ACIT, CHENNAI V. M/s. MSK Constructions Private Ltd., CHENNAI

ITA 845/CHNY/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61322 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2008-2009
• Appeal Filed On: 17-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K E B RENGARAJAN JR
• Assessee Lawyers: S SRIDHAR
• Keywords: Depreciation; Unabsorbed depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI BEFORE DR. O.K.NARAYANAN, VICE-PRESIDENT AND SHRI V.DURGA RAO, JUDICIAL MEMBER I.T.A. NO. 845/MDS/2012 ASSESSMENT YEAR : 2008-09 THE ASSISTANT COMMISSIONER OF INCOME-TAX, COMPANY CIRCLE IV(3), CHENNAI-34. (APPELLANT) VS. M/S. MSK CONSTRUCTIONS PVT. LTD., A-2, 75, UMA SHANTHI RESIDENCY, HABIBULLAH ROAD, T.NAGAR, CHENNAI-17. PAN - AAACM2608R (RESPONDENT) APPELLANT BY : SHRI K.E.B.R ENGARAJAN, JR. STANDING COUNSEL RESPONDENT BY : SHRI S.SRIDHA R, ADVOCATE DATE OF HEARING : 10 TH JULY, 2012 DATE OF PRONOUNCEMENT : 10 TH JULY, 2012 O R D E R PER DR. O.K.NARAYANAN, VICE PRESIDENT THIS APPEAL IS FILED BY THE REVENUE. THE RELEVANT ASSESSMENT YEAR IS 2008-09. THE APPEAL IS DIREC TED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-V , AT CHENNAI I TA 845/12 :- 2 -: DATED 27.1.2012. THE APPEAL ARISES OUT OF THE ASSE SSMENT COMPLETED UNDER SEC.143(3) OF THE INCOME-TAX ACT, 1 961. 2. THE GROUND RAISED BY THE REVENUE IS THAT THE COM MISSIONER OF INCOME-TAX(APPEALS) HAS FAILED TO APPRECIATE THA T THE INITIAL ASSESSMENT YEAR FOR THE PURPOSE OF 80-IA(5) WOULD B E THE YEAR IN WHICH THE ASSESSEE HAS SET UP THE WINDMILLS. IT IS THE CASE OF THE REVENUE THAT THE LOSSES PRIOR TO THE ASSESSMENT YEA R 2007-08 MUST ALSO BE CONSIDERED IN COMPUTING THE ELIGIBLE P ROFITS FOR THE IMPUGNED ASSESSMENT YEAR. IT IS THE ARGUMENT OF TH E REVENUE THAT THE COMMISSIONER OF INCOME-TAX(APPEALS) OUGHT TO HAVE SEEN THAT AFTER SET OFF OF UNABSORBED DEPRECIATION AND BUSINESS LOSSES OF EARLIER YEARS, THERE WOULD BE NO PROFITS ON WHICH THE ASSESSEE MAY BE ENTITLED TO CLAIM DEDUCTION UNDER S EC.80IA. 3. THE COMMISSIONER OF INCOME-TAX(APPEALS) HAS DECI DED THE ISSUE RELYING ON THE JUDGMENT OF THE HONBLE MADRAS HIGH COURT RENDERED IN THE CASE OF M/S. VELAYUDHASWAMY SPINNIN G MILLS P. LTD. (231 CTR 368), WHICH IS EXACTLY ON THE ISSUE. IT IS THE CASE OF THE REVENUE THAT THE DEPARTMENT HAS NOT ACCEPTED THE JUDGMENT OF THE HONBLE MADRAS HIGH COURT IN THE AB OVE CASE AND THEY HAVE FILED AN SLP BEFORE THE HONBLE SUPRE ME COURT. I TA 845/12 :- 3 -: 4. BUT, AS THE MATTER STANDS TODAY, THE ISSUE IS CO VERED BY THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT. EVEN THOUGH AN SLP HAS BEEN FILED BY THE REVENUE BEFORE THE HO NBLE APEX COURT, THE DECISION OF THE HONBLE MADRAS HIGH COUR T HAS NOT BEEN DISTURBED. THEREFORE, THE COMMISSIONER OF INC OME- TAX(APPEALS) AS WELL AS THE TRIBUNAL ARE BOUND TO F OLLOW THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT R ENDERED IN THE CASE OF M/S. VELAYUDHASWAMY SPINNING MILLS P. LTD. (231 CTR 368). IN VIEW OF THE ABOVE, WE HOLD THAT THIS APPE AL FILED BY THE REVENUE IS LIABLE TO BE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON TUESDAY, THE 10 TH OF JULY, 2012 AT CHENNAI. SD/- SD/- (V.DURGA RAO) JUDICIAL MEMBER (DR. O.K.NARAYANAN) VICE-PRESIDENT CHENNAI, DATED THE 10 TH JULY, 2012 MPO* COPY TO: 1. APPELLANT 2. RESPONDENT 3. IT(A) 4. CIT 5. DR