Income Tax Appellate Tribunal - Chennai
Chola Spinning Mills (P) Ltd., Erode vs Assessee on 2 May, 2013
IN THE INCOME TAX APPELLATE TRIBUNAL
' C ' BENCH : CHENNAI
[BEFORE SHRI. ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND
SHRI S.S. GODARA, JUDICIAL MEMBER]
I.T.A.No.211/Mds/2013
Assessment year : 2009-2010
M/s. Chola Spinning Mills (P) vs The Assistant Commissioner
Ltd, of Income Tax,
S.F. No.189/1, Circle I (1),
Komarapalayam Main Road, Salem.
Elanthakuttai Post,
Veppadai,
Pallipalayam 638 008.
[PAN AAACC 8484F ]
I.T.A.No.213/Mds/2013
Assessment year : 2009-2010
M/s. Rajaguru Spinning Mills The Assistant Commissioner of
(P) Ltd, vs Income Tax,
42, Bye Pass Road, Circle I (1),
Pallipalayam 638 006 Salem.
[PAN AAACR 9898Q]
(Appellant (Respondent)
Appellant by : Shri. S. Sridhar, Advocate
Respondent by : Shri. T.N. Betgeri, JCIT.
Date of Hearing : 02-05-2013
Date of Pronouncement : 07-05-2013
:- 2 -: I.T.A.No.211 & 213/Mds/2013
ORDER
PER S.S. GODARA, JUDICIAL MEMBER
ITA No.211/Mds/2013.
This assessee's appeal arises from the order of the Commissioner of Income Tax (Appeals) Salem dated 31-12-2012, passed in ITA No.264/2011-2012, for assessment year 2009-2010, in proceedings under section 143(3) of the Income Tax Act 1961 [in short the "Act"].
2. In the instant appeal, the only grievance of the assessee is that the Assessing Officer as well as the CIT(A) have wrongly held that for the purpose of computing deduction under sec 80IA of the Act, unabsorbed depreciation losses of the preceding assessment years of 33,94,786/- are to be set off against windmill's income in question.
3. In the course of hearing, the assessee reiterates the pleadings and also cites law case [2012] 340 ITR 477 (Mad) Velayudhawamy Spinning Mills P. Ltd Vs. ACIT and prays for acceptance of the appeal.
4. Per contra, the Revenue strongly supported the CIT(A) order under challenge.
:- 3 -: I.T.A.No.211 & 213/Mds/2013
5. Concise facts of the case are that the assessee is a 'company' generating electricity from wind mills. In September, 2003, it had commenced its business. In the impugned assessment year, it claimed deduction of 1,62,15,452/- under section 80IA(4)(iv)(a) of the 'Act' qua income from the windmills in question. In the assessment order dated 26.12.2011, the Assessing Officer held that unabsorbed depreciation losses pertaining to preceding assessment years are required to be set off against the income from the windmills while computing the quantum of deduction u/s 80IA of the Act. Accordingly, he reimputed the deduction of 1,28,20,666/- In appeal, the CIT (A) has upheld the Assessing officer findings while observing that the aforesaid case law (supra) is applicable only in case when the already adjusted losses are sought to be set off and not the instant case.
Therefore, the assessee is in appeal.
6. We have perused the case file as well as the case law cited hereinabove. As per assessee, it case is covered by abovestated case law; whereas, the Revenue strongly contests the submission. In our view, the argument the Revenue above said is liable to be rejected. In para 18 of the judgement, we find that the hon'ble High Court has categorically held that when the assessee exercises its option of :- 4 -: I.T.A.No.211 & 213/Mds/2013 claiming deduction under 80IA, then, only the losses of the years beginning from 'initial assessment year' are to be brought forward and no losses of earlier years which were already set off earlier assessment year are to be set off. Hence, we hold that the case also applies in the instant facts. In light thereof, by reiterating that we are dealing with a deduction provision which is liable to be liberally construed, we accept the contention of the assessee.
7. In the result, the appeal stands allowed.
ITA No.213/Mds/2013
8. This assessee's appeal arises from the order of the Commissioner of Income Tax (Appeals) Salem dated 31-12-2012, passed in ITA No.266/2011-2012, for assessment year 2009-2010, in proceedings under section 143(3) of the Income Tax Act 1961 [in short the "Act"].
9. Both parties are ad idem that though the assessee in the present case is different than in ITA No.211/Mds/2013 decided hereinabove above, however, since the issue raised is the same i.e. claim of deduction under sec 80IA vis-à-vis unabsorbed losses of earlier assessment years, it can be disposed by a common order.
:- 5 -: I.T.A.No.211 & 213/Mds/2013
10. We have considered the fair submission and perused case file. Keep in mind the fact that there is no distinguishable feature in the issue raised i.e setting off unabsorbed depreciation losses against the income of 'initial assessment year' for the purpose of deduction under section 80IA, we also allow the instant appeal in view of our findings herein above.
11. As a result, both appeals are allowed. A copy of this order be also placed in case file of ITA No.213/Mds/2013.
Order pronounced on Tuesday, the 7th of May, 2013, at Chennai.
Sd/- Sd/- (ABRAHAM P. GEORGE) (S.S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 7th May, 2013 K.V
Copy to: Appellant/Respondent/CIT(A)/CIT/DR