Principal Commissioner Of Income Tax Ino v. M/S.vetal Textiles And Electronics P. Ltd

IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated: 13.07.2016 C O R A M The Honourable Mr.Justice S.MANIKUMARandThe Honourable Mr.Justice D.KRISHNAKUMAR Principal Commissioner of Income Tax INo.63, Race Course Road,Coimbatore. ...Appellant Vs M/s.Vetal Textiles and Electronics P. Ltd., No.1, Industrial Estate Civil Aerodrome Post, Coimbatore 641 014 ... Respondent Prayer : Appeal filed against the order of the Income Tax Appellate Tribunal, Madras 'A' Bench, Chennai dated 09.12.2015in ITA No.1694/Mds/2015 (Assessment Year 2011-12)against theorder of the Commissioner of Income Tax(Appeals)-I, Coimbatoredated 7.5.2015 in Appeal No.29/14-15 for the Assessment Year2011-12 and against the order of the Assistant Commissioner of Income Tax, Company Circle-I(1), Coimbatore, dated 26.2.2014. For appellant : Mrs.R.Hemalatha Jr. 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 theIncome Tax Appellate Tribunal in ITA No.1694/Mds/2015, dated09.12.2015, by which, the Tribunal dismissed the appealpreferred by the revenue, against the order of the Commissionerof Income-Tax (Appeals) dated 07.05.2015 for the Assessment Year2011-12. 2. Revenue has come up with the above appeal, raising thefollowing substantial questions of law:- https://hcservices.ecourts.gov.in/hcservices/ law in holding that the assessee is entitled todeduction under section 80 IA of the Income TaxAct? 2. Whether under the facts and circumstancesof the case, the Income Tax Appellate Tribunalwas right in holding that unabsorbed depreciationof the earlier years before the first year orclaim, which was already been absorbed, shouldnot be notionally carried forward and taken intoconsideration for computation of deduction u/s.80IA of the Income Tax Act?” 3. As regards substantial questions of law, are concerned,it is the fair representation of the learned Senior StandingCounsel for Income Tax Department that this Court has beenconsistently following the decision in M/s.VelayudhaswamySpinning Mills (P) Ltd., v. Assistant Commissioner of Income-Taxreported in 340 ITR 477. She also submitted that challenge tothe same, is pending before the Hon'ble Apex Court in SLPNo.1136 of 2011. 4.Similar to the facts and circumstances of the case,while adverting to the substantial questions of law raised andafter considering the judgment of the Hon'ble Apex Court inLiberty India vs. CIT reported in (2009) 225 CTR (SC) 233 :(2009) 28 DTR (SC) 73 : (2009) 317 ITR 218 (SC) and the judgmentof the Rajasthan High Court in CIT vs. Mewar Oil & General MillsLtd. reported in (2004) 186 CTR (Raj) 141 : (2004) 271 ITR 311(Raj), a Hon'ble Division Bench of this Court in VelayudhaswamySpinning Mills Pvt. Ltd.,'s case (stated supra), held that oncethe losses and other deductions are set off against the incomeof the assessee in the previous year, it should not be re-openedagain, for the purpose of computation of current year income,under Section 80-I and 80-IA of the Act. 5. Velayudhaswamy Spinning Mills Pvt. Ltd.,'s case (statedsupra), has been followed in CIT v. R.Yuvaraj reported in [2015]57 TAXMANN.COM 252 (Madras), wherein, it is held that though itis contended that SLP filed against the above reported judgment,is pending on the file of the Hon'ble Supreme Court, the effectof the same, would not amount to reversal or erase the dictum. 6. Material on record discloses that while confirming theorder of the Commissioner of Income-Tax (Appeal), the Income-TaxAppellate Tribunal, at paragraph No.2 has held as follows:"6. We heard the ld. DR and also perusedthe material available on record. The CIT(A)allowed the claim of the assessee for deductionu/s 80IA by following the binding judgment of https://hcservices.ecourts.gov.in/hcservices/ 5. Velayudhaswamy Spinning Mills Pvt. Ltd.,'s case (statedsupra), has been followed in CIT v. R.Yuvaraj reported in [2015]57 TAXMANN.COM 252 (Madras), wherein, it is held that though itis contended that SLP filed against the above reported judgment,is pending on the file of the Hon'ble Supreme Court, the effectof the same, would not amount to reversal or erase the dictum. 6. Material on record discloses that while confirming theorder of the Commissioner of Income-Tax (Appeal), the Income-TaxAppellate Tribunal, at paragraph No.2 has held as follows:"6. We heard the ld. DR and also perusedthe material available on record. The CIT(A)allowed the claim of the assessee for deductionu/s 80IA by following the binding judgment of https://hcservices.ecourts.gov.in/hcservices/ the Madras High Court in Velayudhaswamy SpinningMills (P) Ltd. (supra). This Tribunal is of theconsidered opinion that mere pendency of SLPbefore the Apex Court cannot be a reason for notfollowing the judgment of the jurisdictionalHigh Court. In other words, the judgment of thejurisdictional High Court is binding on allauthorities in the States of Tamilnadu andPondicherry. The CIT(A) has rightly allowed theclaim of the assessee by following the judgmentof the Madras High Court in VelayudhaswamySpinning Mills P. Ltd. (supra). Therefore, thisTribunal do not find any infirmity in the orderof the CIT(A) and accordingly the same isconfirmed." 7. Going through the material on record, we are of the viewthat there are no valid grounds to reverse the abovesaid orders.Questions of law raised are answered against the revenue and infavour of the assessee and the instant appeal deserves to bedismissed. 8.In the result, the Tax Case Appeal is dismissed at thestage of admission itself. No costs. Sd/- Assistant Registrar(CS VI) //True Copy// To Sub Assistant Registrar 1.The Income Tax Appellate Tribunal, Madras A Bench, Chennai. Madras A Bench, Chennai. 2.The Commissioner of Income Tax (Appeals)-I, Coimbatore. Coimbatore. 3.The Assistant Commissioner of Income Tax, Company Circle -I(1), Coimbatore. Company Circle -I(1), Coimbatore. mp[co]srg 23/07/2016