DCIT, Coimbatore V. Bannari Amman Sugars Limited, Coimbatore

ITA 321/CHNY/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 90641 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2015
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 20-07-2015
• Assessment Year: 2011-2012
• Appeal Filed On: 05-02-2015
• Court: TRIBUNAL
• Department Lawyers: P B SEKARANCIT
• Keywords: Depreciation; Revised return; Unabsorbed depreciation

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . , . ! '# , $ % BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI V. DURGA RAO, JUDICIAL MEMBER ./ I.T.A.NO.321/MDS/2015 ( / ASSESSMENT YEAR : 2011-12) DEPUTY COMMISSIONER OF INCOME TAX, COMPANY CIRCLE-I, 63-A RACE COURSE ROAD, COIMBATORE. VS. M/S.BANNARI AMMAN SUGARS LTD., NO.1212,TRICHY ROAD, COIMBATORE 641 018. PAN AAACB 8933 G ( &' / APPELLANT ) ( ()&' / RESPONDENT ) / APPELLANT BY : MR.P.B.SEKARAN,CIT D.R / RESPONDENT BY : MR.SAROJ KUMAR PARIDA, ADVOCATE / DATE OF HEARING : 20.07.2015 ! /DATE OF PRONOUNCEMENT : 22.07.2015 * / O R D E R PER A.MOHAN ALANKAMONY , ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE REVENUE, AGGRIEVED BY T HE ORDER DATED 27.11.2014 OF THE LEARNED COMMISSIONER OF INCOME TA X(A)-1, ITA NO. 321MDS/15 2 COIMBATORE PASSED UNDER SECTION-143(3) READ WITH SECTION 250 OF THE ACT IN APPEAL NO.477/13-13 FOR ASSESSMENT YEA R 2011-12. 2. THE REVENUE HAS RAISED SEVEN GROUNDS IN ITS APP EAL, HOWEVER THE CRUX OF THE ISSUE IS THAT THE REVENUE IS AGGRIE VED BY THE ORDER OF THE LD. CIT (A), WHO HAD ERRED IN ALLOWING DEDUCTIO N U/S 80-IA OF THE ACT FOLLOWING THE DECISION OF THE HONBLE JURISDICT IONAL HIGH COURT IN THE CASE OF VELAYUDHASWAMY SPINNING MILLS (P) LTD V S. ACIT REPORTED IN 231 CTR (MAD.) 368 THOUGH THE SLP FILED BY THE REVENUE BEFORE THE HONBLE APEX COURT IS PENDING. IN THE DE CISION OF THE HONBLE JURISDICTIONAL HIGH COURT IT WAS HELD AS FO LLOWS:- I) EACH ELIGIBLE UNIT OF THE INDUSTRIAL UNDERTAKIN G HAS TO BE CONSIDERED AS IF SUCH ELIGIBLE BUSINESS WHERE THE ONLY SOURCE OF INCOME OF THE ASSESSEE DURING THE PREVIOUS YEAR RELEVANT TO THE I NITIAL ASSESSMENT YEAR AND TO EVERY SUBSEQUENT ASSESSMENT YEAR UPTO T HE PERIOD PRESCRIBED UNDER THE ACT FOR THE BENEFIT OF SECTION 80IA OF THE ACT. II) THAT THE INITIAL ASSESSMENT YEAR REFERRED TO SE CTION-80-IA(5) OF THE ACT WOULD MEAN THE YEAR IN WHICH THE ASSESSEE OPTS IN SELECTING THE YEAR OF CLAIMING RELIEF U/S.80-IA OF THE ACT. ITA NO. 321MDS/15 3 III) THAT THE UNABSORBED DEPRECIATION AND CARRY FO RWARD LOSSES OF THE EARLIER YEARS WHICH HAD ALREADY BEEN SET OFF AGAINS T THE OTHER INCOME CANNOT BE NOTIONALLY CARRY FORWARD AND TAKEN INTO C ONSIDERATION FOR THE PURPOSE OF COMPUTATION OF DEDUCTION U/S.80-IA O F THE ACT. 3. THE ASSESSEE IS A COMPANY, ENGAGED IN THE BUSI NESS OF MANUFACTURING OF SUGAR, ALCOHOL, GRANITE AND CO-GEN ERATION OF POWER, FILED ITS REVISED RETURN OF INCOME FOR THE ASSESSME NT YEAR 2011-12 ON 21.09.2011 ADMITTING LOSS OF ` 5,59,12,378/-. THE CASE WAS TAKEN FOR SCRUTINY AND ASSESSMENT U/S.143(3) WAS COMPLETED ON 31.01.2014 WHEREIN THE LD. A.O DISALLOWED THE DEDUCTION U/S. 8 0-IA OF THE ACT ON WINDMILLS. 3.1. