M/s. Chamundi Textiles (Silk Mills) Ltd., Sivagangai V. JCIT, Madurai

MA 197/CHNY/2004

• Counselvise Citation: [2011] 123 COUNSELVISE.COM (IT) 7128 (ITAT-CHENNAI)
• Duration Of Justice: 7 year(s) 4 month(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 26-11-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 26-11-2010
• Assessment Year: 1997-1998
• Appeal Filed On: 26-07-2004
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: S SRIDHAR
• Section: 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH C CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AN D SHRI GEORGE MATHAN, JUDICIAL MEMBER .. M.A. NOS. 195, 196 & 197/MDS/2004 (IN ITA NOS. 891/MDS/2000 AND 292 & 293/MDS/2002) ASSESSMENT YEARS : 1995-96, 1996-97 & 1997-98 M/S. CHAMUNDI TEXTILES (SILK MILLS) LTD., 8/1, K.V. STREET, KOTTAIYUR-630 106, SIVAGANGAI DISTRICT. V. THE JOINT COMMISSIONER OF INCOME TAX, SPECIAL RANGE-I, MADURAI. (PAN/G.I. NO. 47-019-CY-4598) (APPLICANT) (RESPONDENT) APPLICLANT BY : SHRI S. SRIDHAR RESPONDENT BY : SHRI SHAJI P. JACOB O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER : THESE MISCELLANEOUS APPLICATIONS ARE FILED BY THE ASSESSEE AGAINST THE ORDER OF THIS TRIBUNAL IN ITA NOS. 891/MDS/2000 AND 292 & 293/MDS/2002 DATED 18-05-2004 FOR THE ASSESSMENT YEARS 1995-96, 1996-9 7 AND 1997-98. 2. SHRI S. SRIDHAR, ADVOCATE REPRESENTED ON BEHALF OF THE ASSESSEE AND SHRI SHAJI P. JACOB, SR. DR REPRESENTED ON BEHALF OF THE REVENUE. 3. AT THE TIME OF HEARING THE LEARNED AUTHORISED RE PRESENTATIVE SUBMITTED THAT THE TRIBUNAL HAD MADE THE DECISION ON THE MIST AKEN ASSUMPTION OF FACTS THAT THERE WAS LOSS IN ONE OF THE UNITS OF THE ASSE SSEE WHERE IN FACT THERE WAS NO M.A. NOS.195-197/MDS/2004 2 LOSS IN ANY OF THE UNITS. IT WAS THE SUBMISSION TH AT THE ORDER OF THE TRIBUNAL MAY BE RECALLED AND THE ISSUE RE-ADJUDICATED. 4. IN REPLY, THE LEARNED DR SUBMITTED THAT THE ISSU E AS RAISED IN THE MISCELLANEOUS APPLICATIONS IS A DEBATABLE ISSUE AND THE COMPUTATION OF DEDUCTION U/S. 80HHC OF THE INCOME-TAX ACT, 1961 HAS BEEN DEC IDED BY THE TRIBUNAL. IT WAS SUBMITTED THAT THERE WAS NO MISTAKE IN THE ORDE R OF THE TRIBUNAL WHICH REQUIRED ANY RECTIFICATION. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. IT IS NOTICED THAT THE ISSUE OF DEDUCTION U/S. 80HHC HAS BEEN DECIDED BY THIS TRIBU NAL IN PARA 10 OF ITS ORDER WHEREIN IT HAS BEEN HELD AS FOLLOWS: 10. IN VIEW OF THE ABOVE, IT IS VERY CLEAR THAT SE C. 80HHC IS CONTROLLED BY SEC. 80AB. THE GROSS TOTAL INCOME ME ANS THE TOTAL INCOME COMPUTED UNDER THE PROVISIONS OF THE INCOME TAX ACT. THEREFORE, MERELY BECAUSE THE ASSESSEE IS HAVING TW O INDEPENDENT AND SEPARATE UNIT, IT CANNOT BE SAID TH AT THE ASSESSEE IS ENTITLED TO IGNORE THE LOSS INCURRED IN ONE UNIT WHEN THE ASSESSEE IS ELIGIBLE FOR SET OFF LOSS INCURRED BY ONE UNIT AGAINST THE PROFIT DERIVED IN RESPECT OF THE OTHER UNIT. THEREFORE, THE ASSESSEE HAS TO FIRST SET OFF THE LOSS INCURRED BY ONE UNIT AGAINST THE PROFIT OF THE OTHER UNIT. IN OTHER WOR DS, WHAT IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80HHC IS AGGRE GATE INCOME OF THE ASSESSEE IN RESPECT OF THE UNITS OF THE ASSE SSEE. THEREFORE, THERE IS NO JUSTIFICATION IN THE CLAIM O F THE ASSESSEE THAT THE BANGALORE UNIT SHOULD BE CONSIDERED SEPARA TELY FOR THE PURPOSE OF DEDUCTION UNDER SECTION 80HHC. M.A. NOS.195-197/MDS/2004 3 IN THE SAID ORDER THE TRIBUNAL HAS CATEGORICALLY HE LD THAT THE ASSESSEE HAS TO FIRST SET OFF THE LOSSES INCURRED BY ONE UNIT AGAINST THE PROFIT DERIVED IN RESPECT OF THE OTHER UNIT. IT IS A PRINCIPLE OF LAW WHICH HAS BEE N DECIDED BY THE TRIBUNAL. THIS PRINCIPLE HAS ALSO FOUND APPROVAL BY THE DECISION O F THE HON'BLE SUPREME COURT IN THE CASE OF IPCA LABORATORY LTD. V. DEPUTY COMMI SSIONER OF INCOME-TAX REPORTED IN 266 ITR 521. IF AS PER THE ASSESSEE TH ERE IS NO LOSS IN ANY OF ITS UNITS, THEN IT IS IN THE COMPUTATION WHEN GIVING EF FECT TO THE ORDER OF THE TRIBUNAL THAT THE ISSUE WOULD BE CONSIDERED. IN TH E CIRCUMSTANCES, WE ARE OF THE VIEW THAT NO ERROR IN THE ORDER OF THIS TRIBUNAL HA S BEEN POINTED OUT BY THE ASSESSEE. THEREFORE, THE MISCELLANEOUS APPLICATION S STAND DISMISSED. IN THE CIRCUMSTANCES, THE MISCELLANEOUS APPLICATIONS FILED BY THE ASSESSEE STAND DISMISSED. 6. THE ORDER WAS PRONOUNCED IN THE COURT ON 30/11/1 0. SD/- SD/- (ABRAHAM P. GEORGE) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED THE 30 TH NOVEMBER, 2010. H. COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE