ACIT, CHENNAI V. Global Calcium Private Limited, Hosur

ITA 186/CHNY/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9290 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-05-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 02-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN
• Assessee Lawyers: M VISWANATHAN
• Keywords: Depreciation; Unabsorbed depreciation
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , A B ENCH, CHENNAI . . . , . , % BEFORE SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NOS.185 & 186/MDS/2016 ( / ASSESSMENT YEAR: 2011-12 & 2012-13) THE ASSISTANT COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE-2(1), CHENNAI-600 034. VS M/S. GLOBAL CALCIUM PVT. LTD., 125 & 126, SIPCOT INDUSTRIAL COMPLEX, HOSUR-635 126. PAN:AAACG2998N ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. P.RADHAKRISHNAN, JCIT /RESPONDENT BY : MR. M.VISWANATHAN, C.A. /DATE OF HEARING : 23 RD MARCH, 2016 /DATE OF PRONOUNCEMENT : 23 RD MAY, 2016 / O R D E R PER A. MOHAN ALANKAMONY, AM:- THESE TWO APPEALS ARE FILED BY THE REVENUE AGGRIE VED BY THE ORDERS OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-6, CHENNAI BOTH DATED 30.11.2015 IN I TA NOS.127 & 162/CIT(A)-6/2014-15 PASSED UNDER SECTIO N 143(3) R.W.S. 250(6) OF THE ACT. SINCE THE ISSUE I NVOLVED IS COMMON, BOTH THE APPEALS ARE HEARD TOGETHER AND DIS POSED OFF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENC E. 2. THE REVENUE HAS RAISED SEVERAL GROUNDS IN THESE APPEALS, HOWEVER, THE CRUX OF THE ISSUE IS THAT THE LEARNED 2 ITA NOS. 185 & 186/MDS/2016 COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN D ELETING THE ADDITION OF ` 59,69,067/- & ` 64,52,912/- FOR THE ASSESSMENT YEARS 2011-12 & 2012-13 RESPECTIVELY MAD E BY THE LEARNED ASSESSING OFFICER WHO HAD DISALLOWED TH E CLAIMS OF THE ASSESSEE UNDER SECTION 80IA OF THE ACT BECAU SE FOR THE PURPOSE OF SECTION 80IA OF THE ACT PROFIT FROM ELI GIBLE BUSINESS HAS TO BE COMPUTED AFTER DEDUCTION OF NOTI ONAL BROUGHT FORWARD LOSSES AND DEPRECIATION OF THE ELIG IBLE BUSINESS, EVEN THOUGH THEY HAVE BEEN ALLOWED TO BE SET OFF AGAINST OTHER INCOME IN THE EARLIER ASSESSMENT YEAR S. 3. BRIEF FACTS ARE THAT THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURING BULK DRU GS FILED ITS RETURNS OF INCOME ON 30.09.2011 & 28.09.2012 F OR THE ASSESSMENT YEARS 2011-12 & 2012-13 ADMITTING INCOM E OF ` 2,28,06,150/- & ` 7,45,24,131/- RESPECTIVELY AFTER CLAIMING DEDUCTIONS UNDER CHAPTER VIA. IN THE SCRUTINY ASSES SMENT PROCEEDINGS, THE LEARNED ASSESSING OFFICER DISALLOW ED THE CLAIM OF DEDUCTION MADE BY THE ASSESSEE UNDER SECTI ON 80IA OF THE ACT FOR BOTH THE ASSESSMENT YEARS RELYING ON THE DECISION OF THE SPECIAL BENCH OF THE AHMEDABAD BENC H 3 ITA NOS. 185 & 186/MDS/2016 TRIBUNAL IN THE CASE OF ACIT VS. GOLDMINE SHARES & FINANCE P.LTD. REPORTED IN 113 ITD 209, WHEREIN IT IS HELD AS FOLLOWS:- THE SPECIFIC PROVISION OF DEDUCTION U/S.80IA(5) PROFIT FROM ELIGIBLE BUSINESS FOR PURPOSE OF DETERMINATION OF QUANTUM OF DEDUCTION U/S.80IA HAS TO BE COMPUTED AFTER DEDUCTION OF NOTIONAL BROUGHT FORWARD LOSSES AND DEPRECIATION OF ELIGIBLE BUSINESS, EVEN THOUGH THEY HAVE BEEN ALLOWED TO BE SET OFF AGAINST OTHER INCOME IN EARLIER YEARS. 