DCIT, CHENNAI V. Shri Renuga Textiles Ltd., Theni

ITA 798/CHNY/2014

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6316 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-06-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 02-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: G STANLY
• Keywords: Depreciation
• Section: 143(3); 263

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI . , . . , ! ' [BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMB ER AND SHRI S. S. GODARA, JUDICIAL MEMBER] ./ I.T.A.NO.798/MDS/2014 / ASSESSMENT YEAR : 2007-08 THE DY. COMMISSIONER OF INCOME-TAX COMPANY CIRCLE VI(2) CHENNAI VS. M/S SHRI RENUGA TEXTILES LTD NO.87, CUMBUM ROAD THENI 625 531 [PAN AADCS 8242 G ] ( #$ / APPELLANT) ( %&#$ /RESPONDENT) / APPELLANT BY : SHRI SHAJI P. JACOB, ADDL. CIT /RESPONDENT BY : SHRI G. STANLY, ADVOCATE / DATE OF HEARING : 16-06-2014 ! / DATE OF PRONOUNCEMENT : 20-06-2014 ' / O R D E R PER S.S.GODARA, JUDICIAL MEMBER THIS REVENUES APPEAL FOR ASSESSMENT YEAR 2007-08 , IS DIRECTED AGAINST ORDER OF THE COMMISSIONER OF INCO ME-TAX(APPEALS)- VI, CHENNAI DATED 12.12.2013, PASSED IN I.T.A.NO.13 27/13-14 IN PROCEEDINGS UNDER SECTION 143(3) READ WITH SECTION 263 OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT). I.T.A.NO.798/14 :- 2 -: 2. THE SOLE SUBSTANTIVE GROUND RAISED BY THE REVENUE CHALLENGES THE CIT(A)S ORDER DIRECTING THE ASSESSI NG OFFICER TO DELETE THE DISALLOWANCE MADE ON SALE PROCEEDS OF ` 3,91,62,530/- FROM CARBON CREDITS FOR THE PURPOSE OF DEDUCTION U/S 80 IA OF THE ACT MADE IN THE ASSESSMENT ORDER DATED 29.11.2012 IN CONSEQU ENCE TO THE CITS ORDER DATED 30.3.2012 IN PROCEEDINGS U/S 263 OF TH E ACT. 3. THE ASSESSEE IS A COMPANY ENGAGED IN THE MANUFACTU RE OF COTTON YARN TERRY PRODUCTS, DYED YARN AND POWER GEN ERATION. IT HAD FILED RETURN ON 30.10.2007 DISCLOSING INCOME OF ` 5,02,57,888/- WITH BOOK PROFITS OF ` 7,25,32,733/- WHICH WAS SUMMARILY PROCESSED. TH E ASSESSING OFFICER HAD FRAMED REGULAR ASSESSMENT O N 23.12.2009 COMPUTING INCOME AT ` 9,31,055/- AFTER ALLOWING DEPRECIATION ON EXPENDITURE CAPITALIZED IN EARLIER YEARS AND SECTIO N 80IA DEDUCTION OF ` 1,71,45,532/- AND ` 3,85,33,839/- RESPECTIVELY. THEREAFTER, THE CIT ASSUMED JURISDICTION U/S 263 OF THE ACT VIDE ORDER DATED 30.3.2012 TO SET ASIDE THE ISSUE OF DEDUCTION U/S 80IA ON REC EIPTS FROM SALE OF THE AFORESAID CARBON CREDITS BACK TO THE ASSESSING OFFI CER. 4. IN CONSEQUENTIAL PROCEEDINGS, THE ASSESSING OFFICER PASSED HIS ORDER ON 29.11.2012 REDUCING THE ASSESSEES C LAIM OF DEDUCTION U/S 80IA QUA AFORESAID CARBON CREDITS RECEIPTS OF ` 3,91,62,530/-. I.T.A.NO.798/14 :- 3 -: 5. ON THE OTHER HAND, THE ASSESSEE HAD FILED CASE I.T .A.NO. 1009/MDS/2012 AGAINST THE CITS ORDER DATED 30.3.20 12. VIDE ORDER DATED 21.11.2013 A CO-ORDINATE BENCH HELD THE ASSU MPTION OF SECTION 263 JURISDICTION AS NOT SUSTAINABLE IN LAW BY HOLDI NG THAT THE ASSESSING OFFICER HAD TAKEN ONE OF THE POSSIBLE VIEW. IN VIE W THEREOF, THE CIT(A) IN HIS ORDER UNDER CHALLENGE HAS DIRECTED TH E ASSESSING OFFICER TO DELETE THE IMPUGNED DISALLOWANCE. THEREFORE, THE REVENUE IS AGGRIEVED. 6. WE HAVE HEARD BOTH PARTIES AND GONE THROUGH THE CAS E FILE. IT IS AN UNDISPUTED FACT THAT THE CIT HAD ASSUMED SECTION 263 JURISDICTION BY DIRECTING THE ASSESSING OFFICER FO R A FRESH DECISION ON ALLOWABILITY OF DEDUCTION U/S 80IA QUA SALE OF CAR BON CREDITS IN QUESTION. THE 'TRIBUNAL' HAS HELD THAT THE ASSESS ING OFFICER, WHILST ACCEPTING THE ASSESSEES CLAIM HAD TAKEN ONE OF TH E POSSIBLE VIEW AND QUASHED THE REVISION PROCEEDINGS ASSUMED BY TH E CIT. THAT BEING THE CASE, WE HOLD THAT THE CONSEQUENTIAL DISA LLOWANCE MADE BY THE ASSESSING OFFICER HAS GOT NO LEGS TO STAND. TH EREFORE, WE CONFIRM THE CIT(A)S FINDINGS AND REJECT THE REVENUES GR OUNDS. I.T.A.NO.798/14 :- 4 -: 7. THE REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED ON FRIDAY, THE 20 TH OF JUNE, 2014, AT CHENNAI. SD/- SD/- ( . ) (A. MOHAN ALANKAMONY) / ACCOUNTANT MEMBER ( . . ) (S. S. GODARA) ! / JUDICIAL MEMBER '# / CHENNAI $% / DATED: 20 TH JUNE, 2014 RD %& '()( / COPY TO : 1 . / APPELLANT 2 . / RESPONDENT 3. *+, / CIT(A) 4. * / CIT 5. (-. / / DR 6. .01 / GF