DCIT, TIRUPPUR vs. ROYAL CLASSIC MILLS PVT LTD., TIRUPPUR

PDF · subscribers
ITA 1896/CHNY/2016Status: DisposedITAT Chennai23 September 2016AY 2013-144 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that once earlier losses have been set off against other income, there is no question of notional adjustment of such losses against the profits of a given year when working out the deduction under Section 80IA. The CIT(A)'s order, following the jurisdictional High Court's judgment, was upheld.

What were the facts?

The Revenue appealed against the CIT(A)'s order allowing deduction under Section 80IA. The core issue was whether unabsorbed depreciation from earlier years, prior to claiming 80IA, should be set off before granting the deduction.

What were the issues?

Whether unabsorbed depreciation of earlier years needs to be notionally set off before allowing deduction under Section 80IA.

Which sections of the Income-tax Act were involved?

Section 80IA

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Income Tax Appellate Tribunal, ‘ B’ BENCH : CHENNAI

Before: SHRI ABRAHAM P. GEORGE & SHRI G. PAVAN KUMAR

For Respondent: Shri. N. Vijaykumar, C.A

Heard together (4 matters)

I.T.A. No. 1894/Mds/2016
I.T.A. No. 1895/Mds/2016
I.T.A. No. 1896/Mds/2016
I.T.A. No. 1897/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 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’).

Ld. Commissioner of Income Tax (Appeals) had taken a 2. view that unabsorbed depreciation of earlier 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 the judgment of the Jurisdictional High Court in the case of ITA Nos.1894 to 97/16 :- 4 -:

Velayudhaswamy Spinning Mills P. Ltd (supra). Once earlier losses had been set off against other income, there is 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 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 23rd day of September, 2016, at Chennai.

More judgments on Section 80IA

All 1,796 judgments and leading authorities on Section 80IA →

Recent GST High Court judgments

Search GST case law →