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS OBSERVED BY THE LD. ASSESSING OFFICER THAT THE ASSESSEE HAD CLAIMED THE DEDUCTION U/S.80-IA OF THE ACT RELYING UPON THE DEC ISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEARS 2004-05, 2005-06, 2006-07 & 2007-08 AND ALSO THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF VELAYUDHAS WAMY SPINNING MILLS (P) LTD VS. ACIT REPORTED IN 231 CTR (MAD) 36 8 [2010]. ITA NO. 321MDS/15 4 HOWEVER THE LD. A.O OPINED THAT SINCE THE REVENUE I S IN APPEAL AND THE MATTER IS PENDING BEFORE THE HON. APEX COURT, H E IS JUSTIFIED IN DISALLOWING THE CLAIMED OF DEDUCTION OF ` 31,82,53,690/- TOWARDS THE WINDMILL DIVISION U/S.80-IA OF THE ACT FOR THE A.Y 2011-12. 4. ON APPEAL BY THE ASSESSEE, LD.CIT (A) DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY FOLLOWING THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF VELAYUDHASWAMY SPINNING M ILLS (P) LTD VS. ACIT REPORTED IN 231 CTR (MAD) 368 [2010] AND THE D ECISION OF CHENNAI TRIBUNAL IN ASSESSEES OWN CASES FOR THE A SSESSMENT YEAR 2004-05 IN ITA NO.1162/MDS./2008 VIDE ORDER DATED 16 TH MARCH, 2009, FOR A.Y 2005-06 IN ITA NO.423/MDS./2009 VIDE ORDER DATED 5 TH MARCH, 2010 & FOR A.Y 2006-07 IN ITA NO.1196/MDS./2 009 VIDE ORDER DATED 26 TH AUGUST, 2011. 5. BEFORE US, THE LD. D.R ARGUED IN SUPPORT OF THE ORDER OF THE LD. ASSESSING OFFICER. LD. D.R FURTHER SUBMITTED THAT THE LD. ASSESSING OFFICER HAD ARRIVED AT THIS DECISION OUT OF ABUNDAN T CAUTION, BECAUSE THE REVENUE HAS CARRIED THE MATTER BEFORE THE HONB LE APEX COURT AND THE MATTER WAS PENDING. THE LD. A.R. ON THE OT HER HAND, RELIED ON THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT & THE DECISION ITA NO. 321MDS/15 5 OF TRIBUNAL IN ASSESSEES OWN CASE CITED SUPRA AND PRAYED THAT THE ORDER OF THE LD. CIT(A) MAY BE UPHELD. 6. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY PE RUSED THE MATERIALS AVAILABLE ON RECORD. FROM THE FACTS OF TH E CASE IT APPEARS THAT THE LD. ASSESSING OFFICER WAS OF THE VIEW THAT SINCE THE REVENUE WAS ON APPEAL AGAINST THE DECISION OF THE HONBLE M ADRAS HIGH COURT IN THE CASE VELAYUDHASWAMY SPINNING MILLS P. LTD (S UPRA) BEFORE THE HONBLE APEX COURT, HE NEED NOT FOLLOW THAT DECISIO N. 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 HONBL E MADRAS HIGH COURT. FURTHER, IT IS NOT THE CASE OF THE REVENUE THAT THE JUDGMENT OF THE HONBLE MADRAS HIGH COURT IN THE CASE VELAYUDHA SWAMY SPINNING MILLS P. LTD (SURPA) IS STAYED BY THE HON BLE APEX COURT. IT IS PERTINENT TO MENTION THAT IN THE ABSENCE OF ANY STAY GRANTED BY THE HONBLE APEX COURT AGAINST THE OPERATION OF THE JUD GMENT OF THE HONBLE MADRAS HIGH COURT, ALL THE LOWER JUDICIARIE S AS WELL AS QUASI JUDICIAL AUTHORITIES ARE BOUND TO FOLLOW THE DECISI ON OF THE HONBLE JURISDICTIONAL HIGH COURT. SINCE THE LD.CIT(A) HAS RIGHTLY FOLLOWED THE DECISION OF THIS TRIBUNAL IN ASSESSEES OWN CAS E CITED SUPRA AND ITA NO. 321MDS/15 6 THE DECISION OF THE JURISDICTIONAL HIGH COURT IN TH E CASE OF VELAYUDHASWAMY SPINNING MILLS (P) LTD VS. ACIT (SUP RA) AND HELD THE ISSUES IN FAVOUR OF THE ASSESSEE, WE DO NOT FIN D IT NECESSARY TO INTERFERE WITH THE ORDERS OF THE LD.CIT(A). THEREF ORE WE HEREBY CONFIRM THE ORDERS OF THE LD. LD. CIT (A). 7. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSE D. ORDER PRONOUNCED ON 22 ND JULY, 2015 AT CHENNAI. SD/- SD/- ( . ! '# ) (V. DURGA RAO) ( . ) (A.MOHAN ALANKAMONY) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 22 ND JULY, 2015. K S SUNDARAM. COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE