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Income Tax Appellate Tribunal, ‘ B’ BENCH : CHENNAI
Before: SHRI ABRAHAM P. GEORGE & SHRI G. PAVAN KUMAR
आदेश / O R D E R
PER SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER:
These appeals filed by the Revenue are directed against the orders of the ld. Commissioner of Income Tax (Appeals), Coimbatore granting the claim for deduction u/s.80IA of the Income Tax Act, 1961 (herein after referred to as ‘the Act’), before setting of earlier year’s notional losses.
Ld. Commissioner of Income Tax (Appeals) had taken a view that unabsorbed depreciation of years, prior to the initial year of preferring a claim under deduction u/s.80IA of the Act was not to be notionally carried forward and set off before granting such deduction.
The ld. Commissioner of Income Tax (Appeals) had followed the judgment of Hon’ble Jurisdictional High Court in the case of M/s. Sri Valayuthasamy Spinning Mills Ltd vs. ACIT 340 ITR 477. The contention of the Revenue before us is that the assessees had claimed deduction u/s 80IA(4) of the Act without setting off of the depreciation of the said units for the earlier years. As against this, claim of the assessees are that such depreciation loss was already adjusted and therefore, notional loss could not be brought forward and forcibly set off against the profits of the impugned assessment years.
We find that the issue raised in these appeals is squarely covered by ITA No.1980 & 1982/2016. :- 3 -: the judgment of the Jurisdictional High Court in the case of Velayudhaswamy Spinning Mills P. Ltd (supra). Once earlier losses had been set off against other income, there was no question of notional adjustment of such losses against the profits of a given year as per the above judgment, while working out deduction claimed u/s 80IA of the Act. Since the CIT(A) had followed the judgment of the Jurisdictional Madras High Court, we do not find any reason to interfere with the order of the CIT(A).
In the result, the appeals of the of the Revenue are 3. dismissed.
Order pronounced on Friday, the 30th day of September, 2016, at Chennai.