DCIT, CHENNAI vs. PRECISION EQUIPMENTS (CHENNAI) PVT. LTD., CHENNAI

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ITA 2049/CHNY/2016Status: DisposedITAT Chennai28 October 2016AY 2011-124 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the mere pendency of a Special Leave Petition before the Apex Court does not justify not following the jurisdictional High Court's judgment. The CIT(Appeals) had rightly allowed the deduction.

What were the facts?

The Revenue appealed against the CIT(Appeals)'s order allowing the assessee's deduction claim under Section 80-IA. The Assessing Officer had disallowed the claim based on a pending appeal by the Revenue against a Madras High Court judgment.

What were the issues?

Whether the pendency of an SLP before the Supreme Court justifies disallowing a deduction when the jurisdictional High Court has ruled in favour of the assessee.

Which sections of the Income-tax Act were involved?

Section 80-IA

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Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI

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

Hearing: 26.09.2016Pronounced: 28.10.2016

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) – 3, Chennai, dated 22.03.2016 and pertains to assessment year 2011-12.

2.

The only issue arises for consideration is disallowance of the deduction claimed by the assessee under Section 80-IA of the Income-tax Act, 1961 (in short 'the Act').

3.

Shri Shiva Srinivas, the Ld. Departmental Representative, submitted that the Assessing Officer disallowed the claim of the assessee under Section 80-IA of the Act on the ground that the Revenue has filed an appeal against the judgment of Madras High Court in Velayudhaswamy Spinning Mills (P) Ltd. v. ACIT (340 ITR 477). On appeal by the assessee, the CIT(Appeals) allowed the claim of the assessee. The Ld. D.R. submitted that an SLP is pending before the Apex Court, therefore, the CIT(Appeals) ought not have allowed the claim of the assessee.

4.

We have heard Sh. N. Devanathan, the Ld.counsel for the assessee also. Admittedly, the Assessing Officer disallowed the claim of the assessee under Section 80-IA of the Act on the ground that an SLP is pending before the Apex Court against the judgment of Madras High Court in Velayudhaswamy Spinning Mills (P) Ltd. (supra). The CBDT in its latest circular instructed all its officers not to contest the matter wherever the issue is covered by the judgment of Madras High Court in Velayudhaswamy Spinning Mills (P) Ltd. (supra). In fact, the CBDT instructed its officers to withdraw all the appeals pending on the subject. Inspite of this instruction, this appeal is filed before this Tribunal. This Tribunal is of the considered opinion that mere pendency of Special Leave Petition before the Apex Court cannot be a reason for not following the judgment of jurisdictional High Court. It is nobody’s case that the judgment of Madras High Court was stayed by the Apex Court. In those circumstances, this Tribunal is of the considered opinion that the CIT(Appeals) has rightly allowed the claim of the assessee under Section 80-IA of the Act. This Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed.

5.

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

Order pronounced on 28th October, 2016 at Chennai.

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