HERCULES HAISTS LTD, V. ADDL CIT 10(3),

MA 383/MUM/2013

• Counselvise Citation: [2014] 124 COUNSELVISE.COM (IT) 1692 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 19 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 13-03-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 25-10-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B K
• Assessee Lawyers: J D MISTRY
• Keywords: Business income; Depreciation; Principle of natural justice; Unabsorbed depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUM BAI . . , , BEFORE SHRI B. R. MITTAL, JM AND SHRI SANJAY ARORA , AM ! ' . / MA NOS. 383, 384, 385 386/MUM/2013 (ARISING OUT OF ITA NOS. 7944, 7946, 2255 & 7943/MU M/2011) ( / ASSESSMENT YEARS: 2005-06 TO 2008-09) HERCULES HOISTS LIMITED BAJAJ BHAWAN, 2 ND FLOOR, 226, JAMNALAL BAJAJ MARG, NARIMAN POINT, MUMBAI-400 021 / VS. ADDL. CIT, RANGE 10(3), AAYAKAR BHAWAN, 4 TH FLOOR, M. KARVE MARG, MUMBAI-400 020 $ ./% ./PAN/GIR NO. AAACH 2706 D APPLICANT : RESPONDENT APPLICANT BY : SHRI J.D. MISTRY RESPONDENT BY : SHRI B.K. PANDA & ' ' ( ) / DATE OF HEARING : 07.02.2014 *+, ( ) / DATE OF PRONOUNCEMENT : 13.03.2014 - / O R D E R PER SANJAY ARORA, A. M.: THIS IS A SET OF MISCELLANEOUS APPLICATIONS (MAS FOR SHORT) BY THE ASSESSEE U/S.254(2) OF THE INCOME TAX ACT, 1961 (THE ACT H EREINAFTER) QUA THE ORDER DATED 13.02.2013 BY THE TRIBUNAL DECIDING ITS CAPTIONED A PPEALS IN RESPECT OF ITS ASSESSMENTS FOR THE ASSESSMENT YEARS (A.YS.) 2005-06 TO 2008-09 . THE SAME RAISING A COMMON OBJECTION/S, WERE HEARD TOGETHER, AND ARE BEING DIS POSED OF VIDE A COMMON, CONSOLIDATED ORDER. 2 MA NOS. 383 TO 386/MUM/2013 (A.YS. 05-06 TO 08-09) HERCULES HOISTS LIMITED VS. ADDL. CIT 2.1 IT WOULD BE, TO BEGIN WITH, RELEVANT TO SET OU T, IF ONLY BROADLY, THE BACKGROUND FACTS OF THE CASE; THE ISSUE/S ARISING; AND THE TRI BUNALS DECISION LEADING TO THE INSTANT OBJECTIONS. THE ASSESSEE IS, APART FROM ITS OTHER B USINESSES, IN THE BUSINESS OF GENERATION OF POWER (AN ELIGIBLE BUSINESS U/S.80-IA OF THE ACT ), OPERATING TWO WIND MILLS, DESIGNATED AS WIND MILL-1 AND WIND MILL-2, FOR THE RELEVANT YEARS. THE ASSESSEE SUFFERED BUSINESS LOSS/UNABSORBED DEPRECIATION ON THESE TWO SECTION 80-IA UNITS, WHICH WAS CLAIMED FOR SET OFF AGAINST THE INCOME FROM THE MAN UFACTURING ACTIVITY, I.E., A NON-ELIGIBLE BUSINESS, PER THE RETURNS OF INCOME FOR THE RELEVAN T YEARS. THE SAME BEING DENIED BY THE REVENUE, IN VIEW OF SECTION 80-IA(5) OF THE ACT (TO WARD WHICH REFERENCE MAY BE MADE TO THE RELEVANT PARTS OF THE ASSESSMENT AS WELL AS THE ORDERS BY THE FIRST APPELLATE AUTHORITY). THE ASSESSEE CARRIED THE MATTER TO THE TRIBUNAL, RA ISING THE FOLLOWING GROUNDS, BEING THE SAME FOR ALL THE YEARS EXCEPT FOR THE AMOUNT/S UNDE R REFERENCE: II. DISALLOWANCE OF SET OFF OF LOSS/DEPRECIATION OF THE BUSINESS OF GENERATION OF POWER AGAINST BUSINESS INCOME FROM MA NUFACTURING ACTIVITY RS. 4,63,52,651/- (*): 2.1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LEARNED ASSESSING OFFICER ERRED IN DISALLOWING SET OFF OF LOSS/DEPRECIATION OF RS.4,63,52,651/- RELATING TO T HE BUSINESS OF GENERATION OF POWER AGAINST THE BUSINESS INCOME FRO M MANUFACTURING ACTIVITY. 