ACIT, Coimbatore V. Shri S. Martin, Coimbatore

ITA 2554/CHNY/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7880 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 31-08-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SHIVA SRINIVAS
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL BENCH A, CHENNAI , . ' #, $ #% BEFORE SHRI SANJAY ARORA, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER ./ ITA NO.2554/MDS/2016 $ ' (' / ASSESSMENT YEAR : 2012-13 ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2, INCOME TAX BUILDING, RACE COURSE ROAD, COIMBATORE 641 018. (*+/ APPELLANT ) VS. S.MARTIN, NO.355-359, DAISY PLAZA, 6 TH STREET, GANDHIPURAM, COIMBATORE 641 011. [ PAN: AEWPM 3703 Q ] (,-*+/ RESPONDENT ) *+ . / / APPELLANT BY : SHRI SHIVA SRINIVAS, JCIT ,-*+ . / /RESPONDENT BY : SHRI SAROJ KUMAR PARIDA , ADVOCATE ' . 0 /DATE OF HEARING : 07.12.2016 1( . 0 /DATE OF PRONOUNCEMENT : 07.12.2016 / O R D E R PER SANJAY ARORA, ACCOUNTANT MEMBER : THIS IS AN APPEAL BY THE REVENUE DIRECTED AGAINST T HE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS)-I, COIMBATORE ( CIT(A) FOR SHORT) DATED 27.05.2016, PARTLY ALLOWING THE ASSESSEES APPEAL C ONTESTING ITS ASSESSMENT U/S. 143(3) OF THE INCOME TAX ACT, 1961 (THE ACT HEREIN AFTER) DATED 20.03.2015 FOR ASSESSMENT YEAR (AY) 2012-13. 2 ITA NO.2554/MDS/2016 ACIT V. S.MARTIN 2. TO BEGIN WITH, WE OBSERVE AN EIGHT DAY DELAY IN T HE FILING OF THE APPEAL BY THE REVENUE. THE SAME IS EXPLAINED PER AN AFFIDAVIT DATED 30.06.2016, STATING THE SAME TO BE ON ACCOUNT OF THE RELEVANT RECORD BEING UNDER TRANSIT, AND THUS RECEIVED LATE FROM THE HIGHER AUTHORITIES. WE FIND THE EXPLA NATION, CONSIDERING THE EXTENT OF DELAY, REASONABLE, EVEN AS THE LD. AUTHORIZED REPRE SENTATIVE (AR) DID NOT RAISE ANY OBJECTION IN THE MATTER. THE DELAY IS ACCORDINGLY CO NDONED. 3. THE ONLY ISSUE IN THE INSTANT APPEAL IN THE INI TIAL ASSESSMENT YEAR FOR THE PURPOSE OF COMPUTATION OF DEDUCTION U/S. 80-IA. WHI LE THE REVENUE REGARDS IT AS AY 2005-06, BEING THE YEAR OF COMMENCEMENT OF PRODU CTION, THE ASSESSEE CONTENDS IT TO BE AY 2010-11, I.E., THE YEAR WHICH THE ASSESSEE, AT ITS OPTION, HAS CHOSEN AS A FIRST YEAR FOR THE CLAIM OF DEDUCTION U /S. 80-IA, AND FROM WHICH YEAR ONWARDS IT SHALL THEREFORE CONTINUOUSLY CLAIM THE S AME DURING THE TAX HOLIDAY PERIOD. THE SAME BECOMES RELEVANT AS U/S. 80-IA(5) T HE QUANTUM OF DEDUCTION FOR THE YEAR IMMEDIATELY SUCCEEDING THE INITIAL ASSESSM ENT YEAR OR ANY SUBSEQUENT YEAR IS TO BE ON THE BASIS THAT