DCIT, Tiruppur V. G V G Industries Pvt Ltd., Tiruppur

ITA 1969/CHNY/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 7803 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 18-02-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 10-09-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A B KOLI
• Assessee Lawyers: A DANANJAYAN
• Keywords: Depreciation
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , B B ENCH, CHENNAI . , ! # % & , ' ! ( BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ./ I.T.A.NOS.1969 &1970/MDS/2015 ( / ASSESSMENT YEARS: 2011-12 & 2012-13) THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-2, 121, 60 FEET ROAD, TIRUPUR-641 602 VS M/S. G V G INDUSTRIES PVT.LTD. 54/2, JOTHI NAGAR, VENKATESA MILL POST,UDUMALPET, TIRUPUR-642 128 PAN:AAACG1205E ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. A.B.KOLI, JCIT /RESPONDENT BY : MR. A.DANANJAYAN, ADVOCATE /DATE OF HEARING : 18 TH FEBRUARY, 2016 /DATE OF PRONOUNCEMENT : 23 RD MARCH, 2016 / O R D E R PER A. MOHAN ALANKAMONY, AM:- THESE TWO APPEALS ARE FILED BY THE ASSESSEE AGGRIE VED BY THE SEPARATE ORDERS OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-3, COIMBATORE DATED 29.06.2015 IN ITA NO.41 & 537/2014-15 PASSED UNDER SECTION 143(3) OF THE ACT. SINCE BOTH THE APPEALS ARE ON IDENTICAL ISSUE THEY ARE HEARD TOGETHER AND DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THOUGH THE REVENUE HAS RAISED ELABORATE GROUNDS, THE CRUX OF THE ISSUE IN BOTH THESE APPEALS IS THAT THE LEARNED 2 ITA NO.1969 & 1970 /MDS/2015 COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN D ELETING THE ADDITION MADE BY THE LEARNED ASSESSING OFFICER BY DISALLOWING THE CLAIM OF THE ASSESSEE UNDER SECTION 80IA OF THE ACT. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A DOMESTIC COMPANY FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEARS 2011-12 & 2012-13 BY CLAIMING DEDU CTION UNDER SECTION 80IA OF THE ACT IN RESPECT OF INCOME GENERATED FROM WINDMILL BY RELYING IN THE DECISION OF THE JUR ISDICTIONAL HIGH COURT IN THE CASE OF SRI VELAYUTHASAMY SPINNIN G MILLS REPORTED IN 231 ITR 368. HOWEVER, THE LEARNED ASSES SING OFFICER WAS OF THE VIEW THAT SINCE THE REVENUE IS I N APPEAL BEFORE THE HONBLE APEX COURT THE ISSUE HAS NOT BEC OME FINAL. THE ASSESSING OFFICER OPINED THAT AS PER SEC TION 80IA OF THE ACT PROFITS AND GAINS OF AN ELIGIBLE BUSINE SS HAS TO BE WORKED OUT AS IF SUCH ELIGIBLE BUSINESS WERE THE ON LY SOURCE OF INCOME OF THE ASSESSEE RIGHT FROM THE COMMENCEME NT OF THE BUSINESS AND IN SUBSEQUENT YEARS UPTO THE COMPU TATION IS MADE AND BUSINESS LOSSES, DEPRECIATION AND INVES TMENT ALLOWANCE OF EARLIER YEARS SHOULD BE TAKEN INTO ACC OUNT IN 3 ITA NO.1969 & 1970 /MDS/2015 DETERMINING THE QUANTUM OF DEDUCTION ADMISSIBLE UND ER THE NEW SECTION 80IA EVEN THOUGH THEY MAY HAVE BEEN SE T OFF AGAINST THE PROFITS OF THE TAX PAYER FROM OTHER SOU RCES. FURTHER THERE IS NO CHANGE IN THE WORDINGS WITH REG ARD TO COMPUTATION OF PROFITS AND GAINS OF THE ELIGIBLE BU SINESS RIGHT FROM THE IMPORT AND UNTIL NOW. THEREFORE, THE LEARN ED ASSESSING OFFICER HELD THAT SINCE THE ASSESSEE DOES NOT HAVE ELIGIBLE PROFITS IT CANNOT CLAIM THE DEDUCTION UNDE R SECTION 80IA OF THE ACT. 4. ON APPEAL, THE LEARNED COMMISSIONER OF INCOME TA X (APPEALS) FOLLOWING THE DECISION OF THE JURISDICTIO NAL HIGH COURT IN THE CASE OF SRI VELAYUTHASAMY SPINNING MIL LS REPORTED IN 231 ITR 368 ALLOWED THE APPEAL OF THE A SSESSEE, AGAINST WHICH THE REVENUE IS IN APPEAL BEFORE US FO R BOTH THESE ASSESSMENT YEARS. 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 4 ITA NO.1969 & 1970 /MDS/2015 ARGUED IN SUPPORT OF THE ORDER OF THE LEARNED COMMI SSIONER OF INCOME TAX (APPEALS). 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND CAREFULL Y PERUSED THE MATERIAL ON RECORD. WE FIND THAT THE L EARNED COMMISSIONER OF INCOME TAX (APPEALS) BY FOLLOWING T HE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CA SE OF SRI VELAYUDHASWAMY SPINNING MILLS PVT.LTD., CITED SUPRA ALLOWED THE CLAIM OF THE ASSESSEE UNDER SECTION 80IA OF THE ACT. THEREFORE, WE HAVE NO HESITATION TO CONFIRM THE ORD ERS OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IN ALL OWING THE CLAIM OF THE ASSESSEE UNDER SECTION 80IA OF THE ACT FOR BOTH THESE 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 MARCH, 2016 SD/- SD/- ( # % & ) ( . ) (CHALLA NAGENDRA PRASAD) ( A.MOHAN ALANK AMONY ) # % / JUDICIAL MEMBER % / ACCOUNTANT MEMBER # /CHENNAI, ( /DATED 23 RD MARCH, 2016 SOMU 5 ITA NO.1969 & 1970 /MDS/2015 *+ ,+ /COPY TO: 1. APPELLANT 2. RESPONDENT 3. - () /CIT(A) 4. - /CIT 5. + 1 /DR 6. /GF