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ITA 41/CHNY/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7558 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 1 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-03-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 09-06-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 08-01-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M.SHIVA SRINIVAS
• Keywords: Depreciation; Unabsorbed depreciation
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 143(3); 92; 10B; 139(1)

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.41 & 42/MDS/2016 & ( ')( / ASSESSMENT YEAR : 2008-09 & 2009-10 ADSORBENT CARBONS PVT. LTD. C-92, SIPCOT INDUSTRIAL COMPLEX, TUTICORIN 628 008. [PAN: AABCV 0223A] ( *+ /APPELLANT) VS. INCOME TAX OFFICER, WARD-I, TUTICORIN. ( ,-*+ /RESPONDENT) *+ . / /APPELLANT BY : SHRI R.VIJAYARAGHAVAN, ADVO CATE ,-*+ . / /RESPONDENT BY : SHRI M.SHIVA SRINIVAS, JT. CIT $ ' . 0 /DATE OF HEARING : 08.12.2016 1) . 0 /DATE OF PRONOUNCEMENT : 06.03.2017 /O R D E R PER SANJAY ARORA, AM : THIS IS A SET OF TWO APPEALS BY THE ASSESSEE ARISI NG OUT OF A COMMON ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS)-1, MADU RAI DATED 08.10.2015, DISMISSING THE ASSESSEES APPEAL CONTESTING ITS AS SESSMENT U/S. 143(3) OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) FOR AS SESSMENT YEARS (AYS) 2008- 09 & 2009-10 DATED 28.12.2012 AND 29.12.2011 RESPEC TIVELY. 2. THE ASSESSEE COMPANY, IN THE BUSINESS OF MANUFA CTURING AND EXPORT ACTIVATED CARBONS, THROUGH A 100% EXPORT ORIENTED U NIT (EOU), FILED ITS RETURN OF 2 ITA NO.41 & 42/MDS/2016 (AY 2008-09 & 2009-10) ADSORBENT CARBONS PVT. LTD. V. ITO INCOME FOR THE RELEVANT YEARS WITH THE TIME SPECIFI ED U/S. 139(1) OF THE ACT, CLAIMING DEDUCTION U/S. 10B OF THE ACT AT . 10,24,407/- AND . 67,57,158/-, FOR THE TWO CONSECUTIVE YEARS RESPECTIVELY. IN DOIN G SO, THE BROUGHT FORWARD UNABSORBED DEPRECIATION AND UNABSORBED BUSINESS LOS S FOR THE EARLIER YEARS, I.E., AYS 2003-04 TO 2006-07, WAS NOT ADJUSTED (SET OFF). THIS CONSTITUTES THE BONE OF CONTENTION BETWEEN THE PARTIES, WITH THE REVENUE CL AIMING THE SAME AS NOT IN CONSONANCE WITH THE PROVISION OF S. 10B AS SUBSTITU TED BY FINANCE ACT, 2000 W.E.F 01.04.2001, AND AS FURTHER AMENDED BY FINANC E ACT, 2001 AND FINANCE ACT, 2002. THE EFFECT OF THESE AMENDMENTS, IN ITS V IEW, HAS BEEN TO, NOTWITHSTANDING ITS CONTINUED PLACEMENT IN CHAPTER- III OF THE ACT, CONVERT IT INTO A DEDUCTION PROVISION. THE INCOME OF SUCH AN U NDERTAKING SHALL ENTER THE COMPUTATION PROCESS, I.E., FOR THE TOTAL INCOME AS DEFINED U/S. 2(45) OF THE ACT, AND IF, UPON AGGREGATION UNDER CHAPTER-VI, ADJUSTIN G THE BROUGHT FORWARD LOSSES, ANY INCOME