THE COMMISSIONER OF INCOME TAX vs. M/S V S LAD and SONS

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ITA/100104/2014HC KarnatakaKAHC02011249201427 November 2019Bench: N.S.SANJAY GOWDA,ALOK ARADHE3 pages
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What did the High Court hold?

The High Court held that the loss incurred in respect of the windmill could be notionally carried forward for setting off against profits in subsequent years. This decision was based on a Supreme Court judgment covering the same issue.

What were the facts?

The Revenue appealed against an ITAT order that allowed the assessee to carry forward losses from a windmill notionally for setting off against profits in subsequent years. This was in the context of computing deduction under Section 80IA.

What were the issues?

Whether losses from a windmill can be notionally carried forward for set off under Section 80IA, considering the provisions of Section 80IA(5).

Which sections of the Income-tax Act were involved?

Section 80IA

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: 1 : IN THE HIGH COURT OF KARNATAKA DHARWAD BENCH DATED THIS THE 27TH DAY OF NOVEMBER 2019 PRESENT THE HON’BLE MR.JUSTICE ALOK ARADHE

AND

THE HON’BLE MR.JUSTICE N.S.SANJAY GOWDA

ITA NO.100104/2014

BETWEEN

1.

THE COMMISSIONER OF INCOME TAX SADUM ROAD, GULBARGA

2.

THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE - 2(3), BANGALORE ... APPELLANTS (BY SRI. TULAJAPPA KALABURAGI, ADV.)

AND

M/S V S LAD & SONS PRASANTH NIVAS, KRISHNA NAGAR, SANDUR - 583120 BELLARY DISTRICT PAN: AACFV3909R ... RESPONDENT (BY SRI. A.SHANKAR, SENIOR COUNSEL)

THIS ITA IS FILED UNDER SECTION 260A OF THE INCOME TAX ACT, 1961 AGAINST THE ORDER PASSED IN ITA NO.146/BANG/2013 DATED 13.06.2014 ON THE FILE OF THE INCOME TAX APPELLATE TRIBUNAL, ‘C’ BENCH, BANGALORE, DISMISSING THE APPEAL FILED BY THE REVENUE AND ALLOWING THE APPEAL FILED BY THEASSESSEE.

: 2 : THIS ITA COMING ON FOR HEARING, THIS DAY, ALOK ARADHE J., DELIVERED THE FOLLOWING:

JUDGMENT

Mr.Tulajappa Kalaburagi, learned counsel for the appellants. 2. Mr.A.Shankar, learned Senior counsel for the respondent.

3.

Heard on the question of admission.

4.

The appeal is admitted on following substantial question of law. “Whether the Tribunal committed an error of law in holding that the loss incurred in respect of wind mill cannot be carried forward notionally for setting of such loss from profit in subsequent years, while computing deduction under Section 80IA in respect of said wind mill ignoring the specific provisions of Section 80IA(5)?”

5.

With the consent of learned counsel for the parties, same is heard finally.

6.

When the matter was taken up today, learned counsel for the parties jointly submitted that the controversy involved in the instant appeal is

: 3 : squarely covered by the decision of the Supreme Court in the case of Assistant Commissioner of Income Tax, Tirupur vs. Velayudhaswamy Spinning Mills (P.) Ltd., (2016) 76 taxmann.com 176 (SC).

In view of aforesaid submission and for the reasons assigned by the Hon’ble Supreme Court in Assistant Commissioner of Income Tax, Tirupur supra, the substantial question of law framed by this Court is answered in favour of the assessee and against the revenue.

In the result, the order dated 13.06.2014 passed by the Income Tax Appellate Tribunal insofar as it pertains to disallowing of the loss incurred in respect of wind mill notionally for the subsequent years is hereby quashed.

Accordingly, the appeal is disposed of.

Sd/- JUDGE

Sd/- JUDGE

Rsh

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