIMBATORE. SINCE THE ISSUE INVOLVED IN THESE TWO A PPEALS IS COMMON, THEY ARE HEARD TOGETHER AND DISPOSED OFF BY THIS COMMON ORDER. 2. THERE IS A DELAY OF NINE DAYS IN FILING OF BOTH THESE APPEALS BY THE REVENUE FOR WHICH SEPARATE AFFIDAVI TS ARE ITA NOS. 1721 & 1722/MDS/2013 2 FILED EXPLAINING THE REASONS AS TO WHY THE APPEALS WERE FILED BELATEDLY. HAVING GONE THROUGH THE AFFIDAVITS FILE D BY THE REVENUE FOR CONDONATION OF DELAY, WE FIND THERE IS A REASONABLE CAUSE IN NOT FILING THE APPEALS IN TIME. THEREFORE, IN THE INTEREST OF JUSTICE, WE CONDONE THE DELAY OF NINE DAYS IN FILING OF THESE TWO APPEALS AND ADMIT THE SAME FOR DISPOSAL. 3. THE COMMON GROUNDS RAISED BY THE REVENUE IN THES E TWO APPEALS ARE AS UNDER:- THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW IN ALLOWING THE CLAIM OF DEDUCTION U/S.80IA ON WINDMILLS. THE COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE OBSERVED THAT THE ASSESSEE HAS CLAIMED DEDUCTION U/S.80IA WITHOUT CONSIDERING THE SET OFF OF BROUGHT FORWARD LOSSES OF EARLIER YEARS. AS PER SECTION 80IA(5), PROFITS AND GAINS HAS TO BE WORKED OUT TAKING INTO CONSIDERATION THE BROUGHT FORWARD LOSSES OF EARLIER YEARS IN DETERMINING THE QUANTUM OF DEDUCTION ADMISSIBLE EVEN THOUGH THEY MAY HAVE BEEN SET OFF AGAINST THE PROFITS. IN THE LIGHT OF THE ABOVE, ITA NOS. 1721 & 1722/MDS/2013 3 THE ASSESSEE DOES NOT HAVE ELIGIBLE PROFITS TO CLAIM DEDUCTION U/S.80IA. THE DECISION OF MADRAS HIGH COURT IN THE CASE OF M/S.VELAYUDHASAMY SPINNING MILLS (P) LTD. VS. ACIT., REPORTED IN 231 CTR 368 RELIED UPON BY THE COMMISSIONER OF INCOME TAX (APPEALS) HAS NOT BEEN ACCEPTED BY THE DEPARTMENT AND SLP HAS BEEN FILED BEFORE THE HONBLE SUPREME COURT. 4. AT THE TIME OF HEARING, THE COUNSEL FOR THE ASSE SSEE SUBMITS THAT THE ISSUE IN THE APPEAL IS SQUARELY C OVERED BY THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COU RT IN THE CASE OF VELAYUDHA SPINNING MILLS PVT. LTD. (340 ITR 477). THE COUNSEL SUBMITS THAT THE COMMISSIONER OF INCOME TAX (APPEALS) IN FACT FOLLOWING THE SAID DECISION OF TH E HIGH COURT ALLOWED THE APPEAL OF THE ASSESSEE. 5. THE DEPARTMENTAL REPRESENTATIVE CONCEDES THAT T HE ISSUE IN APPEAL IS COVERED BY THE DECISION OF THE H ONBLE JURISDICTIONAL HIGH COURT. ITA NOS. 1721 & 1722/MDS/2013 4 6. HEARD BOTH SIDES. PERUSED THE ORDERS OF THE LOWE R AUTHORITIES AND THE CASE LAW RELIED ON BY THE COUNS EL FOR THE ASSESSEE. THE COMMISSIONER OF INCOME TAX (APPEALS) CONSIDERING THE SUBMISSIONS OF THE ASSESSEE DISPOSE D OF THE APPEALS OBSERVING AS UNDER:- 4. THE MAIN ISSUE IN THE GROUNDS OF APPEAL IS REGARDING DISALLOWANCE MADE U/S.80IA OF THE INCOME TAX ACT. THE AR SUBMITTED THAT THE CLAIM U/S.80IA WAS MADE ON THE BASIS OF HONBLE JURISDICTIONAL HIGH COURT DECISION IN THE CASE OF VELAYUDHASAMY SPINNING MILLS PVT.LTD., IN 231 CTR 368 / 38 DTR 57) (MAD). RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE HIGH COURT, THE ASSESSING OFFICER IS DIRECTED TO ALLOW THE DEDUCTION U/S.80IA OF THE INCOME TAX ACT. THE GROUNDS OF APPEAL ARE ALLOWED. 7. ON GOING THROUGH THE ORDER OF THE COMMISSIONER O F INCOME TAX (APPEALS), WE DO NOT FIND ANY VALID REAS ON TO INTERFERE WITH THE FINDINGS AND DECISION OF THE COM MISSIONER OF INCOME TAX (APPEALS), AS THE COMMISSIONER OF INC OME TAX (APPEALS) FOLLOWED THE DECISION OF THE JURISDICTION AL HIGH COURT IN THE CASE OF VELAYUDHA SPINNING MILLS LTD. (SUPRA ), WHILE ALLOWING THE CLAIM OF THE ASSESSEE UNDER SECTION 80 IA OF THE ACT ON WINDMILL. THEREFORE, WE SUSTAIN THE ORDERS O F THE ITA NOS. 1721 & 1722/MDS/2013 5 COMMISSIONER OF INCOME TAX (APPEALS) IN BOTH THE CA SES. THE GROUNDS RAISED BY THE REVENUE ARE REJECTED. 8. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON WEDNESDAY, THE 6 TH DAY OF NOVEMBER, 2013 AT CHENNAI. SD/- SD/- (DR. O.K.NARAYANAN ) (CHALLA N AGENDRA PRASAD) VICE-PRESIDENT J UDICIAL MEMBER CHENNAI, DATED THE 6 TH NOVEMBER, 2013. SOMU COPY TO: (1) ASSESSEE (2) ASSESSING O FFICER (3) CIT (4) CIT(A) (5) D.R. (6) G.F.