THE ELIGIBLE BUSINESS, I .E., WHICH QUALIFIES FOR DEDUCTION, IS THE ONLY SOURCE OF INCOME OF THE ASSESSEE FOR THE I NITIAL ASSESSMENT YEAR AND EVERY SUBSEQUENT YEAR FOR WHICH THE DEDUCTION IS BEING CL AIMED. THE LD. CIT(A) HAS ACCEPTED THE ASSESSEES STAND FOLLOWING THE DECISIO N BY THE HON'BLE JURISDICTIONAL HIGH COURT IN VELAYUDHASWAMY SPINNING MILLS (P.) LTD. & OTHRS. V. ACIT [2012] 340 ITR 477 (MAD), SO THAT, AGGRIEVED, THE REVENUE I S IN APPEAL. 4. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. WE OBSERVE THAT THE QUESTION OF THE INITIAL ASSESSMENT YEAR WA S NOT IN DISPUTE IN VELAYUDHASWAMY SPINNING MILLS (P.) LTD. & OTHRS. (SUPRA) , WITH THE HON'BLE HIGH COURT OBSERVING THAT THE DEPARTMENT HAVING NOT DISP UTED THE FINDING OF THE FIRST APPELLATE AUTHORITY AS TO THE INITIAL ASSESSMENT YE AR, IT IS NOT ENTITLED TO DO SO IN THE ASSESSEES APPEAL. THE SAME MAY THUS NOT BE OF MUCH ASSISTANCE IN THE PRESENT CASE. BE THAT AS IT MAY, THE REVENUE HAS PER ITS CI RCULAR NO.1/2016 DATED 15.02.2016 (COPY ON RECORD), CATEGORICALLY CLARIFIE D THAT THE TERM INITIAL 3 ITA NO.2554/MDS/2016 ACIT V. S.MARTIN ASSESSMENT YEAR IN S.80-IA WOULD BE THE FIRST YEAR OPTED BY THE ASSESSEE FOR CLAIMING DEDUCTION THERE-UNDER. THE TOTAL NUMBER OF YEARS FOR CLAIMING DEDUCTION SHOULD NOT TRANSGRESS THE PRESCRIBED SLAB OF 15 OR, AS THE CASE MAY BE, 20 YEARS, AND FOR WHICH PERIOD THE CLAIM SHOULD BE AVAILED IN CON TINUITY. THIS ALSO AGREES WITH OUR UNDERSTANDING OF THE PROVISION. THE SAME SHOUL D IN OUR VIEW SETTLE THE DISPUTE; THE CIRCULARS BY THE BOARD BEING BINDING ON THE REV ENUE AUTHORITIES, WITH ITS COUNSEL/REPRESENTATIVE BEING ADVISED THEREBY NOT TO CONTEST THE SAME. THE ASSESSEES CLAIM WITH REGARD TO THE INITIAL ASSESSM ENT YEAR BEING THE FIRST YEAR FOR THE CLAIM OF DEDUCTION U/S. 80-IA IS THUS UPHELD, A ND THE ASSESSING OFFICER DIRECTED TO COMPUTE THE DEDUCTION FOR THE CURRENT YEAR U/S. 80-IA(1) R/W S.80- IA(5) ACCORDINGLY, OF COURSE HAVING REGARD TO THE DECISIO N IN VELAYUDHASWAMY SPINNING MILLS (P.) LTD. & OTHRS. (SUPRA). WE DECIDE ACCORDINGLY. 5. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED ON T HE AFORESAID TERMS. ORDER PRONOUNCED ON DECEMBER 07, 2016 . SD/- SD/- ( . ' #) ( ) ( G. PAVAN KUMAR ) ( SANJAY ARORA ) $ / JUDICIAL MEMBER / ACCOUNTANT MEMBER / CHENNAI, 3 / DATED, DECEMBER 7, 2016 . EDN. 4 . ,$056 76(0 / COPY TO: 1. *+ / APPELLANT 2. ,-*+ / RESPONDENT 3. ' 80 () / CIT(A) 4. ' 80 / CIT, 5. 6 9: ,$0$ / DR 6. :;' < / GF. 4 ITA NO.2554/MDS/2016 ACIT V. S.MARTIN