ACIT, CHENNAI vs. GRT HOTELS & RESORTS PVT LTD., CHENNAI

This appeal of the Revenue is directed against the order of the Commissioner of Income Tax (Appeals) – 19, Chennai, dated 27.07.2015 and pertains to assessment year 2010-11.

Sh. A.B. Koli, the Ld. Departmental Representative, submitted that the only issue arises for consideration is with regard to deduction claimed by the assessee under Section 80-IA of the Income-tax Act, 1961 (in short 'the Act'). The CIT(Appeals), by placing reliance on the judgment of Madras High Court in Velayudhaswamy Spinning Mills (P) Ltd. v. ACIT (231 CTR 368) found that the assessee is eligible for deduction under Section 80-IA of the Act. According to the Ld. D.R., the Revenue has already filed an appeal before Apex Court against the judgment of Madras High Court in Velayudhaswamy Spinning Mills (P) Ltd. (supra). Since the appeal is pending before the Apex Court, to keep the matter alive the Revenue has filed appeal before this Tribunal.

On the contrary, Shri M.P. Senthil Kumar, the Ld.counsel for the assessee, submitted that the CIT(Appeals) by placing reliance on the judgment of Madras High Court in Velayudhaswamy Spinning Mills (P) Ltd. (supra), allowed the claim of the assessee under Section 80-IA of the Act. According to the Ld. counsel, the judgment of Madras High Court is binding on all the authorities in the State of Tamil Nadu and Puducherry, therefore, the Revenue cannot take a different view.

We have considered the rival submissions on either side and perused the relevant material available on record. Admittedly, the CIT(Appeals) allowed the claim of the assessee under Section 80- IA of the Act by following the judgment of Madras High Court in Velayudhaswamy Spinning Mills (P) Ltd. (supra). The only objection of the Revenue is that an appeal is pending before Apex Court against the judgment of Madras High Court in Velayudhaswamy Spinning Mills (P) Ltd. (supra). This Tribunal is of the considered opinion that a mere pendency of an appeal before Apex Court against the judgment of Madras High Court cannot be a reason to take a different view. This Tribunal is of the considered opinion that the judgment of Madras High Court is binding on all the authorities in the State of Tamil Nadu and Puducherry. Therefore, the CIT(Appeals) has rightly followed the judgment of Madras High Court in Velayudhaswamy Spinning Mills (P) Ltd. (supra). This Tribunal do not find any reason to interfere with the order of the lower authority. Accordingly, the order of the CIT(Appeals) is confirmed.

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