DCIT, Virudhunagar V. VTM Ltd., Virudhunagar

ITA 2832/CHNY/2014

• Counselvise Citation: 283221714 RSA 2014
• Duration Of Justice: 3 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 16-02-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 17-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S DAS GUPTA IRS
• Assessee Lawyers: R SRINIVASAN
• Keywords: Depreciation; Question of law; Unabsorbed depreciation
• Section: 143(3); 2

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . , . . , ! ' BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER & SHRI S.S. GODARA, JUDICIAL MEMBER ./ I.T.A. NO.2832/MDS/2014 ( / ASSESSMENT YEAR : 2010-2011) THE DCIT, CIRCLE I, VIRUDHUNAGAR. ( #$ /APPELLANT) VS M/S. VTM LIMITED, SULAKARI, VIRUDHUNAGAR 626 001. [PAN:AAACV 3775E] ( %&#$ /RESPONDENT) / APPELLANT BY : SHRI. S. DAS GUPTA, IRS, JCIT. / RESPONDENT BY : SHRI. R. SRINIVASAN, ADVOCATE /DATE OF HEARING : 16.02.2015 ! /DATE OF PRONOUNCEMENT : 27.02.2015 ' / O R D E R PER S.S. GODARA, JUDICIAL MEMBER THIS REVENUES APPEAL FOR ASSESSMEN T YEAR 2010-11; EMANATES FROM ORDER DATED 08.08.2014 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)-II, MADURAI IN ITA NO. 25/13-1 4, ALLOWING I.T.A.NO.2832/MDS/2014 :- 2 -: SECTION 80IA DEDUCTION OF E2,13,77,557/-, IN PROCEE DINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 [IN SHORT THE ACT]. 2. THE ASSESSEE/COMPANY IS ENGAGED IN TEXTILE BUSINESS . IT HAD FILED ITS RETURN ON 22.09.2010 STATING INCOME OF E5,20,99,116/-. THE SAME WAS SUMMARILY PROCESSED. 3. THE ASSESSING OFFICER TOOK UP SCRUTINY. HE INTER -ALIA NOTICED THE ASSESSEE CLAIMING SECTION 80IA DEDUCTION OF E2 ,13,77,557/- FOR ITS THREE WINDMILLS. TWO OF THEM WERE INSTALLED IN A SSESSMENT YEAR 2005-06. THE THIRD ONE IN ASSESSMENT YEAR 2006-2007 . IT HAD CHOSEN THE IMPUGNED ASSESSMENT YEAR AS INITIAL ASSESSMENT YEAR FOR CLAIMING THE SAID DEDUCTION. THE CASE LAW OF M/S. VELAYUTHA SWAMY SPINNING MILLS VS. ACIT, 340 ITR 477 WAS ALSO QUOTED. THE ASSESSING OFFICER IN ASSESSMENT ORDER 22.03.2013 REFERRED TO SECTION 80I A (5) OF THE ACT AND OBSERVED THAT WIND MILLS TREATED AS SEPARATE UN ITS DID NOT GIVE RISE TO ANY POSITIVE INCOME AFTER SETTING OFF UNABSORBE D DEPRECIATION FROM THE YEARS OF INSTALLATION. HE OBSERVED THAT THE RE VENUES SPECIAL LEAVE PETITION IS PENDING BEFORE THE HONBLE APEX COURT. THE ASSESSEES ALTERNATIVE PLEA OF SEGREGATING WINDMILLS AS PER RE SPECTIVE YEARS OF I.T.A.NO.2832/MDS/2014 :- 3 -: INSTALLATION ALSO STOOD DECLINED. THIS RESULTED IN THE IMPUGNED DISALLOWANCE OF E2,13,77,557/-. 4. THE ASSESSEE PREFERRED AN APPEAL. THE CIT(A) HAS FOLLOWED THE AFORESAID CASE LAW AND HIS ORDERS IN PRECEDING ASSE SSMENT YEARS FOR TREATING THE ASSESSEE ELIGIBLE FOR SECTION 80IA DED UCTION . THEREFORE, THE REVENUE IS IN APPEAL. 5. WE HAVE HEARD BOTH SIDES AND PERUSED THE REVENUES FINDINGS. THERE IS NO DISPUTE ON FACTS. THE ASSESSEE HAS NOT CLAIMED SECTION 80IA DEDUCTION IN THE YEARS OF INSTALLATION (SUPRA ) OF THE WINDMILLS. THE IMPUGNED ASSESSMENT YEAR HAS BEEN TREATED AS I NITIAL ASSESSMENT YEAR FOR CLAIMING SECTION 80IA RELIEF. THE REV ENUE SEEKS TO SET OFF UNABSORBED DEPRECIATION FROM THE YEARS OF INSTALLA TION ONWARDS AGAINST THE PROFITS OF THE INITIAL ASSESSMENT YEAR I.E. THE IMPUGNED ASSESSMENT YEAR. WE FIND THAT THE HONBLE JURISDICT IONAL HIGH COURT HAS DECIDED THE VERY SUBSTANTIAL QUESTION OF LAW IN THE ASSESSEES FAVOUR. THE SAME VIEW IS REITERATED IN A RECENT DE CISION (2015) 371 ITR 1 (MADRAS) CIT VS. EASTERN EXPORTS GLOBAL CLOTH ING PRIVATE LIMITED. WE DRAW SUPPORT THEREFROM AND UPHOLD THE ORDER UNDE R CHALLENGE. THE REVENUES GROUND IS REJECTED. I.T.A.NO.2832/MDS/2014 :- 4 -: . 6. THE REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED ON FRIDAY, THE 27TH OF F EBRUARY, 2015, AT CHENNAI. SD/- SD/- ( . ) (A.MOHAN ALANKAMONY) / ACCOUNTANT MEMBER ( . . ) (S.S. GODARA) ! / JUDICIAL MEMBER '# /CHENNAI. $% /DATED:27.02.2015. KV %& '( )( /COPY TO: 1. * APPELLANT 2. / RESPONDENT 3. + ( )/CIT(A) 4. + /CIT 5. (,- . /DR 6. -/ 0 /GF.