DCIT, Tiruppur V. M/s. Kongoor Textiles Process, Tiruppur

ITA 2464/CHNY/2016

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3993 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2016
• Appeal Filed By: Department
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 23-08-2016
• Court: TRIBUNAL
• Department Lawyers: SUPRIYO PAL
• Assessee Lawyers: N VIJAYAKUMAR C A MDS DC
• Keywords: Depreciation; Unabsorbed depreciation
• Section: 143(3)

Judgement Text

, , IN THE INCOME - TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . , . , BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER & SHRI DUVVURU R L REDDY , JUDICIAL MEMBER S L . NO. I.T.A. NO.(S) A . Y . APPELLANT RESPONDENT 01. 2456/MDS/2016 2012 - 13 THE DCIT, CIRCLE 2, TIRUPUR M/S. SULOCHANA COTTON SPINNING MILLS PVT. LTD., NO. 424 & 426, KAMARAJ ROAD, TIRUPUR 641 604. [PAN: AADCS8189G] 02. 2457/MD S/2016 2013 - 14 / APPELLANT BY : SHRI SUPRIYO PAL, JCIT /RESPONDENT BY : SHRI N. VIJAYAKUMAR, C.A. 03. 2458/MDS/2016 2012 - 13 THE DCIT, CIRCLE 2, TIRUPUR M/S. NETWORK CLOTHING COMPANY (P) LTD., NO. 2/641, NCC HOUSE, MANGALAM RO AD, ANDIPALAYAM, TIRUPUR 642 687 [PAN: AABCN0220F] 04. 2459/MDS/2016 2013 - 14 / APPELLANT BY : SHRI SUPRIYO PAL, JCIT /RESPONDENT BY : NONE 05. 2460/MDS/2016 2013 - 14 THE DCIT, CIRCLE 2, TIRUPUR M/S. CENTW IN TEXTILE MILLS PVT. LTD., S.F.NO. 100, PALLADAM ROAD, TIRUPUR 641 604. [AAACC8793R] 0 6 . 2461/MDS/2016 2013 - 14 THE DCIT, CIRCLE 2, TIRUPUR M/S. FREELOOK FASHIONS, NO. 244/1, FREELOOK GARDEN, MUTHANALAYAM ROAD, NULLUR, TIRUPUR 642 606. [PAN: AAAFF5498D ] / APPELLANT BY : SHRI SUPRIYO PAL, JCIT /RESPONDENT BY : SHRI N. VIJAYAKUMAR, C.A. 07. 2462/MDS/2016 2013 - 14 THE DCIT, CIRCLE 2, TIRUPUR M/S. S V A SYNTEX PVT. LTD., NO. 54/2, JOTHI NAGAR, VENKATESA MILL POST, UDUMALPET, TIRUPUR 642 128. [PAN: AADCS0639R] / APPELLANT BY : SHRI SUPRIYO PAL, JCIT I.T.A. NO S . 2456 TO 2466 /M/ 16 2 /RESPONDENT BY : SHRI A. ARJUNARAJ, C.A. 08. 2463/MD/2016 2012 - 13 THE DCIT, CIRCLE 2, TIRUPUR M/S. COTTON BLOSSOM INDIA PVT. LTD., SHED NO. 189, TEKIC TEA NAGAR, SIDCO, MUDALIPALAYAM, TIRUPUR 641 606. [PAN: AACCC5046R] / APPELLANT BY : SHRI SUPRIYO PAL, JCIT /RESPONDENT BY : SHRI N. VIJAYAKUMAR, C.A. 0 9. 2464/MDS/2016 2012 - 13 THE DCIT, CIRCLE 2, TIRUPUR M/S. KONGOOR TEXTILES PROCESS, NO. 117/1C, PATCHANKATTUPALAYAM, ARULPURAM PO, PALADAM ROAD, VEERAPANDI VIA, TIRUPUR 642 605. [PAN:AADFK5062D] 1 0 . 2465/MDS/2016 2012 - 13 THE DCIT, CIRCLE 2, TIRUPUR M/S. ULTIMATE ALLOYS (P) LTD ., NO. 18, M R NAGAR, DHARAPURAM ROAD, TIRUPUR 641 608. [PAN:AAACU3303P] / APPELLANT BY : SHRI SUPRIYO PAL, JCIT /RESPONDENT BY : NONE 11. 2466/MDS/2016 2013 - 14 THE DCIT, CIRCLE 2, TIRUPUR M/S. BKS TEXTILES PVT. LTD., 2/316, KUNGUMPALAYAM PIRIVU, TIRUPUR MAIN ROAD, NARANPURAM(PO), TI RUPUR 642664. [PAN:AACCB3382R] / APPELLANT BY : SHRI SUPRIYO PAL, JCIT / RESPONDENT BY : SHRI N. VIJAYAKUMAR, C.A. / DATE OF HEARING : 22 . 11 .201 6 / DATE OF P RONOUNCEMENT : 23 . 11 .201 6 / O R D E R PER BENCH: THESE ELEVEN APPEALS FILED BY THE REVENUE PERTAIN TO DIFFERENT ASSESSEES ARE DIRECTED AGAINST DIFFERENT ORDERS OF THE LD. I.T.A. NO S . 