ITO, COIMBATORE vs. M/S. SIVASUBRAMANIA TEXTILES, COIMBATORE

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ITA 2137/CHNY/2016Status: DisposedITAT Chennai25 November 2016AY 2013-144 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 held that the pendency of an SLP before the Apex Court does not prevent following a High Court judgment. The Tribunal also noted CBDT instructions to accept the Madras High Court's judgment and withdraw appeals.

What were the facts?

The revenue filed appeals against the orders of the CIT(A) allowing deduction under Section 80IA. The Assessing Officer had disallowed the claim, stating that losses and unabsorbed depreciation could not be set off against other business income.

What were the issues?

Whether losses and unabsorbed depreciation can be set off against other business income for the purpose of Section 80IA deduction, and whether a pending SLP prevents following a High Court judgment.

Which sections of the Income-tax Act were involved?

Section 80IA

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘C’ BENCH, CHENNAI

Before: SHRI N.R.S. GANESAN & SHRI D.S. SUNDER SINGH

Hearing: 19.10.2016Pronounced: 25.11.2016

Heard together (2 matters)

ITA No.2136/Mds/2016
ITA No.2137/Mds/2016

Read from the judgment's own cause title. This page is filed under one of them.

आदेश /O R D E R

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

1.

Both the appeals of the revenue are directed against the respective order of CIT(A) dated 08.04.2016 for the assessment years 2012-13 and 2013- 14 respectively. Since common issue arises for consideration in both the appeals, we heard the same together and disposing of the same by this common order.

2.

No one appeared for the assessee inspite of service of notice by R.P.A.D. Therefore, we heard the learned representative for the department and proceeded to dispose off the appeal on merit. The only issue arises for consideration is deduction claimed by the assessee under Section 80IA of the Act. In both the appeals, the assessing officer disallowed the claim of the assessee on the ground that the losses and the unabsorbed depreciation allowances cannot be set off against other business income of the assessee.

Referring to the judgment of the Madras High Court in Velayudhaswamy Spg.Mills Ltd., the assessing officer found that the revenue has already filed the SLP before the Apex Court. Therefore, it was not followed. This Tribunal is of the considered opinion that the initial assessment year means, the year in which the assessee begins to claim deduction under Section 80IA of the Act.

The Madras High Court allowed the claim of the assessee by interpreting Section 80IA (5) of the Act refused to follow the same on the ground that the revenue has already filed the SLP before the High Court. This Tribunal is of the considered opinion that mere pendency of SLP before the Apex Court cannot be a reason for not following the judgment of the Madras High Court.

Moreover, the CBDT instructed its officers to accept the judgment of the Madras High Court and withdraw all the pending appeals. Inspite of this instruction, the revenue has filed the present appeals before this Tribunal. Therefore, this Tribunal is of the considered opinion that the CIT(A) rightly allowed the claim of the assessee. 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, both the appeals of the revenue are dismissed.

Order pronounced on 25th November, 2016 at Chennai.

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