DCIT, Coimbatore V. Sree Narasimha Textiles Pvt. Ltd., Coimbatore

ITA 425/CHNY/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 90382 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-06-2015
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 20-05-2015
• Assessment Year: 2011-2012
• Appeal Filed On: 27-02-2015
• Court: TRIBUNAL
• Department Lawyers: JOE SEBASTIAN
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI ... , . , , BEFORE SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.425 /MDS./2015 ( !' #' / ASSESSMENT YEAR :2011-12) THE DY. COMMISSIONER OF INCOME TAX,CORPORATE CIRCLE -I 63-A,RACE COURSE ROAD, COIMBATORE. VS. M/S.SREE NARASIMHA TEXTILES PVT LTD .,NO.1,V.P.NAIDU STRET, AVINASH ROAD, COIMBATORE 641 018. PAN AAECS 1811 L ( / APPELLANT ) ( / RESPONDENT ) $% & ' / APPELLANT BY : MR.JOE SEBASTIAN, CIT D.R ()$% & ' / RESPONDENT BY : MR.SAROJ KUMAR PARIDA,ADVOCATE * + & ,- / DATE OF HEARING : 20.05.2015 .# & ,- /DATE OF PRONOUNCEMENT : 02.06.2015 / O R D E R PER A.MOHAN ALANKAMONY , ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE REVENUE, AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(A)-I, COIMBA TORE DATED 26.12.2014 IN ITA NO.406/2013-14 PASSED UNDER SEC. 143(3) READ WITH SECTION SEC. 250 OF THE ACT. ITA NO.425 /MDS/2015 2 2. THE REVENUE HAS RAISED FIVE ELABORATE GROUNDS I N ITS APPEAL, HOWEVER THE CRUX OF THE ISSUE IS THAT THE REVENUE I S AGGRIEVED BY THE ORDER OF THE LD. CIT (A), WHO HAD ERRED IN ALLOWING THE CLAIM OF DEDUCTION US/ 80-IA OF THE ACT ON WINDMILLS FOLLOWI NG THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE O F VELLAYUDHASWAMY SPINNING MILLS (P) LTD VS. ACIT REPORTED IN 231 CTR (MAD.) 368, THOUGH THE SLP FILED BY THE REVENUE BEFORE THE HON BLE APEX COURT IS PENDING. 3. THE ASSESSEE IS A PRIVATE LIMITED COMPANY, ENGA GED IN THE BUSINESS OF MANUFACTURING OF YEARN AND GENERATION O F ELECTRICITY, FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2011-1 2 ON 30.09.2011 ADMITTING INCOME OF ` 19,01,67,560/- UNDER NORMAL PROVISIONS AND BOOK PROFIT OF RS.33,39,43,032/- U/S.115JB. THE CA SE WAS TAKEN FOR SCRUTINY UNDER CASS AND ASSESSMENT WAS COMPLETED ON 31.12.2013 WHEREIN THE LD. A.O DISALLOWED THE BENEFIT OF SECTI ON 80-IA OF THE ACT ON WINDMILLS. ITA NO.425 /MDS/2015 3 3.1. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS OBSERVED BY THE LD. ASSESSING OFFICER THAT THE ASSESSEE HAD CLAIMED THE ENTIRE DEDUCTION RELAYING UPON THE DECISION OF THE CASE RE NDERED BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF VE LAYUDHASWAMY SPINNING MILLS (P) LTD VS. ACIT REPORTED IN 231 CTR (MAD) 368. THE LD. A.O. OPINED THAT SINCE THE REVENUE IS IN APPEAL AND THE MATTER IS PENDING BEFORE THE HON. APEX COURT, HE IS JUSTIFIED IN DISALLOWING THE AMOUNT OF ` 8,65,00,469/- CLAIMED AS DEDUCTION U/S. 80-IA OF TH E ACT AND ADDED BACK TO THE INCOME OF THE ASSESSEE. 