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

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TCA/408/2018HC Madras10 July 2020Bench: Hon`ble Mr Justice T. S. SIVAGNANAM4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the substantial questions of law were answered against the Revenue. The Court noted that these questions of law have already been answered against the Revenue by this Court in previous decisions, specifically in T.C.A.No.228/2011 dated 18.03.2020 and T.C.A.No.301/2019 dated 06.07.2020. Following these precedents, the Tax Case Appeal was dismissed. The reasoning is based on the established position of law as laid down by the High Court in similar matters, implying that unabsorbed depreciation loss does not need to be set off before computing the deduction under Section 10B. The operative direction was to dismiss the appeal. No issues were expressly left undecided.

What were the facts?

The Revenue has filed a Tax Case Appeal under Section 260-A of the Income Tax Act, 1961, challenging an order passed by the Income Tax Appellate Tribunal (ITAT), Chennai 'B' Bench, dated 11.07.2017. The appeal pertains to Assessment Year 2007-08. The dispute revolves around the computation of deduction under Section 10B of the Income Tax Act. The assessee is M/s. Alagumalai Impex Pvt Ltd., and the appellant is the Commissioner of Income Tax, Chennai. The procedural history indicates that the ITAT's order is under challenge before the High Court.

What were the issues?

The Tribunal had to decide the following substantial questions 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 under Section 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 was held that brought forward losses are to be first set off before allowing deduction under Section 10B of the Income Tax Act? Assessee's contentions: The judgment does not record specific contentions made by the assessee. However, the questions posed by the Revenue implicitly suggest the assessee argued that unabsorbed depreciation loss does not need to be set off before claiming Section 10B deduction. Revenue's contentions: The Revenue contended that brought forward losses, including unabsorbed depreciation, must be set off before computing the deduction under Section 10B, relying on the Apex Court's 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.408 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.408 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.No721/Mds/2014 relating to the Asst Year 2008-09. 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.408 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. 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 2/4 http://www.judis.nic.in T.C.A.No.408 of 2018 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 question 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.408 of 2018 T.S.SIVAGNANAM, J. AND V.BHAVANI SUBBAROYAN, J. sk T.C.A.No.408 of 2018 10.07.2020 4/4 http://www.judis.nic.in

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