4. ON APPEAL, THE LEARNED COMMISSIONER OF INCOME TA X (APPEALS) FOLLOWING THE DECISION OF THE CHENNAI B ENCH OF THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE ASSESSM ENT YEAR 2010-11 IN ITA NO.81/MDS/2015 DATED 29.05.2015 AND THE JUDGMENT OF THE JURISDICTIONAL HIGH COURT IN THE CA SE OF SRI VELAYUTHASAMY SPINNING MILLS REPORTED IN 231 ITR 36 8 DELETED THE ADDITIONS MADE BY THE LEARNED ASSESSIN G OFFICER FOR BOTH THESE ASSESSMENT YEARS ON ACCOUNT OF DISAL LOWANCE OF DEDUCTION UNDER SECTION 80IA OF THE ACT. 5. BEFORE US, THE LEARNED DEPARTMENTAL REPRESENTATI VE ARGUED IN SUPPORT OF THE ORDER OF THE LEARNED ASSES SING OFFICER WHILE AS THE LEARNED AUTHORIZED REPRESENTAT IVE ARGUED IN SUPPORT OF THE ORDER OF THE LEARNED COMMI SSIONER OF INCOME TAX (APPEALS). 4 ITA NOS. 185 & 186/MDS/2016 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND CAREFULL Y PERUSED THE MATERIAL ON RECORD. ON A PERUSAL OF THE ASSESSMENT ORDER, IT APPEARS THAT THE LEARNED ASSES SING OFFICER WAS OF THE VIEW THAT, HAD THE ASSESSEE COMP ANY MAINTAINED SEPARATE ACCOUNTS OF THE UNDERTAKING FRO M THE INITIAL YEAR, THE UNABSORBED DEPRECIATION BROUGHT F ORWARD WILL BE STILL AVAILABLE FOR SET OFF AGAINST THE PROFIT AND THEREAFTER THE ASSESSEE COMPANY WOULD NOT HAVE LEFT WITH ANY PROFIT FOR CLAIMING DEDUCTION UNDER SECTION 80IA OF THE ACT. HOWEVER, WE FIND THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) BY FOLLOWING THE DECISION OF THE JURISDIC TIONAL HIGH COURT IN THE CASE OF SRI VELAYUDHASWAMY SPINNING MI LLS PVT.LTD. CITED SUPRA HAS RIGHTLY ALLOWED THE CLAIM OF THE ASSESSEE UNDER SECTION 80IA OF THE ACT. FURTHER, IT IS NOT THE CASE OF THE REVENUE THAT THE JUDGMENT OF THE HONBL E MADRAS HIGH COURT IN THE CASE VELAYUDHASWAMY SPINNING MILL S P. LTD (SURPA) IS STAYED BY THE HONBLE APEX COURT. I T IS PERTINENT TO MENTION THAT IN THE ABSENCE OF ANY STA Y GRANTED BY THE HONBLE APEX COURT AGAINST THE OPERATION OF THE JUDGMENT OF THE HONBLE MADRAS HIGH COURT, ALL THE LOWER JUDICIARIES AS WELL AS QUASI JUDICIAL AUTHORITIES A RE BOUND TO 5 ITA NOS. 185 & 186/MDS/2016 FOLLOW THE DECISION OF THE HONBLE JURISDICTIONAL H IGH COURT. SINCE THE LEARNED COMMISSIONER OF INCOME TAX (APPEA LS) HAS RIGHTLY FOLLOWED THE DECISION OF THE HONBLE JU RISDICTIONAL MADRAS HIGH COURT(SUPRA) AND HELD THE ISSUE IN FAVO UR OF THE ASSESSEE, WE DO NOT FIND IT NECESSARY TO INTERFERE WITH THE ORDERS OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS). THEREFORE WE HEREBY CONFIRM THE ORDERS OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FOR BO TH THE ASSESSMENT YEARS. 7. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE A RE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 23 RD MAY 2016 SD/- SD/- ( . . . ) ( . ) (N.R.S.GANESAN) ( A.M OHAN ALANKAMONY ) # % / JUDICIAL MEMBER % / ACCOUNTANT MEMBER # /CHENNAI, ( /DATED 23 RD MAY, 2016 SOMU *+ ,+ /COPY TO: 1. APPELLANT 2. RESPONDENT 3. - () /CIT(A) 4. - /CIT 5. + 1 /DR 6. /GF