PRINCIPAL COMMISSIONER OF IN vs. M/S.FRESH AND HONEST CAFE LTD

TCA.No.367 of 2020 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 15.10.2020 CORAM: THE HONOURABLE Mr.JUSTICE T.S.SIVAGNANAM and THE HONOURABLE Mrs.JUSTICE V.BHAVANI SUBBAROYAN Tax Case Appeal No.367 of 2020 Principal Commissioner of Income Tax, Corporate Circle-2(1) Wanarpathy Block, 121, M.G.Road, Nungambakkam, Chennai - 600 034 .. Appellant Vs. M/s Fresh and Honest Cafe Ltd., No.35(SP), 3rd Floor, Thiruvika Industrial Estate, Hall Mark Tower, Guindy, Chennai - 600 032 .. Respondent Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961, against the order made in ITA No.3259/Chny/2018 dated 22.07.2019 passed by the Income Tax Appellate Tribunal, 'C' Bench, Chennai for the Assessment Year 2014-2015. For Appellant : Mr.Karthik Ranganathan and Mr.Rajesh Sivanandham

1/6 http://www.judis.nic.in TCA.No.367 of 2020 For Respondent : Mr.A.S.Sriraman for Mr.S.Sridhar J U D G M E N T [Judgment of the Court was delivered by T.S.SIVAGNANAM, J.] This appeal, at the instance of the revenue filed under Section 260A of the Income Tax Act, 1961 (the 'Act' for brevity), is directed against the order passed by the Income Tax Appellate Tribunal, Madras 'C' Bench, Chennai in ITA No.1021/Chny/2018 dated 19.03.2019 for the Assessment Year 2014-2015. 2. The revenue has raised the following Substantial Questions of Law for consideration: “1. Whether on the facts and circumstances of the case and in law, the Tribunal was right in holding additional depreciation can be allowed in the next year in case the same cannot be allowed in the earlier year? 2. Whether on the facts and circumstances of the case and in law, the Tribunal was right in ignoring the jurisdictional High Court's decisions in the case of M.M.Forgings Ltd., reported in 349 ITR 673? 3. Whether on the facts and circumstances of the case and in law, the Tribunal right in ignoring the second 2/6 http://www.judis.nic.in TCA.No.367 of 2020 provision of section 32(1) when there are no provisions in the statute to carry forward the balance additional depreciation to the following years?" 3. We have heard Mr.Karthik Ranganathan, learned counsel and Mr.Rajesh Sivanandham, learned counsel for the appellant / revenue and Mr.A.S.Sriraman, learned counsel for Mr.S.Sridhar, learned counsel for the respondent / assessee. 4. It is not disputed before us that the substantial questions of law raised for consideration have been answered against the revenue in C.I.T. Vs. Aztec Auto (P.) Ltd., [2020] 119 Taxmann.com 215 (Madras). In the said decision, it has been held that where the assessee had claimed arrears on depreciation under Section 32(1)(iia) in respect of asset under head 'plant and machinery' acquired in second half of the financial year 2007-2008, for which additional depreciation at ten percentage was allowed for the assessment year 2008-2009, the same held to be eligible. The operative portion of the Judgment is as follows:- "10. Be that as it may, the decision of the Tribunal in the case of Brakes India Ltd., dated 6-1-2012 was appealed against before the Division Bench of this Court in T.C.A.No.551 of 2013 and the Division Bench noted the decision in Rittal 3/6 http://www.judis.nic.in TCA.No.367 of 2020 India Limited as well as M.M. Forgings and ultimately, allowed the appeal filed by the assessee. In doing so, the Division Bench of this Court distinguished the decision in the case of M.M. Forgings by observing that the said case was not concerned with the issue with regard to right to carry forward the balance additional depreciation and followed the decision in the case of Commissioner of Income Tax, Madurai v. M/s Shri T.P. Textiles Private Limited in [TCA No.157 of 2017 dated 6-3- 2017], which was decided in favour of the assessee and in which decision, the decision in the case of Rittal India Ltd., was also referred to. 11. The learned senior counsel for the revenue also pointed out that so far as the claim of balance 50% of the amount as deduction was provided for inserting the proviso under section 32(1) and such insertion was with effect from 1-4- 2016 by Finance Act, 2015. 12. In our considered view, the effect of the insertion of the proviso in the year 2016, may not have a bearring on the present issue, as during the relevant assessment year 2009- 2010, the law which has been settled by the Division Bench of this Court is the case of Brakes India, against the said decision, the revenue preferred an appeal before the Hon'ble Supreme Court in S.L.P.(C) No. 033755/2017 which was dismissed by an order dated 24-9-2018. Thus, the decision of the Division Bench in the case of Brakes India having been approved by the 4/6 http://www.judis.nic.in TCA.No.367 of 2020 Hon'ble Supreme Court, we are bound by the said decision and accordingly, following the same." Thus, following the above decision, the present Tax Case Appeal is dismissed and the substantial questions of law are answered against the revenue. No costs. [T.S.S.J.,] [V.B.S.J.,] 15.10.2020

Internet: Yes Speaking Judgment / Non speaking Judgment To The Income Tax Appellate Tribunal, 'C' Bench, Chennai ssd 5/6 http://www.judis.nic.in TCA.No.367 of 2020 T.S.SIVAGNANAM,J AND V.BHAVANI SUBBAROYAN,J ssd Tax Case Appeal No.367 of 2020 15.10.2020 6/6 http://www.judis.nic.in