Thiagarajar Mills (P) Ltd., Madurai V. DCIT, Madurai

MA 69/CHNY/2016

• Counselvise Citation: [2016] 124 COUNSELVISE.COM (IT) 4766 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 16 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 11-08-2016
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 01-07-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 25-04-2016
• Court: TRIBUNAL
• Department Lawyers: SUPRIYO PAL
• Assessee Lawyers: R SRINIVASAN
• Keywords: Depreciation

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI , . ! ' , # '$ BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER M.A.NOS. 68 TO 70/MDS/2016 (IN ITA NOS. 1417 TO 1419/MDS/2015) / ASSESSMENT YEARS : 2009-10 TO 2011-12 M/S. THIAGARAJAR MILLS (P) LTD., THIAGARAJAR MILLS PREMISES, KAPPALUR, MADURAI 625 008. PAN AAACT4304R (APPLICANT) V. THE DEPUTY COMMISSIONER OF INCOME-TAX, CORPORATE CIRCLE-2, MADURAI. ( RESPONDENT) APPLICANT BY : SHRI R. SRINIVASAN, ADVOCATE RESPONDENT BY : SHRI SUPRIYO PAL, JCIT / DATE OF HEARING : 01.07.2016 / DATE OF PRONOUNCEMENT : 11.08.2016 % / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER BY THESE MISC. APPLICATIONS, THE ASSESSEE IS SEEK ING RECTIFICATION OF THE ORDER OF THE TRIBUNAL DATED 19 .2.2016 IN ITA NOS. 1417 TO 1419/MDS/2015. - - MA 68 TO 70/15 2 2. THE LD. AR, SUBMITTED THAT IN THOSE APPEALS, BEF ORE THIS TRIBUNAL, THE ASSESSEE CHALLENGED NON GRANTING OF D EDUCTION U/S.80IA OF THE ACT AND ALSO CHALLENGED THE DELETIO N OF ADDITION TOWARDS PAYMENT COMMISSION IN VIEW OF PROVISIONS OF SEC.40(A)(I) OF THE ACT. HE FURTHER SUBMITTED THAT THE TRIBUNAL DECIDED THE ISSUE RELATING TO COMPUTATION OF DEDUCT ION BY FOLLOWING THE ORDER OF THE MADRAS HIGH COURT IN THE CASE OF VELAYUDHASWAMY SPINNING MILLS PVT. LTD. VS. ACT (34 0 ITR 477) AND OBSERVED IN PARA 3 OF ITS ORDER AS FOLLOWS : 3. AFTER HEARING BOTH THE PARTIES, WE ARE OF THE OPINION THAT THE ISSUE IS SQUARELY COVERED BY THE JUDGMENT OF TH E MADRAS HIGH COURT IN THE CASE OF VELAYUDHASWAMY SPINNING M ILLS PVT. LTD. VS. ACT, 340 ITR 477, WHEREIN IT WAS HELD THAT LOSSES AND DEPRECIATION OF THE YEARS EARLIER TO THE INITIAL ASSESSMENT YEAR WHICH HAVE ALREADY BEEN ABSORBED AGAINST THE PROFITS OF OTHER BUSINESS CANNOT BE NOT IONALLY BROUGHT FORWARD AND SET OFF AGAINST THE PROFITS OF THE ELIGIBLE BUSINESS FOR COMPUTING THE DEDUCTION U/S 80IA. BEI NG SO, THERE IS NO INFIRMITY IN THE ORDER OF THE CIT(A) IN HOLDING THAT THE ASSESSEE IS ENTITLED FOR DEDUCTION U/S 80IA OF THE ACT. WE, THEREFORE, CONFIRM THE ORDER OF THE CIT(A) ON T HIS ISSUE. 2.1 ACCORDING TO THE LD. AR, THE TRIBUNAL SHOULD NO T HAVE REMITTED THE ISSUE RELATING TO PAYMENT COMMISSION T O THE FILE OF THE AO FOR FRESH CONSIDERATION, AS THE CIT(APPEALS) SPECIFICALLY STATED THAT ALL THE DETAILS WERE FILED DURING THE A SSESSMENT AND - - MA 68 TO 70/15 3 THE AO HAS NOT REBUTTED THE SAME. FOR THIS PURPOSE , HE DREW OUR ATTENTION TO PARA 5.4 OF THE CIT(APPEALS) ORDER . FURTHER, HE SUBMITTED THAT EVEN BEFORE THE TRIBUNAL, NECESSARY DETAILS WERE FILED AND THEREFORE, THE ISSUE SHOULD NOT HAVE REMI TTED BACK TO THE FILE OF THE AO FOR FRESH CONSIDERATION. ON THE OTHER HAND, THE LD. DR RELIED ON THE ORDER OF THE TRIBUNAL. 3. WE HAVE HEARD BOTH THE PARTIES AND CONSIDERED TH E ORDERS PASSED BY THE LOWER AUTHORITIES. IN THE ASS ESSMENT ORDER, THE AO CATEGORICALLY MENTIONED THAT THE ASSESSEE HA S NOT CONVINCED THE ASSESSING OFFICER, WHETHER THE SA ID PAYMENT IS IN THE NATURE OF COMMISSION OR FEES FOR TECHNICA L SERVICES. FURTHER, IT WAS OBSERVED THAT IF FEES FOR TECHNICA L SERVICES HAD BEEN THE CASE, THEN TDS IS MANDATORY EVEN FOR NON-R ESIDENT UNLESS COVERED UNDER DOUBLE TAXATION AVOIDANCE AGRE EMENT. BEING SO, WE CANNOT SAY THAT THE ASSESSEE HAS FILED NECESSARY DETAILS BEFORE THE AO. CONTRARY TO THE FINDINGS OF THE AO, THE CIT(APPEALS) HAS GIVEN RELIEF TO THE ASSESSE BY OBS ERVING IN PARA 5.4 DURING THE APPELLATE PROCEEDINGS THAT THE DETAILS OF FOREIGN AGENCY COMMISSION WAS FILED INCLUDING THE I NVOICES RAISED BY THE AGENTS AND THE INSTRUCTIONS TO THE BA NK FOR THE - - MA 68 TO 70/15 4 PAYMENT. SINCE IN THE INSTRUCTION TO THE BANK, THE NATURE OF PAYMENT IS DESCRIBED AS AGENCY COMMISSION AND IN TH E INVOICES OF THE AGENTS SHOW THAT THE COMMISSION IS CALCULATE D AT 1 TO 2% OF THE SALES INVOICE AMOUNT, IT IS A PAYMENT OF SAL ES COMMISSION. HOWEVER, NEITHER THE AO NOR THE CIT(APPEALS) HAS EX AMINED, WHAT IS THE NATURE OF SERVICES RENDERED BY THE AGEN TS. IN SUCH CIRCUMSTANCES, THE TRIBUNAL WAS OF THE OPINION THAT IT IS APPROPRIATE TO REMIT THE ISSUE BACK TO THE FILE OF THE AO FOR FRESH CONSIDERATION. THE ASSESSEE CANNOT DICTATE THE TRI BUNAL. IT IS THE HIERARCHY OF THE TRIBUNAL TO TAKE APPROPRIATE D ECISION. HENCE, IN OUR OPINION, MISC. APPLICATION FILED BY THE ASSESSEE IS HAVING NO MERIT, TO BE DISMISSED. 4. IN THE RESULT, THE MISC. APPLICATION IS DISMISSED. ORDER PRONOUNCED ON THURSDAY, THE 11 TH OF AUGUST, 2016 AT CHENNAI. SD/- SD/- ( . ) ( ) (G. PAVAN KUMAR) (CHANDRA POOJARI) /00 120 /JUDICIAL MEMBER 34 120/ACCOUNTANT MEMBER 4/ /CHENNAI, <1 /DATED, THE 11 TH AUGUST, 2016. MPO* - - MA 68 TO 70/15 5 =14> ?@3A BC4A /COPY TO: 1. B3DE /APPELLANT 2. ?F0DE /RESPONDENT 3. =0 =0 G (B3) /CIT(A) 4. =0 =0 G /CIT 5. AHI0 ?J /DR 6. IK L3 /GF.