ITO, TIRUPPUR vs. GANGAI GARMENTS, TIRUPPUR

Both the appeals filed by the Revenue in respect of two different assessees are directed against the respective orders of the Commissioners of Income Tax (Appeals) - I & 3, Coimbatore, dated 29.05.2015 and pertain to assessment year 2012-13. Since common issue arises for consideration in both the appeals, we heard the appeals together and disposing of the same by this common order.

We heard Shri Sh. P. Radhakrishnan, the Ld. Departmental Representative and the Ld.counsel and Ld. representative for both the assessees. The only issue arises for consideration is with regard to deduction claimed by the assessees under Section 80-IA of the Income-tax Act, 1961 (in short 'the Act') in respect of windmills. The Assessing Officer rejected the claim of the assessees on the ground that the Department has filed a Special Leave Petition against the judgment of Madras High Court in Velayudhaswamy Spinning Mills (P) Ltd. v. ACIT (231 CTR 368).

Now the only contention of the Department before this Tribunal is 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 the State of Tamil Nadu and Union Territory of Pondicherry. Therefore, the CIT(Appeals) has rightly allowed the claim of the assessees 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 CIT(Appeals).