M/S. RSM BRAKES vs. THE INCOME TAX OFFICER

T.C.A.No.876 of 2019 In the High Court of Judicature at Madras Dated : 09.07.2020 Coram : The Honourable Mr.Justice T.S.SIVAGNANAM and The Honourable Mrs.Justice V.BHAVANI SUBBAROYAN Tax Case Appeal No.876 of 2019 M/s.RSM Brakes, 603, C-Block, Pioneer Complex, 1075, Avanashi Road, Coimbatore – 641 018. ...Appellant Vs The Income Tax Officer, Ward III(1), Coimbatore. ...Respondent APPEAL under Section 260A of the Income Tax Act, 1961 against the order dated 25.08.2008 in ITA No.477/MDS/2007 on the file of the Income Tax Appellate Tribunal Chennai 'A' Bench for the assessment year 2004-2005. For Appellant : Mr.A.S.Sriraman For Respondent : Mr.T.R.Senthil Kumar, SSC M/s.K.G.Usha Rani 1/6 http://www.judis.nic.in T.C.A.No.876 of 2019 Judgment was delivered by T.S.SIVAGNANAM,J We have heard Mr.A.S.Sriraman, learned counsel appearing for the appellant, Mr.T.R.Senthil Kumar, the learned Senior Standing Counsel and M/s.K.G.Usha Rani, learned counsel for the respondent. 2.This appeal, filed by the assessee under Section 260A of the Income Tax Act, 1961 (“the Act” for brevity), is directed against the order dated 25.08.2008 passed by the Income Tax Appellate Tribunal, Chennai 'A' Bench (for brevity, the Tribunal) in ITA No.477/Mds/2007 for the assessment year 2004-2005. 3.The assessee has filed this appeal by raising the following substantial questions of law : “1.Whether the Appellate Tribunal is correct in law in rejecting the claim for deduction u/s.80 IA of the Act on the profits/income derived from wind energy generated and distributed through TNEB in the computation of taxable total income? 2.Whether the Appellate Tribunal is correct in law in rejecting the said claim of deduction u/s. 80 IA of the Act in the computation of taxable total income on the interpretation of the provisions in sub section 2/6 http://www.judis.nic.in T.C.A.No.876 of 2019 (5) to the said Section even though such an interpretation would defeat the purpose of the grant of the said deduction/benefit to the assessees engaged in developing wind energy farms? 3.Whether the Appellate Tribunal is right in law in ignoring the legal position that the provisions of Section 80 IA of the Act was not controlled by provisions of Section 80 AB of the Act especially in the context of sub section 5 of Section 80 IA of the Act in the process of rejecting the claim of deduction on the interpretation attempted by the respondent? 4.Whether the Appellate Tribunal is right in law in concluding that sub section 5 to Section 80 IA of the Act had envisaged carried forward and set off of unabsorbed losses/depreciation and interest of prior years in the profits/income of the eligible wind energy unit in the quantification of the deduction from the total taxable income relating to the above Assessment Year, even though the said artificial carried forward and set off of unabsorbed losses/depreciation and interest of prior years in the profits/income of the eligible wind energy unit is not envisaged explicitly as well as impliedly in the said sub section 5 of Section 80 IA of the Act? 5.Whether the Appellate Tribunal is correct in passing the order exparte without giving an opportunity of hearing while rejecting the prayer for 3/6 http://www.judis.nic.in T.C.A.No.876 of 2019 adjournment without giving reason in para 2 of the impugned order?” 4.The Tribunal in the impugned order discussed the assessee's appeal following the decision of the Special Bench of the Tribunal in the case of ACIT vs. Goldmine Shares and Finance Pvt. Ltd. [113 ITD 209(Ahd.)]. It cannot be disputed that the decision in the case of Goldmine Shares and Finance Pvt. Ltd. is no longer good law in the light of the decision of the Division Bench of this Court in the case of Velayudhaswamy Spinning Mills (P) LTD. vs. Assistant Commissioner of Income Tax [(2012) 340 ITR 477 (Madras)] which has been confirmed by the Hon'ble Supreme Court in the decision reported in [2016] 76 taxmann.com 176 [SC]. Therefore, the Substantial Questions of law have to be answered in favour of the assessee. 5.Mr.T.R.Senthil Kumar, learned Senior Standing Counsel appearing for the respondent/revenue submitted that for considering the merits of the assessment, the matter may be sent back to the Assessing Officer. 4/6 http://www.judis.nic.in T.C.A.No.876 of 2019 6.We do not think that a remand is required in the matter, more particularly, when the assessment is of the year 2006. However, when the Assessing Officer gives effect to the decision of this Court answering the Substantial Questions of law in favour of the assessee, it will be well open to him to proceed in accordance with law. 7.In the result, the appeal is allowed, the impugned order is set aside and the Substantial Questions of law are answered in favour of the assessee. No costs. (T.S.S.J.) (V.B.S.J.) 09.07.2020 Speaking (or) Non Speaking Order Index : Yes (or) No Internet : Yes (or) No To The Income Tax Appellate Tribunal, Madras 'A' Bench. cse 5/6 http://www.judis.nic.in T.C.A.No.876 of 2019 T.S.SIVAGNANAM,J AND V.BHAVANI SUBBAROYAN,J cse TCA.No.876 of 2019 09.07.2020 6/6 http://www.judis.nic.in