DCIT, Tiruppur V. M/s. Best Corporation (P) Ltd., Tiruppur

ITA 2149/CHNY/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7449 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-03-2017
• Appeal Filed By: Department
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 18-07-2016
• Court: TRIBUNAL
• Department Lawyers: SHIVA SRINIVAS
• Keywords: Depreciation; Unabsorbed depreciation
• Section: 143(3)

Judgement Text

, , IN THE INCOME - TAX APPELLATE TRIBUNAL A BENCH, CHENNAI , . , BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER & SHRI DUVVURU RL REDDY, JUDICIAL MEMBER ./ I T.A. NO. 2 149 /MDS/201 6 / ASSESSMENT YEAR :20 13 - 1 4 THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 1 , TIRUPUR. VS. M/S. BEST CORPORATION (P) LTD., NO. 89/2, PADMAVATHIPURAM, AVINASHI ROAD, T IRUPUR 641 6 03 . [PAN: AA C CR6828G ] ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : SHRI SHIVA SRINIVAS , J CIT / RESPONDENT BY : NONE / DATE OF HEARING : 2 8 . 1 2 .201 6 / DAT E OF P RONOUNCEMENT : 24 . 0 3 .201 7 / 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 INCOME TAX (APPEALS) 3 , C OIMBATORE DATED 2 9 . 0 4 .201 6 RELEVANT TO THE AS SESSMENT YEAR 20 13 - 1 4 . THE ONLY EFFECTIVE GROUND RAISED BY THE REVENUE 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] . 2. THE ASSESSEE IS A COMPANY , ENGAGED IN THE BUSINESS OF PURC HASE, MANUFACTURE , SALES AND EXPORT OF YARN, CLOTH, GARMENTS AND GENERAT ION OF I.T.A. NO . 2 149 /M/ 16 2 WIND ENERGY . THE ASSESSEE FILED ITS RETURN OF INCOME ON 30. 11 .201 3 ADMITTING ITS INCOME OF . 31,15,72,640 / - AFTER CLAIMING DEDUCTION OF . 13,50,40,451 / - U NDER SECTION 80IA OF THE ACT . THE CASE WAS TAKEN FOR SCRUTINY THROUGH CASS AND ASSESSMENT U NDER SECTION 143(3) OF THE ACT WAS COMPLETED ON 0 2 . 02 .201 6, WHEREIN , THE A SSESSING O FFICER DISALLOWED THE DEDUCTION UNDER SECTION 80 - IA OF THE ACT ON WIND TURBINE GENERATOR . 3 DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS OBSERVED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAD CLAIMED THE 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 REVENUE IS IN APPEAL AND THE MATTER IS PENDING BEFORE THE HO N. APEX COURT, HE IS JUSTIFIED IN DISALLOWING THE CLAIM OF DEDUCTION OF .13,50,40,451/ - UNDER SECTION 80 - IA OF THE ACT. 4 . ON APPEAL BY THE ASSESSEE, L D.CIT (A) DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY FOLLOWING THE DECISION OF THE JURISDICTIONA L HIGH COURT IN THE CASE OF VELAYUDHASWAMY SPINNING MILLS (P) LTD VS. ACIT ( SUPRA ), WHEREIN , IT WAS HELD THAT: - I) EACH ELIGIBLE UNIT OF THE INDUSTRIAL UNDERTAKING HAS TO BE CONSIDERED AS IF SUCH ELIGIBLE BUSINESS WHERE THE ONLY SOURCE OF INCOME OF TH E ASSESSEE DURING THE PREVIOUS YEAR RELEVANT TO THE INITIAL ASSESSMENT I.T.A. NO . 2 149 /M/ 16 3 YEAR AND TO EVERY SUBSEQUENT ASSESSMENT 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 SECT ION 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 S ET OFF AGAINST THE OTHER INCOME CANNOT BE NOTIONALLY CARRY FORWARD AND TAKEN INTO CONSIDERATION FOR THE PURPOSE OF COMPUTATION OF DEDUCTION UNDER SECTION 80 - IA OF THE ACT. 5 . BEFORE US, BY RELYING ON THE ASSESSMENT ORDER THE L D. DR SUBMITTED THAT THE AS SESSING 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. NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE ISSUANCE OF NOTICE . HENCE, WE PROCEE DED TO DECIDE THE APPEAL ON MERITS AFTER HEARING THE LD. DR. 6 . WE HAVE HEARD THE LD. DR AND CAREFULLY PERUSED THE MATERIALS AVAILABLE ON RECORD. FROM THE FACTS OF THE CASE IT APPEAR S THAT THE ASSESSING OFFICER WAS OF THE VIEW THAT SINCE THE REVENUE WAS ON APPEAL AGAINST THE DECISION OF THE HON BLE MADRAS HIGH COURT IN THE CASE VELAYUDHASWAMY 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 I.T.A. NO . 2 149 /M/ 16 4 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 FOLLOWED 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). 7 . IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON THE 24 TH MARCH, 201 7 AT CHENNAI. SD/ - SD/ - (CHANDRA POOJARI) ACCOUNTANT MEMBER ( DUVVURU RL REDDY ) JUDICIAL MEMBER CHENNAI, DATED, THE 24 . 0 3 .201 7 VM/ - / COPY TO: 1. / APPELLANT , 2. / RESPONDENT , 3. ( ) / CIT(A) , 4. / CIT , 5. / DR & 6. / GF.