Principal Commissioner Of v. M/S. Sri Ranganathar Valves

IN THE HIGH COURT OF JUDICATURE AT MADRAS

Dated: 29.08.2016 C O R A M The Honourable MR. Justice S.MANIKUMAR and The Honourable MR. Justice D.KRISHNAKUMAR Tax Case Appeal No.590 of 2016 Principal Commissioner of Income Tax 1 No.63, Race Course Road, Coimbatore.

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Appellant/Appellant Vs M/s.Sri Ranganathar Valves Pvt. Ltd., 12/45, Thadagam Road, Edayarpalayam Post, Coimbatore - 641 025.

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Respondent/Respondent Prayer : Appeal filed against the order of the Income Tax Appellate Tribunal, 'B' Bench, Chennai dated 13.01.2016 in ITA No.1734/Mds/2015 against the order of the Commissioner of Income tax (Appeals)-I, Coimbatore dated 29.05.2014 and made in PA No/GIR No/TAN AAL CS 5492 C and against the order of the deputy Commissioner of Income Tax, corporate Circle 2, Coimbatore, dated 15.12.2014 and made in PAN AALCS 5492 C. For appellant : Mr.T.R.Senthil Kumar Sr. Standing Counsel for Income Tax.

J U D G M E N T

(Judgment of the Court was made by S.Manikumar,J) Challenge in this Tax Appeal, is to an order passed by the Income Tax Appellate Tribunal in ITA No.1734/Mds/2015, dated 13.01.2016, by which, the Tribunal dismissed the appeal preferred by the Revenue, against the order of the Commissioner of Income-Tax (Appeals)-I, Coimbatore, dated 29.05.2014 for the Assessment Year 2012-13.

2. Revenue has come up with the instant Tax Case Appeal, raising the following substantial questions of law:-

"1. Whether on the facts and circumstances of the case, the Appellate Tribunal was right in law in holding that the assessee is entitled to deduction under section 80 IA of the Income Tax Act?

2. Whether under the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in holding that unabsorbed depreciation of the earlier years before the first year or claim, which has already been absorbed, should not be notionally carried forward and taken into consideration for computation of deduction u/s.80 IA of the Income Tax Act?"

3. As regards substantial questions of law raised, it is the fair representation of the learned Senior Standing Counsel for Income Tax Department that this Court has been consistently following the decision in M/s.Velayudhaswamy Spinning Mills (P) Ltd., v. Assistant Commissioner of Income-Tax reported in 340 ITR 477. He also submitted that challenge to the same, is pending before the Hon'ble Apex Court in SLP No.1136 of 2011. 4.

Similar to the facts and circumstances of the case, while adverting to the substantial questions of law raised and after considering the judgment of the Hon'ble Apex Court in Liberty India vs. CIT reported in (2009) 225 CTR (SC) 233 : (2009) 28 DTR (SC) 73 : (2009) 317 ITR 218 (SC) and the judgment of the Rajasthan High Court in CIT vs. Mewar Oil & General Mills Ltd. reported in (2004) 186 CTR (Raj) 141 : (2004) 271 ITR 311 (Raj), a Hon'ble Division Bench of this Court in Velayudhaswamy Spinning Mills Pvt. Ltd.'s case (stated supra), held that once the losses and other deductions are set off against the income of the assessee in the previous year, it should not be re-opened again, for the purpose of computation of current year income, under Sections 80-I and 80-IA of the Act.

5. Velayudhaswamy Spinning Mills Pvt. Ltd.'s case (stated supra), has been followed in CIT v. R.Yuvaraj reported in [2015] 57 TAXMANN.COM 252 (Madras), wherein, it has been held that though it was contended that SLP filed against the above reported judgment, is pending on the file of the Hon'ble Supreme Court, the effect of the same, would not amount to reversal or erase the dictum.

6. Material on record discloses that while confirming the order of the Commissioner of Income-Tax (Appeals), the Income Tax Appellate Tribunal, at paragraph No.6 has held as follows:

"........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 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). "

7. Going through the material on record, we are of the view that there are no valid grounds to reverse the aforesaid order. Questions of law raised are answered against the Revenue and in favour of the assessee and the instant appeal deserves to be dismissed.

8. In the result, the Tax Case Appeal is dismissed at the stage of admission itself. No costs.

Sd/- Assistant Registrar(CS II) //True Copy// Sub Assistant Registrar rk To 1.

The Assistant Registrar Income Tax Appellate Tribunal Madras 'B'Bench, III Floor, Rajaji Bhavan, Besant Nagar, Chennai 600 090.

2.

The Commissioner of Income Tax (Appeals) I Coimbatore.

3.

The Deputy Commissioner of Income Tax, Corporate Circle 2, Coimbatore.

4.

The Deputy Commissioner of Income Tax, Corporate Circle 2, Coimbatore.

1 cc to M/s.T.R.Senthilkumar, Advocate, sr.48959 Tax Case Appeal No.590 of 2016 ug co kra 17.10.2016