The ACIT,1(1), V. M/s HEG Ltd.,

ITA 336/IND/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 2917 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 9 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2010
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 29-04-2010
• Assessment Year: 2000-2001
• Appeal Filed On: 21-07-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D K DAS SHARMA
• Assessee Lawyers: M C MEHTA; H CHIMNANI CAS
• Keywords: Depreciation; Unabsorbed depreciation; Set aside; Capital Gains
• Section: 80IA; 2

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI V.K. GUPTA, ACCOUNTANT MEMBER ITA NO.336/IND/2008 A.YS. 2000-2001 ASSISTANT COMMISSIONER OF INCOME-TAX 1(1) BHOPAL APPELLANT VS HEG LIMITED MANDIDEEP PAN AAACH6184K RESPONDENT DEPTT. BY : SHRI D.K. DAS SHARMA, CIT, DR ASSESSEE BY: S/SHRI M.C. MEHTA & H.CHIMNANI , CAS O R D E R PER JOGINDER SINGH, JM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-I, BHOPAL, DATED 28.4.2008 ON THE GROUND THA T ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED COMMI SSIONER OF INCOME-TAX (APPEALS) ERRED IN DELETING THE ADDITION S AMOUNTING TO RS.18,65,96,739/- ON ACCOUNT OF EXCESS DEDUCTION CL AIMED AND ALLOWED U/S 80IA OF THE INCOME TAX ACT AND ALLOWING THE DEDUCTION 2 U/S 80IA WITHOUT SETTING OFF THE UNABSORBED DEPRECI ATION AND LOSSES OF RS.10,40,14,569/-, RS.7,93,51,460/- AND RS.32,30,71 0/- OF PAST ASSESSMENT YEARS IN RESPECT OF POWER DIVISIONS AT T AWA, DURG AND RISHABDEV, CONTRARY TO THE PROVISIONS OF SECTION 80 IA(5) OF THE INCOME TAX ACT, 1961. 2. DURING HEARING, WE HAVE HEARD SHRI D.K. DAS SHAR MA, LD. CIT, DR AND SHRI M.C.MEHTA ALONG WITH SHRI HITESH CHIMNA NI, LD. COUNSEL FOR THE ASSESSEE. THE CRUX OF ARGUMENTS ON BEHALF OF THE REVENUE IS THAT THE ISSUE IS SQUARELY COVERED IN FA VOUR OF THE REVENUE BY THE ORDER DATED 31.3.2009 OF INDORE BENCH IN ACI T VS. M/S. HEG LTD. (ITA NO.490/IND/2007). LD. COUNSEL FOR THE ASS ESSEE FAIRLY CONCEDED THE SAME. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATERIAL AVAILABLE ON RECORD AND FOUND THAT IDENTICALLY THE INDORE BENCH OF THE TRIBUNAL I N THE CASE OF ACIT VS. M/S. HEG LTD. (ITA NO.490/IND/2007) VIDE ORDER DATED 31.3.2009 DECIDED THE ISSUE IN FAVOUR OF THE REVENUE. THE REL EVANT PORTION OF THE ORDER IS REPRODUCED HEREUNDER: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-I, BHOPAL, DATED 9 TH JULY, 2007 3 FOR THE ASSESSMENT YEAR 2001-02 ON THE FOLLOWING GROUND :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN ALLOWING THE DEDUCTION UNDER SECTION 80IA OF THE INCOMETAX ACT WITHOUT SETTING OFF IF THE UNABSORBED DEPRECIATION OF RS.5,27,01,930/- OF PAST ASSESSMENT YEARS IN RESPECT OF POWER DIVISION DURG IN CONTRARY TO THE PROVISION OF SECTION 80IA(5) OF THE INCOMETAX ACT, 1961. 2 THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS) CONSIDERING THE SUBMISSIONS OF THE ASSESSEE ALLOWED THE CLAIM OF THE ASSESSEE. HIS FINDINGS ARE REPRODUCED AS UNDER : - I HAVE CONSIDERED THE SUBMISSIONS OF THE LD. COUNSEL CAREFULLY IN THIS REGARD. I HAVE ALSO PERUSED THE REASONS GIVEN BY THE ASSESSING OFFICER. AFTER DUE CONSIDERATION OF THE MATTER, I HOLD THAT THE A.O. WAS NOT JUSTIFIED IN THE APPELLANTS CASE TO REDUCE THE CLAIM OF DEDUCTION U/S 80IA BY RS. 5,27,01,930/- BEING UNABSORBED