ACIT, COIMBATORE vs. K.RAJINIKANTH, COIMBATORE

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ITA 2495/CHNY/2014Status: DisposedITAT Chennai19 January 2015AY 2010-114 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the CIT(Appeals)'s order, stating that the binding decision of the Hon'ble Madras High Court was correctly followed. Therefore, there was no reason to interfere with the allowance of deduction under Section 80-IA.

What were the facts?

The assessee claimed deduction under Section 80-IA for income from windmills. The Assessing Officer disallowed it by considering prior year losses and depreciation as per Section 80-IA(5). The CIT(Appeals) allowed the deduction following a High Court decision.

What were the issues?

Whether prior year losses and depreciation should be considered for calculating deduction under Section 80-IA, and the applicability of Section 80-IA(5) in light of High Court and Supreme Court decisions.

Which sections of the Income-tax Act were involved?

Section 80-IA,Section 80-IA(5)

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, “ C” BENCH, CHENNAI

Before: SHRI B.R. BASKARAN & SHRI VIKAS AWASTHY

For Respondent: Shri M. Baskaran, CA
Hearing: 19.01.2015Pronounced: 19.01.2015

आदेश /O R D E R

PER B.R. BASKARAN, ACCOUNTANT MEMBER:

1.

The appeal filed by the Revenue is directed against the order dated 08.07.2014, passed by Ld. Commissioner of Income Tax (Appeals)-I, Coimbatore, relating to assessment year 2010-11.

The Revenue is aggrieved by the decision of ld. CIT(Appeals) in allowing deduction under Section 80-IA of Income-tax Act, 1961 (in short 'the Act') claimed by the assessee.

2.

The assessee had claimed deduction under Section 80-IA of the Act in respect of income generated from windmills. The Assessing Officer, by following the provisions of Section 80-IA(5) of the Act, took the view that the profits and gains of windmills business should be computed as if it were the only source of income of the assessee right from commencement of business.

Accordingly, the A.O. held that the business losses, depreciation and investment allowances of earlier years should be taken into account in determining the quantum of deduction admissible under Section 80-IA, even though there may have been set off against the profits of taxpayer from other sources. Though the assessee placed reliance on the decision of Hon'ble jurisdictional High Court in the case of Velayudhaswamy Spinning Mills (P) Ltd. v. ACIT (234 CTR 368) to content that restrictions placed under Section 80-IA(5) should be applicable after initial year of claiming of deduction, yet, the Assessing Officer did not accept the same on the reason that the Department has preferred SLP before the Hon'ble Supreme Court against the decision rendered by the Hon'ble Madras High Court. Accordingly, he disallowed the claim raised by the assessee under Section 80-IA(5) of the Act.

3.

In the appellate proceeding, the Ld. CIT(Appeals) allowed the claim of the assessee by following the decision of Hon'ble Madras High Court in the case of Velayudhaswamy Spinning Mills referred supra.

4.

Aggrieved, the Revenue has filed this appeal before us.

5.

We have heard the parties and perused the records. Since the Ld. CIT(Appeals) has followed the binding decision of Hon'ble Madras High Court in allowing the claim of deduction under Section 80-IA to the assessee, we do not find any reason to interfere with his order on this issue

6.

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

Order pronounced on the 19th day of January, 2015 at Chennai.

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