2.2 THE LEARNED ASSESSING OFFICER FAILED TO APPRECI ATE THE SUBMISSIONS MADE AND EXPLANATIONS GIVEN BY THE APPELLANT IN RES PECT OF SET OFF OF LOSS UNDER SECTION 72 OF THE ACT AND SET OFF OF DEP RECIATION UNDER SECTION 32(2) OF THE ACT. 2.3 THE LEARNED ASSESSING OFFICER FAILED TO APPRECI ATE LEGAL POSITION RELATING TO SET OFF OF LOSS UNDER ONE HEAD OF INCOM E AGAINST THE INCOME UNDER THE OTHER HEAD OF INCOME AS WELL AS SE T OFF OF UNABSORBED DEPRECIATION RELATING TO ONE BUSINESS AG AINST THE INCOME FROM OTHER BUSINESS AND THEREBY DISALLOWING SET OFF THEREOF. IN VIEW OF THE ABOVE, THE APPELLANT PRAYS THAT THE DENIAL OF SET OFF BY THE LEARNED ASSESSING OFFICER IS UNJUSTIFIED, UNWAR RANTED AND BAD IN LAW AND THE DISALLOWANCE MADE ON ASSESSMENT BE DELE TED AND TOTAL INCOME OF THE APPELLANT BE REDUCED ACCORDINGLY. 3 MA NOS. 383 TO 386/MUM/2013 (A.YS. 05-06 TO 08-09) HERCULES HOISTS LIMITED VS. ADDL. CIT [(*) FOR A.Y. 2005-06. FOR A.Y. 2006-07 : RS.7,36,2 9,145/-; A.Y. 2007-08: RS.7,50,36,476/- & A.Y. 2008-09: RS.1,06,40,364/-] THE TRIBUNAL DECIDED THE APPEALS IN THE ASSESSEES FAVOUR; ITS CONCLUSION BEING CONTAINED AT PARA 6 OF THE IMPUGNED ORDER, WHICH READS AS UND ER: 6. IN VIEW OF THE FOREGOING, WE ANSWER THE QUEST ION POSED AT PARA 5.1 ABOVE IN THE AFFIRMATIVE, I.E., IN FAVOUR OF THE AS SESSEE AND AGAINST THE REVENUE. THE REVENUE IS, THUS, NOT CORRECT IN LAW I N DENYING THE SET OFF OF THE UNABSORBED DEPRECIATION ALLOWANCE/LOSS OF THE A SSESSEES ELIGIBLE UNIT/S AGAINST ITS INCOME FROM OTHER SOURCES IN TERMS OF S S. 32(2), 70 & 71 OF THE ACT. THE SAID UNABSORBED ALLOWANCE/ LOSS, HOWEVER, WOULD STAND TO BE SET OFF IN TERMS OF S. 32(2) & 72, AGAINST THE INCOME O F THE RESPECTIVE ELIGIBLE UNITS FOR THE SUBSEQUENT YEARS, I.E., WHERE SO, IN COMPUTING THE ASSESSEES ELIGIBLE INCOME FOR DETERMINING THE QUANTUM OF DEDU CTION U/S. 80-IA(5), TAKING THE LEGAL FICTION OF THE SAID PROVISION, WHI CH WE HAVE FOUND TO BE APPLICABLE FOR THE RELEVANT YEARS, TO ITS LOGICAL E ND. WE ARE, AS EXPLAINED ABOVE, UNABLE TO CONSIDER THE TWIN ASPECTS AS DISPA RATE, BUT ONLY AS INEXTRICABLY LINKED, ARISING FROM AND INTEGRAL TO T HE ISSUE BEFORE US FOR ADJUDICATION, I.E., THE SCOPE AND AMBIT OF S.80-IA( 5) R/W S. 80-IA(1) OF THE ACT. WE DECIDE ACCORDINGLY. 2.2 THE ASSESSEES GRIEVANCE PER THE INSTANT PETITI ONS IS THAT IN STATING AS TO HOW THE QUANTUM OF DEDUCTION U/S.80-IA SHALL BE REQUIRED TO BE DETERMINED FOR THE SUBSEQUENT YEARS, THE TRIBUNAL HAS TRAVELLED OUTSIDE THE SCOPE OF THE APPEAL/S BEFORE IT. THE SAME, IT IS CONTENDED, WAS NEVER AN ISSUE BEFORE THE TRIBUNAL N OR CONSEQUENTLY ARGUED BY THE PARTIES. THERE IS THUS A BREACH OF THE PRINCIPLE OF NATURAL JUSTICE. THE TRIBUNAL CANNOT EVEN OTHERWISE ISSUE DIRECTIONS TOWARD COMPUTATION OF IN COME FOR FUTURE YEARS. A MISTAKE APPARENT FROM THE RECORD HAS THUS OCCURRED PER THE IMPUGNED ORDER. ACCORDINGLY, IT IS PRAYED THAT THE SENTENCES OCCURRING IN THE CONCLUDI NG PARA 6 (SUPRA), BEGINNING WITH THE WORDS THE SAID UNABSORBED ALLOWANCE/LOSS . , AND CLOSING WITH THE WORDS S.80-IA(5) R/W S. 80-IA(1) OF THE ACT ., ARE PRAYED FOR DELETION. 