THE COMMISSIONR OF INCOME TAX vs. M/S.ALAGUMALAI IMPEX PVT.LTD

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TCA/406/2018HC Madras10 July 2020Bench: Hon`ble Mr Justice T. S. SIVAGNANAM4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal filed by the Revenue. It noted that the substantial questions of law raised in this appeal had already been answered against the Revenue by this Court in previous decisions. Specifically, the Court referred to its own judgments in T.C.A.No.228/2011 dated March 18, 2020, and T.C.A.No.301/2019 dated July 6, 2020. By following these precedents, the Court held that the Tribunal's decision was correct and that the substantial questions of law were answered against the Revenue. Therefore, the appeal was dismissed, upholding the ITAT's order.

What were the facts?

The Revenue, Commissioner of Income Tax, Chennai, filed a Tax Case Appeal under Section 260-A of the Income Tax Act, 1961, against an order of the Income Tax Appellate Tribunal (ITAT), Chennai 'B' Bench, dated July 11, 2017. The appeal pertains to Assessment Year 2007-08. The dispute revolves around the treatment of unabsorbed depreciation loss in relation to a deduction claimed under Section 10B of the Income Tax Act. The ITAT had passed an order in favour of the assessee, M/s. Alagumalai Impex Pvt Ltd.

What were the issues?

1. Whether the Tribunal was correct in holding that the quantum of unabsorbed depreciation loss out of the total loss carried forward is not required to be set off before computing deduction under Section 10B of the Income Tax Act, 1961? (Question of law) 2. Whether the Tribunal ought to have followed the decision of the Apex Court in the case of Himatasingke Seide Ltd reported in 214 Taxmann.com page 257 wherein it had been clearly held that brought forward losses are to be first set off before allowing deduction under Section 10B of the Income Tax Act? (Question of law) Assessee's contentions: Not recorded in the judgment. Revenue's contentions: The Revenue argued that brought forward losses, including unabsorbed depreciation, must be set off before allowing deduction under Section 10B, citing the Supreme Court decision in Himatasingke Seide Ltd.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 10B

AI-generated summary — verify with the full judgment below

T.C.A.No.406 of 2018 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 10.07.2020 CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAM and THE HONOURABLE MRS.JUSTICE V.BHAVANI SUBBAROYAN T.C.A.No.406 of 2018 The Commissioner of Income Tax, Chennai. .. Appellant Versus M/s.Alagumalai Impex Pvt Ltd., No.95, New Avadi Road, Kilpauk, Chennai 600 010 PAN AADCA6590R .. Respondent Prayer:- Tax Case Appeal filed under Section 260-A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal, Madras 'B' Bench, dated 11.07.2017 made in I.T.A.No2911/Mds/2014 relating to the Asst Year 2007-08. For Appellant : Mr.R.Hemalatha

Standing counsel for Taxes For Respondent: Mr.T.N.Seetharaman 1/4 http://www.judis.nic.in T.C.A.No.406 of 2018 JUDGMENT [Order of the Court was made by

T.S.SIVAGNANAM

, J.]

This appeal, filed by the Revenue under Section 260 A of the Income Tax Act, 1961 is directed against the order passed by the Income Tax Appellate Tribunal, Chennai, 'B' Bench in I.T.A.NO.2911/Mds/2014 dated 11.07.2017 for the assessment year 2007-08. The appeal has been filed raising the following substantial question of law. 1. Whether the Tribunal was correct in holding that the quantum of unabsorbed depreciation loss out of the total loss carried forward is not required to be set off before computing deduction u/s 10B? 2. Whether the Tribunal ought to have followed the decision of the Apex Court in the case of Himatasingke Seide Ltd reported in 214 Taxmann.com page 257 wherein it had been clearly held that brought forward losses are to be first set off before allowing deduction u/s.10B of the I.T.Act? 2/4 http://www.judis.nic.in T.C.A.No.406 of 2018 2. It is not in dispute and cannot be disputed by the Revenue that the above question of law are answered against the Revenue in T.C.A.No.228/2011 dated 18.03.2020 as well as by this Court in T.C.A.No.301/2019 dated 06.07.2020. 3. Thus, following the above decision, the Tax Case Appeal is dismissed and the substantial questions of law are answered against the Revenue. (T.S.S.,J) (V.B.S.,J) 10.07.2020 sk Index: Yes / No Internet: Yes / No Speaking Order/Non-Speaking Order 3/4 http://www.judis.nic.in T.C.A.No.406 of 2018 T.S.SIVAGNANAM, J. AND V.BHAVANI SUBBAROYAN, J. sk T.C.A.No.406 of 2018 10.07.2020 4/4 http://www.judis.nic.in

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