2456 TO 2466 /M/ 16 3 COMMISSIONER OF INCOME TAX (APPEALS) 3 , COIMBATORE FOR DIFFERENT ASSESSMENT YEARS. THE ONLY C OMMON ISSUE RAISED IN ALL THE APPEALS OF THE REVENUE IS THAT THE LD. CIT(A) HAS ERRED IN ALLOWING DEDUCTION UNDER SECTION 80 - IA OF THE INCOME TAX ACT, 1961 [ ACT IN SHORT]. SINCE COMMON ISSUE HAS BEEN RAISED IN THE APPEALS AND HEARD TOGETHER IS BEING DISP OSED OF BY THIS COMMON ORDER FOR SAKE OF BREVITY. 2 ALL T HE ASSESSEE S ARE COMMONLY ENGAGED IN THE BUSINESS OF GENERATING POWER THROUGH WIND MILL AND OTHER MANUFACTURING ACTIVITIES SUCH AS YARN, POLYESTER STAPLE FIBRE, EXPORT OF GARMENTS, ETC. ALL THE A SSESSEES HAVE FILED THEIR RETURNS OF INCOME AFTER CLAIMING DEDUCTION UNDER SECTION 80IA OF THE ACT IN RESPECT OF WINDMILL . THE CASE S W ERE TAKEN UP FOR SCRUTINY THROUGH CASS AND ASSESSMENT UNDER SECTION 143(3) OF THE ACT WAS COMPLETED, WHEREIN, THE ASSESSIN G OFFICER HAS DISALLOWED THE DEDUCTION UNDER SECTION 80 - IA OF THE ACT ON WINDMILLS. 2 .2 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 REL YING 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]. I.T.A. NO S . 2456 TO 2466 /M/ 16 4 HOWEVER THE ASSESSING OFFICER OPINED THAT SINCE THE REVENUE IS IN APPEAL AND THE MATTER IS PENDING BEFORE THE HON. APEX COURT, HE IS JUSTIFIED IN DISALLOWING THE CLAIM OF DEDUCTION OF UNDER SECTION 80 - IA OF THE ACT FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. 3 . ON APPEAL BY THE ASSESSEE, L D.CIT (A) DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY FOL LOWING THE DECISION OF THE JURISDICTIONAL 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 BUSINE SS WHERE THE ONLY SOURCE OF INCOME OF THE ASSESSEE DURING THE PREVIOUS YEAR RELEVANT TO THE INITIAL ASSESSMENT 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 SECTION 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 LOS SES OF THE EARLIER YEARS WHICH HAD ALREADY BEEN SET OFF AGAINST THE OTHER INCOME CANNOT BE NOTIONALLY CARRY FORWARD AND TAKEN INTO I.T.A. NO S . 2456 TO 2466 /M/ 16 5 CONSIDERATION FOR THE PURPOSE OF COMPUTATION OF DEDUCTION UNDER SECTION 80 - IA OF THE ACT. 4 . BEFORE US, BY RELYING ON THE ASSESSMENT ORDER THE L D. DR SUBMITTED THAT THE ASSESSING 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 I S PENDING. THE L D. A.R. ON THE OTHER HAND, RELI ED ON THE DECISION OF THE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF VELAYUDHASWAMY SPINNING MILLS (P) LTD. (SUPRA) AN D PRAYED THAT THE ORDER OF THE L D. CIT(A) MAY BE UPHELD. 5. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY PERUSED THE MATERIALS AV AILABLE ON RECORD. FROM THE FACTS OF THE CASE IT APPEARS THAT THE ASSESSING OFFICER WAS OF THE VIEW THAT SINCE THE REVENUE H AS PREFERRED AN 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 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 VELAYUDHASWAMY SPINNING MILLS P. LTD (SUPRA) IS STAYED BY THE HON BLE I.T.A. NO S . 2456 TO 2466 /M/ 16 6 APEX COURT. IT IS PERTINENT TO MENTION THAT IN THE ABSENCE OF ANY STAY GRANTED BY THE HON BLE APEX COURT AGAINS T 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 DECIS ION 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). 6 . IN T HE RESULT, ALL THE APPEAL S OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED ON THE 23 RD NOVEMBER , 2016 AT CHENNAI. SD/ - SD/ - (A. MOHAN ALANKAMONY ) ACCOUNTANT MEMBER ( DUVVURU RL REDDY ) JUDICIAL MEMBER CHENNAI, DATED, THE 23 . 11 .201 6 VM/ - / COPY TO: 1. / APPELLANT , 2. / RESPONDENT , 3. ( ) / CIT(A) , 4. / CIT , 5. / DR & 6. / GF.