3. LIKE CONTENTIONS WERE RAISED BEFORE US BY THE LD . SENIOR COUNSEL, STATING OF A SERIOUS PREJUDICE AS HAVING BEEN CAUSED TO THE ASSE SSEE THUS. THE LD. DEPARTMENTAL REPRESENTATIVE (DR), ON THE OTHER HAND, SUPPORTED T HE IMPUGNED ORDER, CLAIMING THE 4 MA NOS. 383 TO 386/MUM/2013 (A.YS. 05-06 TO 08-09) HERCULES HOISTS LIMITED VS. ADDL. CIT SAME TO BE ONLY IN CONSEQUENCE OF AND CONSISTENT WI TH THE FINDINGS BY THE TRIBUNAL, ONLY REPRESENTING ITS INTERPRETATION OF SECTION 80-IA(5) , ON THE BASIS OF WHICH ONLY RELIEF HAD BEEN ALLOWED BY IT TO THE ASSESSEE FOR THE CURRENT YEAR/S. 4. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD, AND GIVEN OUR CAREFUL CONSIDERATION TO THE MATTER. 4.1 THE ASSESSEE, AS EVIDENT, HAS RAISED TWO ISSUES PER ITS INSTANT APPLICATIONS. FIRSTLY, THAT THE TRIBUNAL IN SO DECIDING HAD EXCEEDED ITS J URISDICTION AND, SECONDLY, NO OPPORTUNITY TO ARGUE THE MATTER WAS GRANTED TO THE ASSESSEE, SO THAT THERE HAS BEEN A BREACH OF PRINCIPLE OF AUDI ALTERAM PARTEM AND, THUS, A VIOLATION OF NATURAL JUSTICE. WE SHALL PROCEED IN THAT ORDER. THIS IS ALSO SO AS IF THE TRIBUNAL HAS INDEED EXCEEDED ITS BRIEF, DECIDING THE MATTER THAT OUGHT NOT TO HAVE BEEN BY IT IN THE FIRST PLACE, LACK OF OPPORTUNITY OR NOT SO TO THE ASSESSEE TO PRESENT ITS CASE IN TH E MATTER WOULD BE OF NO CONSEQUENCE. THAT IS, THE SAME SHALL ASSUME RELEVANCE ONLY IF WE WERE NOT TO UPHOLD ITS OBJECTION QUA THE FIRST ISSUE, WHICH IN FACT IMPINGES ON MERITS O F THE CASE. 4.2 WE MAY AT THIS STAGE SET OUT THE STRUCTURE OR T HE ANATOMY OF THE IMPUGNED ORDER. VIDE PARA 2, THE TRIBUNAL DEFINES THE ISSUE AS ARIS ING OUT OF THE ORDERS OF THE AUTHORITIES BELOW, I.E., THE CORRECT INTERPRETATION OF SECTION 80-IA(5), ALSO REPRODUCING THE PROVISION. PARA 3 (I.E., PARAS 3.1 TO 3.3/PGS.2 TO 4) DELINEAT E THE ARGUMENTS ASSUMED BEFORE IT. PARA 4 (OVER SUB-PARAS 4.1 THROUGH 4.6/PGS.4-18) AND 5 (OV ER SUB-PARAS 5.1 THROUGH 5.3/PGS.18- 26) CONTAINS THE TRIBUNALS FINDINGS; IT CONCLUDING THE SAME PER PARA 6 (SUPRA) (AT PG.27). 4.3 THE ORDER BEGINS BY THE TRIBUNAL EXAMINING IF T HE ISSUE COULD BE SAID TO BE COVERED BY, AS CLAIMED BEFORE IT, THE SEVERAL DECISIONS CIT ED BY THE ASSESSEE, AND, IF SO, TO WHAT EXTENT? ONLY TO FIND THE LEGAL POSITION TO BE IN A STATE OF FLUX, I.E., NOT CRYSTALLIZED OR DETERMINED. THOUGH ALL THE DECISIONS UNIFORMLY INTE RPRETED S.80-IA(5), DID SO VARIOUSLY, BEING RENDERED IN THE CONTEXT OF DIFFERENT FACT SET TINGS. HOW WOULD THAT MATTER; THE ISSUE BEING PURELY LEGAL ? THE DECISION IN THE CASE OF SWARNAGIRI WIRE INSULATIONS PVT. LTD. VS. ITO (ITA NO.200/BANG/2010, DATED 21.05.2010) SQUARELY C OVERED THE ISSUE IN THE 5 MA NOS. 383 TO 386/MUM/2013 (A.YS. 05-06 TO 08-09) HERCULES HOISTS LIMITED VS. ADDL. CIT ASSESSEES FAVOUR; THE TRIBUNAL EXPLAINING ITS INTE RPRETATION BY WAY OF AN EXAMPLE (REPRODUCED AT PG. 6 OF THE IMPUGNED ORDER). HOWEVE R, THE SAME WAS RENDERED WITHOUT CONSIDERING THE DECISION BY THE LARGER BENCH OF THE TRIBUNAL IN THE CASE OF ACIT VS. GOLD MINE SHARES & FINANCE (P.) LTD., 113 ITD 209 (SB) (AHD), BINDING ON IT, ALSO IN FACT RELIED UPON BY BOTH THE