4. ON APPEAL BY THE ASSESSEE, LD.CIT (A) DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY OBSERVING AS UNDER:- 4. THE APPELLANT HAS MADE DETAILED SUBMISSIONS IN THE GROUNDS OF APPEAL REGARDING THE ELIGIBILITY OF THE APPELLANT FOR DEDU CTION U/S 80-IA OF THE ACT. AS SEEN FROM THE FACTS, THE ASSESSEE HAS INSTALLED ONE WINDMILL IN A.Y 2005-06 AND SEVEN WINDMILLS IN THE A.Y 2006-07. THE ASSESS EE HAS OPTED FOR THE INITIAL ASSESSMENT YEAR AS 2010-11 FOR THE WINDMILL INSTALLED IN THE A.Y 2005- 06 AND 20011-12 FOR THE SEVEN WINDMILLS INSTALLED F OR THE ASSESSMENT YEAR 2006-07. AS SUBMITTED BY THE APPELLANT, THE DEPREC IATION AND LOSS OF THESE WINDMILLS UNITS WERE ALREADY SET OFF IN THE EARLIER ASSESSMENT YEARS AGAINST THE PROFITS GENERATED FROM THE OTHER BUSINESS CARRI ED ON BY THE APPELLANT. ON SIMILAR SET OF FACTS AND IN THE ASSESSEES OWN C ASE FOR THE A.Y 2010-11, ITA NO.425 /MDS/2015 4 THE CLAIM OF DEDUCTION U/S.80-IA WAS ALLOWED IN THE APPELLANTS FAVOUR BY THE CIT(A) IN ITA NO.129/13-14 DATED 06.06.2014. 5. ON GOING THROUGH THE FACTS OF THE CASE, THE A.O HAS DISALLOWED THE DEDUCTION CLAIMED U/S.80-IA OF THE INCOME TAX ACT, 1961. RESPECTFULLY FOLLOWING THE DECISION OF THE JURISDICTIONAL HIGH C OURT IN THE CASE OF VELLAYUDHASWAMY SPINNING MILLS (P) LTD VS. ACIT REP ORTED IN 231 CTR (MAD) 368 [2010] THE AO IS DIRECTED TO ALLOW THE CL AIM OF DEDUCTION U/S.80-IA OF THE INCOME TAX ACT, 1961. THE GROUNDS OF APPEAL ARE ALLOWED. 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 IS PENDING. LD. A.R. ON THE OTHER HAND, RELIED ON THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT A ND 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 THE 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 MADRAS H IGH COURT IN THE CASE VELAYUDHASWAMY SPINNING MILLS P. LTD (SUPRA) BEFORE THE HONBLE APEX ITA NO.425 /MDS/2015 5 COURT, HE NEED NOT FOLLOW THAT DECISION. HE DID NOT REALIZE THAT MERE PENDENCY OF THE SLP BEFORE THE APEX COURT IS NOT A VALID GROUND FOR NOT FOLLOWING THE JUDGMENT OF THE HONBLE MADRAS HIGH CO URT. FURTHER, IT IS NOT THE CASE OF THE REVENUE THAT THE JUDGMENT OF TH E HONBLE MADRAS HIGH COURT IN THE CASE VELAYUDHASWAMY SPINNING MILLS P. L TD (SURPA) IS STAYED BY THE HONBLE APEX COURT. IT IS PERTINENT TO MENT ION THAT IN THE ABSENCE OF ANY STAY GRANTED BY THE HONBLE APEX COURT AGAIN ST THE OPERATION OF THE JUDGMENT OF THE HONBLE MADRAS HIGH COURT, ALL THE LOWER JUDICIARIES AS WELL AS QUASI JUDICIAL AUTHORITIES ARE BOUND TO FOLL OW THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT. SINCE THE LD.CI T(A) HAS RIGHTLY FOLLOWED THE DECISION OF THE HONBLE JURISDICTIONAL MADRAS H IGH COURT(SUPRA) AND HELD THE ISSUE IN FAVOUR OF THE ASSESSEE, WE DO NOT FIND IT NECESSARY TO INTERFERE WITH HIS ORDER . THEREFORE WE HEREBY CONFIRM THE ORDER OF THE LD. LD. CIT (A). 7. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSE D. ORDER PRONOUNCED ON 2 ND JUNE, 2015 AT CHENNAI. SD/- SD/- ( . . . ) (N.R.S.GANESAN) ( . '#$ %' ) (A.MOHAN ALANKAMONY) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 2 ND JUNE, 2015. K S SUNDARAM. COPY TO: APPELLANT/ CIT(A)/ DR/ RESPONDENT / LD. CIT / GF