Commissioner Of Income Taxno v. M/S.sri Vignesh Yarns Pvt.ltd

IN THE HIGH COURT OF JUDICATURE AT MADRAS CORAM THE HONOURABLE MR.JUSTICE V.RAMASUBRAMANIAN ANDTHE HONOURABLE MR.JUSTICE T.MATHIVANAN Tax Case (Appeal) No.695 of 2015andM.P.No.1 of 2015 Commissioner of Income TaxNo.63, Race Course RoadCoimbatore. ...Appellant -vs- M/s.Sri Vignesh Yarns Pvt.Ltd.,88, F-17-C, Kamaraj RoadTirupur 641 604....Respondent Tax Case Appeal filed under Section 260A of the Income TaxAct, 1961 against the order passed by the Income Tax AppellateTribunal, Madras 'B' Bench, Chennai dated 04.02.2015 passed in ITANo.1218/Mds/2014, against the order passed by the Commissioner ofIncome Tax (Appeals) II, Coimbatore, dated 24.12.2013 made in ITAppeal No.82/12-13, against the order passed by the DeputyCommissioner of Income Tax, Company Circle, Tirupur, dated 30.11.2012for the Assessment year 2010-2011. For Appellant: Mr.T.R.Senthil KumarStanding Counsel for Income TaxDepartment JUDGMENT (The Judgment of the Court was delivered by V.RAMASUBRAMANIAN, J.)This appeal is by the Revenue, raising the followingsubstantial questions of law: "1. Whether under the facts and circumstances ofthe case, the Hon'ble Income Tax Appellate Tribunal rightin law in holding that assessee is entitled to deduction https://hcservices.ecourts.gov.in/hcservices/ underSection80IAwithoutsettingoffthelosses/unabsorbed depreciation pertaining to the windmill,which were set off in the earlier year against otherbusiness income of the assessee, following the decision ofthe Jurisdiction High Court in the case ofM/s.Velayudhasamy Spinning Mills (340 ITR 477) when thesame is pending appeal before the Hon'ble Supreme Court inSLP Civil 1136/11? 2. Whether under the facts and circumstances of thecase, the Income Tax Appellate Tribunal was correct inholding that the initial assessment year in Section 80IA(5)would only mean the year of claim of deduction underSection 80IA and not the year of commencement of eligiblebusiness? 3. Whether on the facts and in the circumstances ofthe case, the Tribunal was right in holding that theassessee has the option to choose the first/initialassessment year of claim for deduction under Section 80IA?" 2. Heard Mr.T.R.Senthil Kumar, learned Standing Counsel forthe Department. 3. Following the decision of the Supreme Court in LibertyIndia vs. CIT [2009] 317 ITR 218 and the decision in CIT vs Mewar Oiland General Mills Limited [2004] 271 ITR 311, a Bench of this Courthas already held in Velayudhasamy Spinning Mills P.Ltd. vs AssistantCommisisoner of Income Tax [2012] 340 ITR 477 (Mad) that once thelosses and other deductions have been set off against the income ofthe previous year, it should not be re-opened again for the purposeof computation of current year income under Section 80I or 80IA ofthe Act. Though the decision of this Court in Velayudhasamy SpinningMills has been taken by the Revenue to the Supreme Court and theSupreme Court has issued notice in the Special Leave Petition, wefollowed the decision in Velayudhasamy Spinning Mills in CIT vs.R.Yuvaraj reported in [2015] 57 Taxmann.Com 252 (Madras). The effectof the Supreme Court ordering notice in the Special Leave Petitiondoes not tantamount the wiping out the law laid down by this Court,which merely followed the earlier decision of the Supreme Court inLiberty India. Therefore, the questions of law raised are answeredagainst the Revenue and in favour of the assessee. 4. In the result, this Tax Case Appeal is dismissed. Nocosts. Consequently, the connected miscellaneous petition is closed. Sd/-Assistant Registrar(CO)//True Copy//Sub Assistant Registrarvj2To1. The Deputy Commissioner of Income Tax, Company Circle, Tiruppur.2. The Commissioner of Income Tax (Appeals-II) Coimbatore.3. The Income Tax Appellate Tribunal, Chennai Bench 'B'.Tax Case (Appeal) No.695 of 2015GP (CO)PSI (30.09.2015)