PARTIES, AND FINDINGS WHERE IN STAND ALSO REPRODUCED (AT PG. 5). THE TWO, THOUGH IN AGREEMENT, WERE ONLY PARTLY SO, AND HAD MATERIAL DIFFERENCES; THE LARGER BENCH IN FACT FAVORING THE VIEW BEING CANVAS SED BY THE REVENUE. FURTHER, BOTH THE DECISIONS WERE AT VARIANCE WITH THAT BY THE HONBLE HIGH COURTS, RELIED UPON BY THE ASSESSEE, I.E., IN THE CASE OF CIT VS. MEWAR OIL AND GENERAL MILLS LTD. (NO.1) [2004] 271 ITR 311 (RAJ.) AND VELAYUDHASWAMY SPINNING MILLS (P.) LTD. VS. ACIT [2012] 340 ITR 477 (MAD). THOUGH THE LATTER WAS RENDERED FOLLOWING THE FORMER, WHICH IN FACT STOOD CONSIDERED BY THE SPECIAL BENCH OF THE TRIBUNAL IN GOLD MINE SHARES & FINANCE (P.) LTD. (SUPRA), BEING BY THE HIGHER COURTS OF LAW, WITH TH E ISSUE ARISING BEING LEGAL, VIEW OF THE HIGHER COURTS WOULD PREVAIL. FURTHER, THE VIEW EXPR ESSED THEREBY, RENDERED IN THE CONTEXT OF THE LATER YEARS, I.E., WHERE THE ELIGIBLE BUSINE SS RETURNED PROFITS, WOULD FAVOUR THE VIEW BEING ADOPTED BY THE REVENUE. IT WAS NOT PERMISSIBL E TO ADOPT A DECISION IN PART, AS ANY DECISION, INVOLVE AS IT DID THE INTERPRETATION OF S ECTION 80-IA(5) (OR THE PARI MATERIA PROVISION OF SECTION 80-I(6)), WOULD REQUIRE BEING CONSTRUED AND APPLIED IN TOTO IRRESPECTIVE OF THE YEAR/S UNDER REFERENCE THE IN ITIAL YEARS OR THE SUBSEQUENT YEARS THE PROVISION BEING APPLICABLE FOR A DEFINED PERIOD (OF TEN/FIFTEEN YEARS). ALSO, THE ASSESSEES ARGUMENT THAT THE TREATMENT TO BE ACCORDED TO THE I MPUGNED LOSS/ALLOWANCE FOR THE FOLLOWING YEARS, I.E., FOR THE PURPOSE OF COMPUTATI ON OF DEDUCTION U/S.80-IA(1), DOES NOT ARISE FOR CONSIDERATION, WAS FOUND NOT ACCEPTABLE ; THE DENIAL BY THE REVENUE BEING ONLY ON THAT BASIS, RELYING ON THE INTERPRETATION OF SEC TION 80-IA(5). FURTHER ON, THE ASSESSEES RELIANCE ON SWARNAGIRI WIRE INSULATIONS PVT. LTD. (SUPRA), COVERING ITS DECISION IN TOTO , WAS, THEREFORE, CONSIDERED AS NOT SUFFICIENT, AS WO ULD NORMALLY BE THE CASE, BEING RENDERED DE HORS THE DECISIONS BY THE LARGER BENCH (OF THE TRIBUNAL) AND BY THE HONBLE HIGH COURTS, BEING INCONSISTENT THEREWITH (PARA 4.1 ). 6 MA NOS. 383 TO 386/MUM/2013 (A.YS. 05-06 TO 08-09) HERCULES HOISTS LIMITED VS. ADDL. CIT THE ISSUE BEING PURELY LEGAL, WOULD THE FACT SETTIN G OR THE YEAR UNDER REFERENCE BE A RELEVANT CONSIDERATION, WAS THE QUESTION UPPER MOST IN THE TRIBUNALS MIND, FACED WITH A SCENARIO OF CONFLICTING DECISIONS, EITHER SIDE RELY ING ON THE SAME DECISION/S, WITH RATHER THE DECISIONS CITED BY THE ASSESSEE WORKING TO ITS DETRIMENT IN THE FACT SETTING OF ITS CASE. SURELY, A HOLISTIC APPROACH WAS REQUIRED. THE MATTE R BEING REQUIRED TO BE LOOKED AT MORE ACUTELY, IT BEGAN WITH ASCERTAINING THE INITIAL AS SESSMENT YEAR IN-AS-MUCH AS THE DEEMING OF SECTION 80-IA(5) IS TO BEGIN WITH THAT Y EAR. THE DECISION BY THE HONBLE COURTS WERE DISTINGUISHED. IN FACT, THE DECISION IN SWARNAGIRI WIRE INSULATIONS PVT. LTD. (SUPRA) PREDICATES ON THE FIRST YEAR OF OPERATIONS BEING THE INITIAL ASSESSMENT YEAR, WHICH THE ASSESSEE DISPUTES , CLAIMING THAT SECTION 80-IA(5) WOULD NOT BE APPLI CABLE TO IT FOR THE CURRENT YEAR/S. THE MATTER WAS, ACCORDINGLY, EXAMIN ED THREAD- BARE, WITH