DCIT, Coimbatore V. Vetal Textiles and Electronics Pvt. Ltd., Coimbatore

ITA 2092/CHNY/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81285 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 08-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , C B ENCH, CHENNAI . , ! # $ , % & BEFORE SHRI A.MOHAN ALANKAMONY ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ./I.T.A.NO. 2092/MDS/2014 ( / ASSESSMENT YEAR: 2010-11) DEPUTY COMMISSIONER OF INCOME TAX, COMPANY CIRCLE-I(1), 63-A, RACE COURSE ROAD, COIMBATORE. VS M/S. VETAL TEXTILES AND ELECTRONICS PVT.LTD., 1, INDUSTRIAL ESTATE, CIVIL AERODROME POST, COIMBATORE-641 014. PAN:AAACV6385J ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. A.V.SREEKANTH , JCIT /RESPONDENT BY : NONE / DATE OF HEARING : 19 TH NOVEMBER, 2014 /DATE OF PRONOUNCEMENT : 28 TH NOVEMBER, 2014 / O R D E R PER CHALLA NAGENDRA PRASAD, JM: THIS APPEAL IS FILED BY THE REVENUE AGAINST THE OR DER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-I, COIMBAT ORE DATED 01.05.2014 FOR THE ASSESSMENT YEAR 2010-11. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. THE ORDER OF THE LEARNED CIT(APPEALS)-I, COIMBATORE IS AGAINST LAW, FACTS OF THE CASE. 2. THE LEARNED CIT(APPEALS)-I, COIMBATORE HAS ERRED IN ALLOWING THE CLAIM OF DEDUCTION U/S.80-IA ON WINDMILLS. 2 ITA NO.2092/MDS/2014 3. THE LEARNED CLT(APPEALS)-I, COIMBATORE OUGHT TO HAVE OBSERVED THAT ASSESSEE HAS CLAIMED DEDUCTION U/S.80-IA WITHOUT CONSIDERING THE SET OFF OF BROUGHT FORWARD LOSSES OF EARLIER YEARS. AS PER SECTION 80-IA(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, THE ASSESSEE DOES NOT HAVE ELIGIBLE PROFITS TO CLAIM DEDUCTION UNDER SECTION 80IA. 4. THE DECISION IN THE CASE OF M/S. VELAYUDHASAMY SPINNING MILLS P.LTD., VS. ACIT MADRAS HIGH COURT REPORTED IN 231 CTR 368 / 38 DTR 57 (MAD) RELIED UPON BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS NOT BEEN ACCEPTED BY THE DEPARTMENT AND SLP HAS BEEN FILED BEFORE THE HONBLE SUPREME COURT. 5. FOR THESE AND OTHER GROUNDS THAT MAY BE ADDUCED AT THE TIME OF HEARING, THE ORDER OF THE LEARNED CIT(APPEALS)-I, COIMBATORE MAY BE CANCELLED AND THAT OF THE ASSESS I NG OFFICER RESTORED. 3. THOUGH SEVERAL GROUNDS WERE RAISED BY THE REVENU E, THE EFFECTIVE GROUND IS GROUND NO.3. NONE APPEARED ON BEHALF OF THE ASSESSEE AND SINCE THE ISSUE IN APPEAL IS CO VERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE HONB LE JURISDICTIONAL HIGH COURT IN THE CASE OF M/S. VELAY UDHASWAMY SPINNING MILLS LTD. VS. ACIT (340 ITR 477), WE PRO CEED TO DISPOSE OFF THE APPEAL ON MERITS AFTER HEARING THE D.R. 3 ITA NO.2092/MDS/2014 4. THE ASSESSING OFFICER DENIED THE CLAIM FOR DEDUC TION UNDER SECTION 80IA OF THE ACT TO THE ASSESSEE HOLDI NG THAT FOR CLAIMING DEDUCTION UNDER SECTION 80-IA AS PER THE P ROVISIONS OF SECTION 80-IA(5), INITIAL ASSESSMENT YEAR SHOULD BE THE YEAR IN WHICH THE ASSESSEE COMMENCES THE ELIGIBLE B USINESS, BUT NOT THE YEAR IN WHICH ASSESSEE BEGINS TO CLAIM DEDUCTION UNDER SECTION 80IA OF THE ACT. THE QUESTION AS TO WHETHER INITIAL ASSESSMENT YEAR MEANS THE YEAR OF COMMENCEM ENT OR THE YEAR OF INITIAL CLAIM OF DEDUCTION WAS DECIDED BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF VELAYUDHASWAMY SPINNING MILLS LTD. VS. ACIT (SUPRA) . THE HONBLE HIGH COURT HELD THAT INITIAL ASSESSMENT YEA R MEANS THE YEAR IN WHICH THE ASSESSEE BEGINS TO CLAIM DEDU CTION UNDER SECTION 80IA OF THE ACT. THE HONBLE HIGH CO URT FURTHER HELD THAT THE LOSS IN THE YEARS EARLIER TO THE INIT IAL ASSESSMENT YEAR WHICH WAS ALREADY ABSORBED AGAINST THE PROFIT OF OTHER BUSINESS COULD NOT BE NOTIONALLY BROUGHT FORWARD A ND SET OFF AGAINST THE PROFITS OF THE ELIGIBLE BUSINESS AS NO SUCH MANDATE WAS PROVIDED IN SECTION 80-IA(5) OF THE ACT . THE COMMISSIONER OF INCOME TAX (APPEALS) ALLOWED THE CL AIM OF 4 ITA NO.2092/MDS/2014 THE ASSESSEE FOLLOWING THE JURISDICTIONAL HIGH COUR T DECISION IN THE CASE OF VELAYUDHASWAMY SPINNING MILLS LTD. V S. ACIT(SUPRA). RESPECTFULLY FOLLOWING THE SAID DECISI ON WE SUSTAIN THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) ON THIS ISSUE AND REJECT THE GROUNDS OF A PPEAL RAISED BY THE REVENUE. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON FRIDAY , THE 28 TH DAY OF NOVEMBER, 2014 AT CHENNAI. SD/- SD/- ( . ) ( ( *+ ) ( A.MOHAN ALANKAMONY ) ( CHALLA NAGENDR A PRASAD ) - / ACCOUNTANT MEMBER * - / JUDICIAL MEMBER * /CHENNAI, / /DATED 28 TH NOVEMBER, 2014 SOMU 12 32 /COPY TO: 1. APPELLANT 2. RESPONDENT 3. 4 () /CIT(A) 4. 4 /CIT 5. 2 7 /DR 6. /GF .