DCIT, MADURAI vs. M/S. THE METAL POWDER COMPANY LTD., THIRUMANGALAM

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ITA 2430/CHNY/2016Status: DisposedITAT Chennai16 February 2017AY 2012-133 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal followed the Madras High Court's decision in Velayudhaswamy Spinning Mills (P) Ltd. v. ACIT, which held that prior year losses are not to be set off against profits for Section 80-IA deduction. The Supreme Court also dismissed the Revenue's SLP on this matter.

What were the facts?

The Revenue appealed against the CIT(A)'s order concerning the assessment year 2012-13. The core issue was whether losses from earlier years needed to be set off before granting deduction under Section 80-IA.

What were the issues?

Whether losses of earlier years must be set off against profits when calculating deduction under Section 80-IA of the Income-tax Act.

Which sections of the Income-tax Act were involved?

Section 80-IA

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI [CAMP: MADURAI

Before: SHRI N.R.S. GANESAN & SHRI ABRAHAM P. GEORGE

For Respondent: Shri S. Sridhar, Advocate
Hearing: 16.02.2017Pronounced: 16.02.2017

आदेश /O R D E R

PER N.R.S. GANESAN, JUDICIAL MEMBER:

1.

This appeal of the Revenue is directed against the order of the Commissioner of Income Tax (Appeals) -1, Madurai, dated 26.04.2016 and pertains to assessment year 2012-13.

2.

We have heard Shri Shiva Srinivas, the Ld. Departmental Representative and Shri S. Sridhar, the Ld.counsel for the assessee. Admittedly, the issue arises for consideration is with regard to setting off of losses of the earlier year for the purpose of granting deduction under Section 80-IA of the Income-tax Act, 1961 (in short 'the Act'). This issue was considered by the Madras High Court in Velayudhaswamy Spinning Mills (P) Ltd. v. ACIT (340 ITR 477). The Madras High Court found that losses of the earlier year need not be set off while granting deduction under Section 80-IA of the Act. The case of the Revenue is that a Special Leave Petition was pending before the Apex Court against the judgment of Madras High Court in Velayudhaswamy Spinning Mills (P) Ltd. (supra). In fact, the CBDT vide its recent circular accepted the judgment of Madras High Court and instructed all its officers to withdraw the appeals pending in various forums. The Apex Court has dismissed the SLP filed by the Revenue. In those circumstances, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed.

3.

In the result, the appeal filed by the Revenue is dismissed.

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