REFERENCE TO THE PARA MATERIA PROVISIONS; THE OFFICIAL PRONOUNCEMENTS IN THE FOR M OF BOARD CIRCULAR/S, NOTES ON CLAUSES, MEMORANDUM EXPLAINING THE PROVISI ONS AS WELL AS COMMUNICATING THE RATIONALE AND THE PURPOSE OF THE PROVISION; THE AME NDMENTS BROUGHT OVER A PERIOD; AND ABOVE ALL THE LANGUAGE OF THE PROVISION AND THE LEG ISLATIVE INTENT CONVEYED THEREBY, DRAWING ON THE SETTLED PRINCIPLES OF INTERPRETATION OF STATUTES. THE PURPOSE OF THE PROVISION WAS FOUND BY IT TO EXTENDING TAX SHELTER ONLY TO THE PROFITS OF THE ELIGIBLE BUSINESS, AND FOR THE TAX HOLIDAY PERIOD. AS A CORO LLARY, THEREFORE, THE LOSS/UNABSORBED DEPRECIATION WOULD STAND TO BE SET OFF AGAINST THE INCOME FROM OTHER SOURCES IN TERMS OF AND UNDER THE REGULAR PROVISIONS OF THE ACT, NEGATI NG THE REVENUES ARGUMENT OF IT BEING NOT SO IN VIEW OF THE PROVISIONS OF SECTION 80-IA(5 ). THE ASSESSEES ARGUMENT THAT THE SAID PROVISION WOULD NOT APPLY FOR THE CURRENT YEAR /S WAS ALSO DISCOUNTENANCED BY THE TRIBUNAL . BOTH THE PARTIES, AND MORE PARTICULARLY THE ASSES SEE, WAS FOUND TO BE READING THE VARIOUS DECISIONS SELECTIVELY IN THEIR FAVOUR (PARA S 4.2 TO 4.6). 4.4 THE MATTER, HOWEVER, COULD NOT BE CONCLUDED ON THAT BASIS, I.E., OF THE APPLICABILITY OF SECTION 80-IA(5) FOR THE CURRENT YEAR, AND THE C OROLLARY DEDUCED BY THE TRIBUNAL, SO THAT IT WOULD, BEING SUBJECT TO JUDICIAL PRECEDENTS, REQ UIRE BEING EXAMINED ON MERITS. THE TRIBUNAL FOUND THE DECISION BY THE HONBLE JURISDIC TIONAL HIGH COURT IN THE CASE OF SYNCO 7 MA NOS. 383 TO 386/MUM/2013 (A.YS. 05-06 TO 08-09) HERCULES HOISTS LIMITED VS. ADDL. CIT INDUSTRIES LTD. VS. AO [2002] 254 ITR 608 (BOM.), SINCE APPROVED BY THE A PEX COURT IN (REPORTED AT [2008] 299 ITR 444 (SC)) TO BE APPLICA BLE. THE SAME, RENDERED IN THE CONTEXT OF SECTION 80-I (AND S.80HH) WOULD, NEVERTH ELESS, HAVE FULL APPLICATION; SECTION 80-I(6) (WHICH CORRESPONDS TO SECTION 80-IA(5)) AND SECTION 80-I(1) BEING EXPLAINED TO OPERATE IN DIFFERENT SPHERES, WITH THE HONBLE COUR T ALSO DRAWING ON THE LEGAL POSITION IN THE MATTER AS EXPLAINED BY THE APEX COURT IN VARIOU S DECISIONS. WHEN, THEREFORE, INCOME FROM TWO PRIORITY INDUSTRIES WAS NOT CONSIDERED AS BEING PRECLUDED FOR BEING SET OFF IN COMPUTING THE GROSS TOTAL INCOME (GTI) U/S.80-IB(5) , THERE IS NO QUESTION OF THE SAME BEING NOT APPLICABLE WHERE THE INCOME IS FROM THE N ON PRIORITY SECTOR, OR ALSO SO . THE LOSS FROM THE PRIORITY SECTOR COULD NOT BE ACCORDED AN INFERIOR STATUS, WHICH WOULD RESULT ON FOLLOWING THE DECISIONS IN THE CASE OF MEWAR OIL AND GENERAL MILLS LTD. (SUPRA); VELAYUDHASWAMY SPINNING MILLS (P.) LTD. (SUPRA); AND GOLD MINE SHARES & FINANCE (P.) LTD. (SUPRA), RELIED UPON BY THE ASSESSEE . THE TRIBUNAL, ACCORDINGLY, FOUND ITSELF AS FULLY IN AGREEMENT WITH THE DECISION IN SWARNAGIRI WIRE INSULATIONS PVT. LTD. (SUPRA). THE DECISION IN THE CASE OF CIT VS. SONAKAYA STEERING SYSTEMS LTD. (2010) 321 ITR 463 (DEL), RELIED UPON BY THE REVENUE, WAS FOUND DISTINGUISHAB LE AND, FURTHER, INCONSISTENT WITH THE DECISION IN THE CASE OF SYNCO INDUSTRIES LTD. (SUPRA). SECTION 80-IA(5), WHICH POSTULATES A STAND ALONE PRINCIPLE BY PROVIDING A PARALLEL BAS IS OF AGGREGATION, WOULD, HOWEVER, STAND VIOLATED, CAUSING ABERRATION/S (INASMUCH AS T HE LEGAL FICTION CREATED THEREBY WOULD NOT HAVE EFFECT), IF LOSSES FROM THE ELIGIBLE SOURC E, SINCE SET OFF, ARE NOT ALLOWED AND CARRIED FORWARD IN ARRIVING AT THE BENEFIT UNDER TH E PROVISION, REFERRING ONCE AGAIN TO THE DECISION IN THE CASE OF SWARNAGIRI WIRE INSULATIONS PVT. LTD. (SUPRA) (PARAS 5.1 TO 5.3). THE MATTER IS CONCLUDED BY IT VIDE PARA 6 (SUPRA). 