DEPRECIATION PERTAINING TO POWER DIVISION, DURG AS THE SAME WAS ALREADY SET OFF AGAINST THE INCOME OF THE OTHER DIVISIONS OF THE APPELLANT AND IN THE CURRENT ASSESSMENT YEAR THERE WAS NO BROUGHT FORWARD UNABSORBED DEPRECIATION. CONCURRING WITH THE JUDICIAL DECISIONS CITED BY THE LD. A.R. AND PARTICULARLY THE DIRECT RECENT DECISION OF THE HONBLE ITAT, MUMBAI BENCH IN THE CASE OF M. PALLONJI & CO. P. LTD. V. JCIT REPORTED IN 6 SOT 287 WHEREIN IT WAS HELD THAT UNABSORBED DEPRECIATION OF THE ELIGIBLE PROJECT CANNOT BE NOTIONALLY SET OFF AGAINST THE PROFITS OF THE ELIGIBLE BUSINESS FOR THE PURPOSE OF DEDUCTION U/S 80IA OF THE INCOMETAX ACT, WHICH UNABSORBED DEPRECIATION STOOD ALREADY ADJUSTED AGAINST PROFITS OF THE APPELLANT FROM OTHER BUSINESSES. IN THE CIRCUMSTANCES, THE 4 APPEAL ON THIS POINT IS ALLOWED. 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS) ALLOWED RELIEF TO THE ASSESSEE BY FOLLOWING THE ORDER OF ITAT, MUMBAI BENCH IN THE CASE OF PALLONJI & CO. PVT. LTD. (SUPRA). THE LEARNED COUNSEL FOR THE ASSESSEE HOWEVER, FAIRLY CONCEDED THAT THE ISSUE IS NOW SQUARELY COVERED AGAINST THE ASSESSEE BY THE ORDER OF ITAT, MUMBAI BENCH (TM) IN THE CASE OF GUJARAT AMBUJA CEMENT LIMITED V. DCIT; 120 TTJ 883 IN WHICH IT WAS HELD CONCLUSION: AGGREGATE OF BROUGHT FORWARD UNABSORBED LOSSES, DEPRECIATION AND INVESTMENT ALLOWANCE RELATING TO THE ELIGIBLE INDUSTRIAL UNDERTAKING SET OFF IN ASSESSMENT YEARS 1988-89 TO 1991-92 AGAINST INCOME OF ASSESSEE FROM INTEREST, CAPITAL GAINS AND DIVIDEND WHICH IS NEITHER INCOME DERIVED FROM NOR ATTRIBUTABLE TO ELIGIBLE INDUSTRIAL UNDERTAKING ARE REQUIRED TO BE REDUCED AS PER S. 80-I(6) FROM CURRENT YEARS PROFI TS DERIVED BY THE ASSESSEE FROM ITS ELIGIBLE INDUSTRIAL UNDERTAKING FOR THE PURPOSE OF COMPUTING DEDUCTION UNDER S. 80-I(1). 4. CONSIDERING THE FINDING OF THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS) IN THE LIGHT OF THE ABOVE DECISION, WE FIND THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE REVENUE BY THE DECISION OF THE ITAT, MUMBAI BENCH (TM ) BENCH IN THE CASE OF GUJARAT AMBUJA CEMENT LIMITED (SUPRA). THE DECISION OF THIRD MEMBER BENCH HAS EQUAL FORCE AS THAT OF THE DECISION OF THE SPECIAL BENCH. THEREFORE, THE DECISION RELIED UPON BY THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS) OF THE DIVISION BENCH OF ITAT, MUMBAI BENCH COULD NOT BE APPLICABLE TO THE CASE OF THE ASSESSEE. THE LEARNED COUNSEL FOR THE ASSESSEE HAS CONCEDED THAT THE ISSUE IS SQUARELY COVERED AGAINST THE ASSESSEE BY THE ABOVE DECISION OF THE ITAT (TM ). IN THIS VIEW OF THE MATTER, WE SET ASIDE THE ORDER OF THE LEARN ED 5 COMMISSIONER OF INCOMETAX (APPEALS) AND RESTORE THE ORDER OF THE ASSESSING OFFICER. 5. AS A RESULT, THE DEPARTMENTAL APPEAL IS ALLOWED . ORDER PRONOUNCED IN OPEN COURT ON 31 ST MARCH, 2009. IN THE LIGHT OF THE AFORESAID ORDER AND ALSO THE A SSERTION/ADMISSION OF BOTH SIDES THAT THE IMPUGNED ISSUE IS SQUARELY COVERED B Y THE AFORESAID DECISION IN FAVOUR OF THE REVENUE, THEREFORE, THIS APPEAL OF TH E REVENUE IS ALLOWED.. RESULTANTLY, THE APPEAL OF THE REVENUE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30.4.2010. SD SD (V.K. GUPTA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 30.4.2010 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, G UARD FILE !VYAS!