SURVIVES, THE SAME SHALL, WHERE INCLUDING ANY INCOME DERIVED FROM AN ELIGIBLE UNDERTAKING, BE DEDUCTIBLE U/S. 10B, IN ACCORDANCE WITH THE PROVISIONS OF THE SAID SECTION. THIS SUMS UP TH E REVENUES CASE, DISALLOWING THE CLAIM FOR DEDUCTION U/S. 10-B AS NO INCOME SURV IVED THE ADJUSTMENT (SET OFF) OF BROUGHT FORWARD UNABSORBED DEPRECIATION AND BUSI NESS LOSS U/C. VI OF THE ACT, PLACING RELIANCE ON CIT V. HIMATASINGIKE SEIDE LTD. [2006] 286 ITR 255 (KAR), SLP AGAINST WHICH STANDS DISMISSED BY THE AP EX COURT. AGGRIEVED, THE ASSESSEE IS IN APPEAL. 3. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. SUBSEQUENT TO THE HEARING, THE LD. COUNSEL FOR THE ASSESSEE, SHRI R.VIJAYARAGHAVAN, BROUGHT THE DECISION BY THE APEX COURT IN THE CASE OF CIT V. YOKOGAWA INDIA LTD. & OTHERS (IN CIVIL APPEAL NO. 8498/13 DATED 16.12.2016) TO OUR NOTICE. BEING BY THE HON'BLE APEX COURT, BIN DING ON ALL THE COURTS AND TRIBUNALS IN INDIA, THE SAME WAS ADMITTED AND THE R EVENUE ALLOWED TIME TO RESPOND, IF SO DESIRED. NO RESPONSE HAS BEEN RECEIV ED TO DATE. WE ACCORDINGLY 3 ITA NO.41 & 42/MDS/2016 (AY 2008-09 & 2009-10) ADSORBENT CARBONS PVT. LTD. V. ITO PROCEED TO DECIDE THESE APPEALS TAKING INTO ACCOUNT THE SAID DECISION. THE SAME IS SQUARELY ON THE POINT. THE HON'BLE APEX COURT, W HILE AGREEING THAT SS. 10A AND 10B OF THE ACT ARE NO LONGER EXEMPTION PROVISIO NS, MAKES IT ABUNDANTLY CLEAR THAT THE SAME (DEDUCTION) IS TO BE RECKONED O N A STAND ALONE BASIS, I.E., QUA THE INCOME OF THE UNDERTAKING ALONE, WITHOUT ANY RE FERENCE TO THE INCOME OF ANY OTHER ELIGIBLE OR NON ELIGIBLE UNIT OF THE ASSE SSEE. AND, FURTHER, THAT THE STAGE OF DEDUCTION THERE-UNDER SHALL BE WHILE COMPUTING T HE GROSS TOTAL INCOME UNDER CHAPTER-IV OF THE ACT AND NOT AT THE STAGE OF COMPU TING THE TOTAL INCOME UNDER CHAPTER-VI OF THE ACT. THE WORDS FROM THE TOTAL IN COME OF THE ASSESSEE OCCURRING IN S.10B(1) WERE CONSIDERED BY IT AS MADE DISCORDANTLY, AND WERE ACCORDINGLY READ BY IT TO IMPLY THE TOTAL INCOME O F THE UNDERTAKING, I.E., AS USED IN FIRST PROVISO TO S.10B(1). THE DEDUCTION U/S. 10B(1) SHALL BE WO RKED OUT ACCORDINGLY, I.E., PRIOR TO SETTING OFF THE UNABSOR BED BUSINESS LOSS AND DEPRECIATION OF THE ASSESSEES ELIGIBLE UNDERTAKING FOR THE ASSESSEMENT YEAR 2001-02 AND SUBSEQUENT ASSESSMENT YEARS. THE AO SHA LL PROFILE THESE LOSSES SEPARATELY. WE DECIDE ACCORDINGLY. 4. IN THE RESULT, THE ASSESSEES APPEALS ARE ALLOWE D. ORDER PRONOUNCED ON MARCH 06, 2017 AT CHENNAI . SD/- SD/- ( . ' $ % ) ( ) (G. PAVAN KUMAR) (SANJAY ARORA) & ! /JUDICIAL MEMBER ! /ACCOUNTANT MEMBER /CHENNAI, 2 /DATED, MARCH 6 TH , 2017. EDN 3 . ,&045 65)0 /COPY TO: 1. *+ /APPELLANT 2. ,-*+ /RESPONDENT 3. $ 70 ( )/CIT(A) 4. $ 70 /CIT 5. 5'89 ,&0& /DR 6. 9:( ; /GF