5.1 WE MAY NOW ADDRESS THE OBJECTIONS OR MISTAKES R AISED OR POINTED OUT, I.E., AS THE CASE MAY BE, BY THE ASSESSEE. WITH REGARD TO JURISDICTION, THE TRIBUNAL HAS ONLY STATED ITS UNDERSTANDING OF SECTION 80-IA(5) AND, FURTHER, ITS INTER PLAY WITH THE REGULAR PROVISIONS OF THE ACT, I.E., THE LEGAL POSITION IN ITS VIEW OB TAINING IN THE MATTER NOTHING MORE AND NOTHING LESS . REFERENCE IN THIS CONTEXT MAY ALSO BE MADE TO THE ASSESSEES GROUND 8 MA NOS. 383 TO 386/MUM/2013 (A.YS. 05-06 TO 08-09) HERCULES HOISTS LIMITED VS. ADDL. CIT NUMBER 2.3 ITSELF, ADVERTING TO THE LEGAL POSITION IN-AS-MUCH AS THE QUESTION OF DEDUCTION OF THE SUM UNDER REFERENCE COULD BE ANSWERED ONLY O N THAT BASIS. THE LEGAL POSITION, IT MAY BE APPRECIATED, WOULD REMAIN THE SAME IRRESPECT IVE OF WHETHER THE YEAR/S UNDER REFERENCE IS THE INITIAL YEAR OR A LATER YEAR; A LO SS YEAR OR A PROFIT YEAR. THAT IS, HOW THE PROVISION WOULD STAND TO OPERATE FOR DIFFERENT YEAR S, AS ALSO EXPLAINED BY THE TRIBUNAL IN THE CASE OF GOLD MINE SHARES & FINANCE (P.) LTD. (SUPRA) AND SWARNAGIRI WIRE INSULATIONS PVT. LTD. (SUPRA), IS INTEGRAL THERETO, EVEN AS SOUGHT TO BE CLARIFIED DURING HEARING WITH REFERENCE THERETO; THE TRIBUNAL IN FAC T COMPLETELY ENDORSING THE VIEW EXPRESSED BY THE LATTER DECISION. IN OTHER WORDS, THE SAME IS A CONCOMITANT OF THE LE GAL POSITION AS DETERMINED BY THE TRIBUNAL . THE SAME, IT WOULD BE NOTED, CHARACTERIZES OR MARKS THE ORDERS BY THE TRIBUNAL ITSELF IN BOTH THE CASES WHICH WERE RELIED UPON BY THE ASSESSEE ITSELF, AS A MERE GLANCE OF PARA 63 AND 6.6 TO 6.9 OF THE ORDERS IN THE CASE OF GOLD MINE SHARES & FINANCE (P.) LTD. (SUPRA) AND SWARNAGIRI WIRE INSULATIONS PVT. LTD. (SUPRA) RESPECTIVELY, REPRODUCED AT PGS.5 AND 6 OF THE IMPUGNED ORDER, WOULD SHOW. THE ILLUSTRATION CITED BY THE TRIBUNAL IN THE LATTER CA SE (REPRODUCED AT PARA 6 OF THE IMPUGNED ORDER) CLARIFIES THE LEGAL POSITION BY ASSUMING A C ERTAIN FACTS AND FIGURES OVER A PERIOD OF THREE YEARS. IT WOULD BE IRRELEVANT WHETHER THE YEAR UNDER REFER ENCE BEFORE THE TRIBUNAL IN THAT CASE WAS THE FIRST, SECOND OR THE THIRD YEAR THE TRIBUNAL IN FACT BEING SEIZED WITH ASSESSMENT YEAR 2006-07 CORRESPONDING TO YEAR 1 (I.E., THE LOSS YEAR) IN THE EXAMPLE, WHICH IS ALSO THE CASE IN THE INSTANT APPEALS . IT IS NOT THE ASSESSEES CASE THAT IT IS IN DISAGREEMENT WITH THE DECISION IN THE CASE OF SWARNAGIRI WIRE INSULATIONS PVT. LTD. (SUPRA); THE IMPUGNED ORDER ONLY SUBSCRIBING TO THE SAME VIEW, EVEN AS, AS EXPLAINED HEREINBEFORE, BEING REQUIRED TO FOLLOW A LABYRINTHI NE COURSE IN VIEW OF THE CONTRARY DECISIONS BY THE HIGHER COURTS OF LAW/LARGER BENCH OF THE TRIBUNAL. A DECISION, AS EXPLAINED