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

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.

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.

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