ITO, Tiruppur V. Cylwin Knitwear, Tiruppur

ITA 2163/CHNY/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81265 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-11-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 30-10-2014
• Assessment Year: 2010-2011
• Appeal Filed On: 20-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN
• Keywords: Depreciation

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.NO. 2163/MDS/2014 ( / ASSESSMENT YEAR: 2010-11) INCOME TAX OFFICER, WARD-I(5), TIRUPUR. VS M/S. CYLWIN KNITWEAR, 502-B, NADUPANGU PARADISE DHARPURAM ROAD, TIRUPUR-641 608 PAN:AABFC5108J ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR.P. RADHAKRISHNAN , JCIT /RESPONDENT BY : NONE / DATE OF HEARING : 30 TH OCTOBER, 2014 /DATE OF PRONOUNCEMENT : 13 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)-II, COIMBA TORE DATED 29.5.2014 FOR THE ASSESSMENT YEAR 2010-11. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. THE ORDER OF THE LEARNED CIT(APPEALS)-II, COIMBATORE IS AGAINST FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE LEARNED CIT(APPEALS)-II, COIMBATORE HAS ERRED IN HOLDING THAT THE ASSESSEE 2 ITA NO.2163/MDS/2014 IS ENTITLED FOR DEDUCTION U/S. 80-LA OF THE ACT . 3. THE LEARNED CLT(APPEALS)-II, COIMBATORE HAS ERRED IN HOLDING THAT THE ASSESSMENT YEAR 2010- 11 IS THE FIRST INITIAL ASSESSMENT YEAR IN WHICH THE ASSESSEE HAD CLAIMED THE DEDUCTION U/S. 80- LA, AND, THEREFORE , THE DEPRECIATION OF EARLIER YEARS (WHICH HAVE ALREADY BEEN ABSORBED) CANNOT BE NOTIONALLY CARRIED FORWARD AND CONSIDERED IN COMPUTING THE QUANTUM OF DEDUCTION U/S.80IA. 4. THE LEARNED CIT(APPEALS)-II, COIMBATORE, SHOULD HAVE OBSERVED THAT AS PER THE PROVISIONS OF SECTION-80IA(2) AN ASSESSEE CAN OPT FOR DEDUCTION OF ANY TEN CONSECUTIVE YEARS OUT OF FIFTEEN YEARS, RECKONED FROM THE FIRST YEAR IN WHICH THE UNDERTAKING ENTERPRISE GENERATES POWER OR COMMENCES TRANSMISSION OR DISTRIBUTES POWER, ETC . 5. THE LEARNED CIT(APPEALS)-II, COIMBATORE, OUGHT TO HAVE APPRECIATED, THAT AS PER THE PROVISIONS OF THE SECTION-80LA(5) THE ELIGIBLE UNDERTAKING SHOULD BE TREATED AS ONLY SOURCE OF INCOME FOR COMPUTING THE QUANTUM OF DEDUCTION ALLOWABLE U/S.80IA. 6. THE LEARNED CIT(APPEALS)-II, COIMBATORE, SHOULD HAVE TAKEN NOTE OF THE FACT THAT THE SEC - 80LA(5) BEGINS WITH A NON-OBSTANTE CLAUSE; AND, THEREFORE, THE RESTRICTION THEREIN, SHALL PREVAIL I N COMPUTING AND ALLOWING THE DEDUCT I ON U/S.80IA. 7. FOR THESE AND OTHER GROUNDS THAT MAY BE ADDUCED AT THE TIME OF HEARING, THE ORDER OF THE LEARNED CIT(APPEALS)-II, COIMBATORE MAY BE CANCELLED AND THAT OF THE ASSESS I NG OFFICER RESTORED. 3 ITA NO.2163/MDS/2014 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 (231 CTR 368), WE PRO CEED TO DISPOSE OFF THE APPEAL ON MERITS AFTER HEARING THE D.R. 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 4 ITA NO.2163/MDS/2014 UNDER SECTION 80IA OF THE ACT. THE COMMISSIONER OF INCOME TAX (APPEALS) ALLOWED THE CLAIM OF THE ASSESSEE FOL LOWING THE JURISDICTIONAL HIGH COURT DECISION IN THE CASE OF VELAYUDHASWAMY SPINNING MILLS LTD. VS. ACIT(SUPRA). RESPECTFULLY FOLLOWING THE SAID DECISION WE SUSTAIN THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) ON THIS ISSUE AND REJECT THE GROUNDS OF APPEAL RAISED BY THE REVE NUE. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON THURSDAY, TH E 13 TH DAY OF NOVEMBER, 2014 AT CHENNAI. SD/- SD/- ( . ) ( ( *+ ) ( A.MOHAN ALANKAMONY ) ( CHALLA NAGENDR A PRASAD ) - / ACCOUNTANT MEMBER * - / JUDICIAL MEMBER * /CHENNAI, / /DATED 13 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 .