BY THE TRIBUNAL, CANNOT BE ACCEPTED IN PA RT OR SELECTIVELY (PG. 20), SO THAT WHAT THE ASSESSEE STATES NOW ITSELF MILITATES AGAINST TH E DECISION IN SWARNAGIRI WIRE INSULATIONS PVT. LTD. (SUPRA) RELIED UPON BY IT. NOT ONLY IT IS THUS WELL WITHIN ITS JURISDICTION IN STATING WHAT IT DOES, THE SAME FORMS AN INTEGRAL PART OF TH E TRIBUNALS DECISION , REPRESENTING THE STAND ALONE PRINCIPLE, WHICH IS THE PREMISE OF S.80 -IA(5). THE ASSESSEES STAND AMOUNTS 9 MA NOS. 383 TO 386/MUM/2013 (A.YS. 05-06 TO 08-09) HERCULES HOISTS LIMITED VS. ADDL. CIT TO ACCEPTING THE TRIBUNALS ORDER IN PART, I.E., SE LECTIVELY, TO THE EXTENT IT MAY SUIT ITS INTEREST. IN FACT, THE ASSESSEE DOES NOT EVEN STATE SO, I.E., OF THERE BEING ANY INCONSISTENCY BETWEEN THE CONCLUSION ARRIVED AT AND EXPLAINED VID E PARA 6 OF ITS ORDER AND ITS FINDING AT PARAS 4 & 5 OF THE IMPUGNED ORDER, SO THAT THE TWO ARE IN HARMONY. THE ASSESSEES STAND IS THUS NEITHER ADMISSIBLE IN THE FACTS OF THE CASE IT RELYING ON THE DECISION ON THE CASE OF SWARNAGIRI WIRE INSULATIONS PVT. LTD. (SUPRA) DECIDING IN THE LIKE MANNER, NOR MAINTAINABLE IN LAW. THE ONLY COURSE AVAILABLE TO THE ASSESSEE, WHERE IT FINDS THE TRIBUNALS DECISION, INSOFAR AS IT RELATES TO THE I NTERPRETATION OF SECTION 80-IA(1) R/W S. 80- IA(5) UNACCEPTABLE, IS TO SEEK ITS JUDICIAL REVIEW, CHALLENGING THE LEGAL POSITION AS EXPLAINED BY THE TRIBUNAL . 5.2 NEXT, WE CONSIDER THE ASSESSEES OBJECTION QUA LACK OF OPPORTUNITY. THE SAME AGAIN MERITS BEING RUBBISHED AT THE THRESHOLD. WE H AVE ALREADY CLARIFIED THAT THE ASSESSEES OBJECTION IS NOT MAINTAINABLE IN VIEW OF THE TRIBUNALS DECISION IN SWARNAGIRI WIRE INSULATIONS PVT. LTD . (SUPRA) RELIED UPON BY IT, WHICH IN FACT ILLUSTRA TES WHAT THE TRIBUNAL HAS STATED PER PARA 6 OF ITS ORDER. WHERE THEN IS THE QUESTION OF THE IMPUGNED LOSS/ALLOWANCE, DIRECTED FOR ADJUSTMENT AGAINST OTH ER INCOME OF THE ASSESSEE FOR THE CURRENT YEAR/S, NOT BEING CARRIED FORWARD, AS EXPLA INED VIDE PARA 6.9 OF THE TRIBUNALS ORDER IN THAT CASE ? BE THAT AS IT MAY, A MERE BROWSE OF PARAS 3.1 TO 3.3 OF THE IMPUGNED ORDER WOULD SUFFICE TO DISPEL ANY DOUBT IN THE MATT ER. AS EVIDENT FROM PARA 3.1, THIS IN FACT WAS THE FIRST OBSERVATION OF THE BENCH, WHICH FINDS EXPRESSION AT PARA 3.1 IMMEDIATELY AFTER THE QUESTION RAISED BY THE LD. CO UNSEL (LINE 4) . THAT HE CHOSE TO CONSIDER IT AS NOT RELEVANT, DESCRIBING IT AS THE SECOND LIMB OF THE MATTER, IS ANOTHER MATTER OR ANOTHER ASPECT OF THE MATTER, ALTOGETHER. IN FACT, THE DECISIONS BY THE HONBLE HIGH COURT RELIED UPON BY THE ASSESSEE ARE ADMITTED LY ONLY QUA THIS SECOND LIMB (PARA 3.1), EMPHASIZING, AGAIN, IF ONE WAS REQUIRED, THE RELEVANCE THEREOF, I.E., THE SAID SECOND LIMB . THE SAME WERE RATHER FOUND TO BE IN FAVOUR OF THE VIEW BEING FOLLOWED BY THE REVENUE. AS SUCH, IF AT ALL, IT IS THE REVENUE THAT COULD POSSIBLY BE CLAIMED TO BE AGGRIEVED IN THIS REGARD; THE TRIBUNAL RELYING ON T HE DECISION IN THE CASE OF SYNCO 10 MA NOS. 383 TO 386/MUM/2013 (A.YS. 05-06 TO 08-09) HERCULES HOISTS LIMITED VS. ADDL. CIT INDUSTRIES LTD. (SUPRA). THE SAME, I.E., THE POSSIBLE GRIEVANCE, TH OUGH WOULD NOT OBTAIN