JCIT (OSD), CHENNAI V. Blow Packaging (India) Pvt. Ltd., CHENNAI

ITA 1751/CHNY/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8458 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2016
• Appeal Filed By: Department
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 09-06-2016
• Court: TRIBUNAL
• Department Lawyers: SUPRIYO PAL
• Assessee Lawyers: N VIJAYAKUMAR
• Keywords: Depreciation; Unabsorbed depreciation
• Section: 143(3)

Judgement Text

, , IN THE INCOME - TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . , . , BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER & SHRI DUVVURU R L REDDY , JUDICIAL MEMBER ./ I T.A. NO. 17 51 /MDS/201 6 / ASSESSMENT YEAR :20 1 2 - 1 3 THE JOINT COMMISSIONER OF INCOME TAX (OSD) , CORPORATE CIRCLE 1(2), CHENNAI 600 034. VS. M/S. BLOW PACKAGING (INDIA) PVT. LTD., NO. 55 - D, SIDCO IN DUSTRIAL ESTATE, AMBATTUR, CHENNAI 600 098. [PAN:AA ACB3145L ] ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : SHRI SUPRIYO PAL, JCIT / RESPONDENT BY : SHRI N. VIJAYA KUMAR, C.A. / DATE OF HEARING : 06 . 0 9 .201 6 / DATE OF P RONOUNCEMENT : 23 . 0 9 .201 6 / O R D E R PER DUVVURU RL REDDY , JUDICIAL MEMBER : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOM E TAX ( APPEALS ) 1 , CHENNAI , DATED 1 0 . 0 3 .20 1 6 RELEVANT TO THE ASSESSMENT YEAR 2012 - 13. THE REVENUE HAS RAISED FOUR GROUNDS IN ITS APPEAL, HOWEVER , THE CRUX OF THE ISSUE IS THAT THE L D. CIT(A) HAS ERRED IN ALLOWING DEDUCTION UNDER SECTION 80 - IA OF THE INCOME TAX ACT , 1961 [ ACT IN SHORT] . I.T.A. NO . 1 7 51 /M/ 16 2 2 THE ASSESSEE IS A COMPANY , ENGAGED IN THE BUSINESS OF MANUFACTURE OF PLASTIC CANS AND CONTAINERS , FILED ITS RETURN OF INCOME ON 2 6 . 0 9 .201 2 ADMITTING ITS INCOME OF . 13,20,51,580 / - AFTER CLAIMING DEDUCTION U NDER SECTION 80IA OF THE ACT IN RESPECT OF WINDMILL I AND WINDMILL II AT .51,25,877/ - AND .1,34,08,417/ - RESPECTIVELY . THE CASE WAS TAKEN FOR SCRUTINY THROUGH CASS AND ASSESSMENT U NDER SECTION 143(3) OF THE ACT WAS COMPLETED ON 29 . 0 1 .201 5, WHEREIN , THE A SSESSING O FFICER DISALLOWED THE DEDUCTION UNDER SECTION 80 - IA OF THE ACT ON WINDMILLS. 2 .2 DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS OBSERVED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAD CLAIMED TH E DEDUCTION UNDER SECTION 80 - IA OF THE ACT RELYING UPON THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF VELAYUDHASWAMY SPINNING MILLS (P) LTD VS. ACIT REPORTED IN 231 CTR (MAD) 368 [2010]. HOWEVER THE A SSESSING O FFICER OPINED THAT SINCE THE R EVENUE IS IN APPEAL AND THE MATTER IS PENDING BEFORE THE HON. APEX COURT, HE IS JUSTIFIED IN DISALLOWING THE CLAIM OF DEDUCTION OF WINDMILL I AND WINDMILL II AT .51,25,877/ - AND .1,34,08,417/ - RESPECTIVELY UNDER SECTION 80 - IA OF THE ACT FOR THE ASSESSMEN T YEAR 201 2 - 1 3 . 3 . ON APPEAL BY THE ASSESSEE, L D.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.T.A. NO . 1 7 51 /M/ 16 3 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 ASSES SMENT 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 SELECTING 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 CANNOT BE NOTIONALLY CARRY FORWARD AND TAKEN INTO CONSIDERATION FOR THE P URPOSE OF COMPUTATION OF DEDUCTION UNDER SECTION 80 - IA OF THE ACT. 4 . BEFORE US, BY RELYING ON THE ASSESSMENT ORDER THE L D. DR SUBMITTED THAT THE 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 L D. 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 ) AN D PRAYED THAT THE ORDER OF TH E L D. CIT(A) MAY BE UPHELD. 5. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY PERUSED THE MATERIALS AVAILABLE ON RECORD. FROM THE FACTS OF THE CASE IT APPEARS THAT THE ASSESSING OFFICER WAS OF THE VIEW THAT SINCE THE REVENUE WAS ON APPEAL AGAINST THE DECI SION OF THE HON BLE MADRAS HIGH COURT IN THE CASE VELAYUDHASWAMY I.T.A. NO . 1 7 51 /M/ 16 4 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 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 L D. CIT(A) HAS RIGHTLY FOLLOW ED 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 L D.CIT(A). THEREFORE WE HEREBY CONFIRM THE ORDERS OF THE L D. CIT (A ). 6 . IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED ON THE 23 RD SEPTEMBER, 2016 AT CHENNAI. SD/ - SD/ - (A. MOHAN ALANKAMONY ) ACCOUNTANT MEMBER ( DUVVURU RL REDDY ) JUDICIAL MEMBER CHENNAI, DATED, THE 23 . 0 9 .201 6 VM/ - I.T.A. NO . 1 7 51 /M/ 16 5 / COPY TO: 1. / APPELLANT , 2. / RESPONDENT , 3. ( ) / CIT(A) , 4. / CIT , 5. / DR & 6. / GF.