Mepco Industries Limited, Madurai V. DCIT, Madurai

MA 58/CHNY/2017

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 6709 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 4 month(s) 12 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 12-06-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 30-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S CHANDRASEKARAN

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI ... , . !' , # $ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER %% / M.P. NOS.55, 56, 57 & 58/CHNY/2017 (IN I.T.A. NOS.2042, 2043, 2044 & 2045/MDS/2016) & '& / ASSESSMENT YEARS : 2009-10, 2010-11, 2012-13 & 20 13-14 M/S MEPCO INDUSTRIES LIMITED, 17-A, VALLABHAI ROAD, CHOKKIKULAM, MADURAI 625 002. PAN : AAACM 7886 M V. THE DEPUTY COMMISSIONER OF INCOME TAX, COMPANY CIRCLE 2, MADURAI. ()*& /PETITIONER) ()+*,/ RESPONDENT) )*& . / /PETITIONER BY : SHRI S. CHANDRASEKARAN, FCA )+*, . / / RESPONDENT BY : SHRI AR.V. SREENIVASAN, JCIT 0 . 1# / DATE OF HEARING : 11.05.2018 2!' . 1# / DATE OF PRONOUNCEMENT : 12.06.2018 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THE ASSESSEE HAS FILED THE PRESENT MISCELLANEOUS PETITIONS ON THE GROUND THAT THERE IS AN ERROR CREPT IN THE ORDE R OF THIS TRIBUNAL DATED 21.10.2016. 2. SHRI S. CHANDRASEKARAN, THE LD. REPRESENTATIVE F OR THE ASSESSEE, SUBMITTED THAT THIS TRIBUNAL HAS FOUND THAT THE ASS ESSEE HAS TWO UNITS. ONE OF THE UNIT HAS TWO UNDERTAKINGS WHICH GENERATE ELECTRICITY. THE 2 M.P. NOS.55 TO 58/CHNY/17 OTHER UNIT GENERATES CHLORATE. THE UNIT WHICH GENE RATES CHLORATE IS NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 80-IA OF THE I NCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'), WHEREAS, THE OTHER TWO UNITS WHIC H GENERATE ELECTRICITY IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80-IA OF THE A CT. ACCORDING TO THE LD. REPRESENTATIVE, THE ASSESSEE SUFFERED LOSS IN CHLOR ATE UNIT. IN FACT, THE LOSS SUFFERED BY THE CHLORATE UNIT TO THE EXTENT OF 47,71,749/- WAS REDUCED FROM THE GROSS TOTAL INCOME. THIS TRIBUNAL , ACCORDING TO THE LD. REPRESENTATIVE, WITHOUT CONSIDERING THE DEDUCTION A LREADY MADE BY THE ASSESSEE WITH REGARD TO LOSS SUFFERED IN CHLORATE D IVISION, FOUND THAT THE LOSS CLAIMED BY THE ASSESSEE HAS TO BE SET OFF AGAI NST THE INCOME FROM GAS POWER PLANT. ACCORDING TO THE LD. REPRESENTATI VE, THIS OBSERVATION OF THE TRIBUNAL LEADS TO A WRONG CONCLUSION. THE CLAI M OF THE ASSESSEE, ACCORDING TO THE LD. REPRESENTATIVE, IS THAT THE LO SS SUFFERED IN CHLORATE DIVISION WAS ALREADY REDUCED FROM GROSS TOTAL INCOM E, THEREFORE, IT CANNOT BE DEDUCTED ONCE AGAIN. HENCE, ACCORDING TO THE LD. REPRESENTATIVE, THERE IS ERROR IN THE ORDER OF THIS TRIBUNAL. 3. REFERRING TO THE JUDGMENT OF APEX COURT IN SYNCO INDUSTRIES LTD. V. ASSESSING OFFICER (INCOME-TAX) (2008) (299 ITR 4 44), THE LD. REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE APEX COURT IN CATEGORICAL TERMS FOUND THAT WHEN THE ASSESSEE HAD NO GROSS TOTAL INCOME, THEN IT IS NOT ENTITLED FOR DEDUCTION UNDER CHAPTER VIA OF THE ACT. REFERRING TO THE JUDGMENT OF APEX COURT, MORE PARTI CULARLY PAGE 456, THE LD. REPRESENTATIVE SUBMITTED THAT THE GROSS TOTAL I NCOME HAS FIRST GOT TO 3 M.P. NOS.55 TO 58/CHNY/17 BE DETERMINED AFTER ADJUSTING LOSSES, ETC. AND IF T HE GROSS TOTAL INCOME OF THE ASSESSEE IS NIL, THE ASSESSEE WOULD NOT BE ENTI TLED FOR DEDUCTION UNDER CHAPTER VIA OF THE ACT. IN THIS CASE, ACCORD ING TO THE LD. REPRESENTATIVE, AFTER ADJUSTING THE LOSSES SUFFERED BY THE CHLORATE DIVISION, STILL THE ASSESSEE HAS GROSS TOTAL INCOME , THEREFORE, THE ASSESSEE IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80 -IA OF THE ACT. THEREFORE, ACCORDING TO THE LD. REPRESENTATIVE, THE JUDGMENT OF APEX COURT IS SQUARELY APPLICABLE IN FAVOUR OF THE ASSES SEE. HENCE, ACCORDING TO THE LD. REPRESENTATIVE, THERE IS AN ERROR IN THE ORDER OF THIS TRIBUNAL WHICH NEEDS TO BE RECTIFIED. 