IN-AS-MUCH AS THE SAID DECISION STANDS CONSIDERED B Y THE TRIBUNAL IN THE CASE OF GOLD MINE SHARES & FINANCE (P.) LTD. (SUPRA), RELIANCE ON WHICH STANDS PLACED IN FACT BY BOTH THE PARTIES. THE TRIBUNAL, CALLED UPON TO EXPRESS ITS VIEW ON A LEGAL POSITION, FACED WITH CONFLICTING STATEMENT OF LAW, FOUND THE SAME AS ANS WERED THROUGH THE SAID DECISION, SINCE UPHELD BY THE APEX COURT . THE ASSESSEES CHARGE IN THIS RESPECT, THEREFORE, ONLY NEEDS TO BE STATED TO BE REJECTED. 5.3 FINALLY, BEFORE PARTING WITH OUR ORDER, WE WISH TO PLACE ON RECORD THE DEEP DISMAY THAT ATTENDS OUR DISPOSAL OF THE INSTANT APPLICATIO NS. FIRSTLY, THE ASSESSEE RELIED ON THE DECISIONS WITHOUT EXAMINING AND EXPLAINING THEIR FU LL IMPORT, FOUND BY THE TRIBUNAL AS INCONSISTENT WITH ITS OWN STAND, REQUIRING IT TO E MBARK ON A COURSE FOR DISCOVERING THE CORRECT LEGAL POSITION, WHICH IT HAD TO, FOLLOWING LARGELY THE FIRST PRINCIPLES, GUIDED OF COURSE BY JUDICIAL PRECEDENTS. THE OBJECTION BEING NOW RAISED TANTAMOUNTS TO ACCEPTING A DECISION IN PART A COURSE WHICH IS INADMISSIBLE, ALSO FOR THE REASON THAT THE SAME EXPRESSES ITS UNDERSTANDING OF THE LEGAL POSITION T HAT OBTAINS IN THE MATTER, I.E., IRRESPECTIVE OF THE PERIOD IT EXTENDS TO OR THE YEA RS COVERED BY THE PROVISION. THIRDLY, IN- AS-MUCH AS THE VIEW EXPRESSED BY THE TRIBUNAL PER T HE PART OF ITS DECISION SOUGHT TO BE EXPUNGED IS ONLY A VIEW EXPRESSED BY THE TRIBUNAL I N SWARNAGIRI WIRE INSULATIONS PVT. LTD. (SUPRA); AND IN FACT ALSO IN GOLD MINE SHARES & FINANCE (P.) LTD. (SUPRA), RELIED UPON BY THE ASSESSEE ITSELF (REFER PARA 3.1 OF THE IMPUGNED ORDER), THE ASSESSEES APPLICATIONS BECOME WHOLLY FRIVOLOUS. THE ISSUES AS TO JURISDICTION AND DENIAL OF OPPORTUNITY ARE FOUND TO BE FALSE, I.E., IN LAW AND ON FACTS, RESPECTIVELY. THE ASSESSEE HAS, BY DOING SO, I.E., MOVING THE SAID APPLICATIONS, CA ST A WHOLLY AVOIDABLE BURDEN ON THE TRIBUNAL; IT BEING SELF-EVIDENT THAT THE PART OF TH E DECISION BEING PRAYED FOR REMOVAL REPRESENTS ITS WELL-CONSIDERED, CONSCIOUS VIEW, WH ICH IT FINDS AS INTEGRAL OR INTRINSIC TO THE ISSUE BEFORE IT AS WELL AS ITS DECISION, WHICH IT IS IN ANY CASE INCOMPETENT TO REVIEW. LITIGANTS ARE EXPECTED TO BEHAVE MUCH MORE RESPONSI BLY AND, IN OUR VIEW, THE COURSE ADOPTED ONLY AMOUNTS TO AN ABUSE OF THE PROCESS OF LAW. THE SAID APPLICATIONS, THUS, APART 11 MA NOS. 383 TO 386/MUM/2013 (A.YS. 05-06 TO 08-09) HERCULES HOISTS LIMITED VS. ADDL. CIT FROM DISMISSAL, MERIT IMPOSITION OF COST, WHICH HOW EVER WE RESTRAIN OURSELVES FROM IN- AS-MUCH AS WE DID NOT HEAR THE PARTIES THEREON. 6. IN THE RESULT, THE ASSESSEES MISCELLANEOUS APPL ICATIONS ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON MARCH 13, 201 4 SD/- SD/- (B. R. MITTAL) (SANJAY ARORA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER & ' MUMBAI; .' DATED : 13.03.2014 .'../ ROSHANI , SR. PS ! ' #$%& ' &$ / COPY OF THE ORDER FORWARDED TO : 1. / $0 / THE APPLICANT 2. 1$0 / THE RESPONDENT 3. & 2 ( / ) / THE CIT(A) 4. & 2 / CIT CONCERNED 5. 56 1 '7! , / ) 7!, , & ' / DR, ITAT, MUMBAI 6. 689 :' / GUARD FILE ! ( / BY ORDER, )/(* + (DY./ASSTT. REGISTRAR) , & ' / ITAT, MUMBAI