ACIT, CHENNAI vs. GRT JEWELLERS (INDIA) PVT. LTD., CHENNAI

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ITA 836/CHNY/2016Status: DisposedITAT Chennai10 June 2016AY 2007-084 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 a Special Leave Petition before the Apex Court does not justify deviating from a binding High Court judgment. Therefore, the CIT(A)'s order allowing the deduction was upheld.

What were the facts?

The assessee claimed deduction under Section 80-IA for windmills. The Assessing Officer disallowed this deduction by setting off unabsorbed depreciation of earlier years before calculating the eligible profit. The CIT(A) allowed the assessee's claim following a High Court judgment.

What were the issues?

Whether unabsorbed depreciation of earlier years should be set off before calculating the profit eligible for deduction under Section 80-IA. Whether a pending SLP before the Apex Court overrides a binding High Court judgment.

Which sections of the Income-tax Act were involved?

Section 80-IA,Section 143(3),Section 147,Section 148

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI

Before: SHRI CHANDRA POOJARI & SHRI G. PAVAN KUMAR

For Respondent: Shri. S. Sridhar, Advocate

आदेश / O R D E R PER G. PAVAN KUMAR, JUDICIAL MEMBER:-

1.

These appeals filed by the Revenue are directed against different orders of Commissioner of Income-tax (Appeals)-19, Chennai for the above assessment years passed u/s.143(3) r.w.s. 147 and u/sec. 143(3) of the Income Tax Act, 1961 (herein after referred to as ‘the Act’). Since the issue in these appeals is common in nature, hence these appeals are combined, heard together, and disposed of by a common order for the sake of convenience. We consider the facts as narrated in of assessment year 2007-08 for adjudication.

The only issue arises for consideration is with regard to 2. deduction claimed by the assessee under Section 80-IA of the Income Tax Act, 1961 (in short ‘’the Act’’) in respect of windmills..

The brief facts of the case are that the assessee company 3. filed return of income for the assessment year 2007-08 on 13.10.2007 disclosing Total income of �3,25,46,675/- and assessment was completed u/sec.143(3) dated 31.12.2009. Subsequently, the ld. Assessing Officer has reason to believe that income has escaped assessment as assessee has claimed deduction u/s.80IA of the Act before set off of unabsorbed depreciation of earlier years and notice u/s.148 of the Act was issued and re-assessment u/sec. 143(3) to 838/Mds/2016. :- 3 -: r.w.s.147 was completed on 26.06.2014 disallowing deduction of �30,04,496/- under section 80IA of the Act by notionally bringing in and setting off the brought forward unabsorbed depreciation loss for determining the profits qualifying for deduction u/s.80IA from the initial assessment year being the year relevant to the financial year in which operations relating to the windmill infrastructure commenced.

Aggrieved, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals)..

On appeal, the Commissioner of Income Tax (Appeals) 4. observed that the issue is covered by the jurisdictional High Court order in the case of CIT vs. Velayuthasamy Spinning Mills 231 CTR 368 and allowed the claim of the assessee. Against Commissioner of Income Tax (Appeals) order, the Revenue assailed an appeal before Tribunal.

We heard the rival submissions and perused the material on 5. record. The only contention of the Department before the Tribunal that the Revenue has not accepted the judgment of Madras High Court and an appeal has already been filed along with Special Leave Petition and the same is pending before the Apex Court. This Tribunal is of the considered opinion that mere pendency of Special Leave Petition before the Apex Court cannot be a reason to take a different view.

The judgment of Madras High Court is binding on all the authorities in to 838/Mds/2016. :- 4 -: 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 binding judgment of Madras High Court in Velayudhaswamy Spinning Mills (P) Ltd (supra).

Therefore, this Tribunal do not find any infirmity in the order of the Commissioner of Income Tax (Appeals). The appeal of the Revenue is dismissed.

6.

Consequently, the appeals of the Revenue in 838/Mds/2016 for assessment years 2011-2012 & 2012-13 are dismissed.

7.

In the result, the appeals of the Department in ITA Nos.

836, 837 & 838/Mds/2016 are dismissed.

Order pronounced on Friday, the 10th day of June, 2016, at Chennai.

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