4. ON THE CONTRARY, SHRI AR.V. SREENIVASAN, THE LD. DEPARTMENTAL REPRESENTATIVE, SUBMITTED THAT THERE IS NO ERROR IN THE ORDER OF THIS TRIBUNAL. THE TRIBUNAL IN CATEGORICAL TERMS FOUND THAT THE LOSS SUFFERED BY THE ASSESSEE IN CHLORATE DIVISION HAS TO BE SET OFF AGAINST THE PROFIT. THEREFORE, ACCORDING TO THE LD. D.R., THE TRIBUNAL BY PLACING RELIANCE ON THE JUDGMENT OF APEX COURT IN SYNCO INDUSTRIES LTD. (SUPRA) FOUND THAT THE ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION UNDER SE CTION 80-IA OF THE ACT, THEREFORE, THERE IS NO ERROR IN THE ORDER OF THIS T RIBUNAL. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE CLAIM OF THE ASSESSEE IS THAT THE LOSS SUFFERED IN CHLORATE DIVI SION TO THE EXTENT OF 47,71,749/- WAS ALREADY ADJUSTED AGAINST THE GROSS TOTAL INCOME AND 4 M.P. NOS.55 TO 58/CHNY/17 EVEN AFTER ADJUSTMENT, THE GROSS TOTAL INCOME OF TH E ASSESSEE REMAINS POSITIVE. HOWEVER, THIS TRIBUNAL PROCEEDED ON THE PRESUMPTION THAT THE LOSS SUFFERED IN CHLORATE DIVISION WAS NOT SET OFF EARLIER, THEREFORE, IT HAS TO BE ADJUSTED FIRST. HENCE FOUND THAT THE ASSESSE E IS NOT ELIGIBLE FOR DEDUCTION IN VIEW OF THE JUDGMENT OF APEX COURT IN SYNCO INDUSTRIES LTD. (SUPRA). IF THE LOSS SUFFERED IN CHLORATE DIVISION WAS ALREADY ADJUSTED, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE RE IS NO NEED FOR SET OFF OF SAME LOSS ONCE AGAIN FOR THE PURPOSE OF ARRIVING GROSS TOTAL INCOME FOR COMPUTATION OF DEDUCTION UNDER SECTION 80-IA UNDER CHAPTER VIA OF THE ACT. 6. IT IS ALSO NOT DISPUTED THAT ADJUSTMENT OF LOSS OF 47,71,749/- WAS ALREADY MADE AND THE GROSS TOTAL INCOME OF THE ASSE SSEE REMAINS AT POSITIVE. THE JUDGMENT OF APEX COURT IN SYNCO INDU STRIES LTD. (SUPRA) SAYS THAT IF THE GROSS TOTAL INCOME IS NIL, THEN TH E ASSESSEE WOULD NOT BE ENTITLED FOR DEDUCTION UNDER CHAPTER VIA OF THE ACT . THEREFORE, THE LD. REPRESENTATIVE FOR THE ASSESSEE RIGHTLY CLAIMS THAT THE JUDGMENT OF APEX COURT IN SYNCO INDUSTRIES LTD. (SUPRA) SUPPORTS THE CASE OF THE ASSESSEE. IN OTHER WORDS, THE JUDGMENT OF APEX COURT IS IN FA VOUR OF THE ASSESSEE. 7. IN VIEW OF THE ABOVE, THERE IS AN ERROR WHICH CR EPT IN THE ORDER OF THIS TRIBUNAL WHICH CAN BE RECTIFIED ONLY AFTER REC ALLING THE ORDER. THEREFORE, THE ORDER OF THIS TRIBUNAL DATED 21.10.2 016 IS HEREBY RECALLED. NOW THE APPEAL OF THE ASSESSEE IN I.T.A. NOS.2042, 2042, 2044 & 5 M.P. NOS.55 TO 58/CHNY/17 2045/MDS/2016 STANDS RESTORED ON THE FILE OF THIS T RIBUNAL. THE REGISTRY IS DIRECTED TO POST THE APPEAL FOR FINAL DISPOSAL B EFORE THE REGULAR BENCH ON 27.08.2018. 8. WITH THE ABOVE OBSERVATION, THE MISCELLANEOUS PE TITIONS FILED BY THE ASSESSEE STAND ALLOWED. ORDER PRONOUNCED COURT ON 12 TH JUNE, 2018 AT CHENNAI. SD/- SD/- (. !' ) ( ... ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) # / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 12 TH JUNE, 2018. KRI. . )15% 6%'1 /COPY TO: 1. )*& / PETITIONER 2. )+*, /RESPONDENT 3. 0 71 () /CIT(A) 4. 0 71 /CIT 5. %8 )1 /DR 6. 9& : /GF.