ACIT, CHENNAI vs. M/S. SAHUWALIA FLOUR MILLS, CHENNAI

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ITA 2849/CHNY/2016Status: DisposedITAT Chennai29 December 2016AY 2012-133 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that losses already set off cannot be notionally brought forward and adjusted for computing deduction under Section 80IA. This decision followed the jurisdictional High Court's judgment which was upheld by the Supreme Court.

What were the facts?

The assessee claimed deduction under Section 80IA for windmill power generation. The Assessing Officer denied this deduction by notionally bringing forward and setting off losses from earlier years, relying on Section 80IA(5).

What were the issues?

Whether losses from earlier years, already set off, can be notionally brought forward to deny deduction under Section 80IA. The applicability of the jurisdictional High Court's decision, upheld by the Supreme Court, to the present case.

Which sections of the Income-tax Act were involved?

Section 80IA,Section 80IA(5),Section 143(3)

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, “C” BENCH, CHENNAI

Before: SHRI SANJAY ARORA & SHRI G. PAVAN KUMAR

Hearing: 27.12.2016Pronounced: 29.12.2016

आदेश /O R D E R

PER G. PAVAN KUMAR, JUDICIAL MEMBER:

1.

The appeal filed by the Revenue against the order of Commissioner of Income-Tax (Appeals)-5, Chennai for the assessment year 2012-13 passed

:-2-: I.T.A. No. 2849/Mds/2016 u/s. 143(3)and 250 of the Income Tax Act, 1961 (herein after referred to as 'the Act').

2.

The only issue arises for consideration is with regard to deduction eligible to the assessee u/s. 80IA of the Income Tax Act, 1961 (in short 'the Act') in respect of windmill Power Generation.

3.

The Brief facts of the case that the assessee filed Return of income for the assessment year 2012-13 on 29.09.2012 disclosing total income of Rs. 62,33,429/- and assessment was completed u/s. 143(3) of the Act. The Ld. AO, relying on provisions of section 80IA(5) denied the assessee deduction u/s. 80IA, claimed at Rs. 60,90,492/-, by notionally bringing forward and setting off loss of the eligible business of the earlier years. This issue, even as admitted by the parties before us, is squarely covered by the decision by the Hon'ble Jurisdictional High Court in M/s. Sri Velayudhaswamy Spinning Mills Pvt. Ltd., Vs. CIT (231 ITR 368). The Hon'ble Court has therein clarified, that notwithstanding provisions of section 80IA(5), such losses, already set off, cannot be notionally brought forward and adjusted for computing deduction u/s. 80IA of the Act. Further, the Revenue has not accepted the judgment of Madras High Court and filed Special Leave Petition (SLP) in the Hon'ble Supreme Court. The Ld. Counsel of the assessee submitted that the Hon'ble Supreme Court in Civil Appeal No. 2596/2012 has dismissed the :-3-: I.T.A. No. 2849/Mds/2016 Special Leave Petition filed by the Revenue in orders dated 23.09.2016.

Therefore, this Tribunal is of the considered opinion that since Special Leave Petition filed before the Apex Court is dismissed. The judgment of Madras High Court is binding on all the authorities in the State of Tamil Nadu and Union Territory of Pondicherry. Therefore, the Commissioner of Income Tax (Appeals) has rightly allowed the claim of the assessee by following the judgment of Madras High Court in Velayudhaswamy Spinning Mills (P) Ltd., (Supra). Accordingly, the Tribunal do not find any infirmity in the order of the Commissioner of Income Tax (Appeals). The appeal of the Revenue is dismissed.

4.

In the result, the Revenue Appeal for the assessment year 2012- 13 is dismissed.

Order pronounced on Thursday, the 29th day of December, 2016 at Chennai.

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