Tca/194/2011 Of Commissioner Of Income Tax-I v. M/S Ambica Agarbathies And

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 28.11.2018 CORAM : THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAMandTHE HONOURABLE MR.JUSTICE N.SATHISH KUMAR Tax Case Appeal Nos.194 to 199 of 2011The Commissioner of Income Tax-I,Chennai. ...Appellant in all the appeals -vs- M/s.Ambica Agarbathies AndAroma Industries LimitedAmbica Empire-Best Western No.57,100 Ft. Road, Vadapalani,Chennai. ...Respondent in all the appeals Common Prayer: Tax Case Appeals filed under Section 260A ofthe Income Tax Act, 1961 (for brevity 'the Act') against theorder of the Income Tax Appellate Tribunal Chennai 'C' Bench,dated 23.07.2010 in ITA Nos.314 to 319/Mds/2010, for theAssessment years 2000-01 to 2005-06 respectively. TCA 194 TO 198/2011: Appeal filed against the order of theCommissiner of Income Tax (A) III ,Chennai in ITA Nos.302/08-09,ITA No.212/07-08 and 301,303 and 304/08-09 IA-III dated17.12.2009 in PAN No.AAACA 7483L against the order of the DeputyCommissioner of Income Tax Company Circle (1), Chennai in PA GIRNo. AAACA74831/AX2-041 for the Assessment Year 2004-2005, 2003-2004, 2002-2003 dated 28.11.2008 against the Assessment ordersin PA GIR No.AAACA7483L/AX2-041 for the year 2001-02 against theAssessment orders dated 26.10.2007 in PA/GIR NoAAACA7483L/AX2.041 the file of Assistant Commissioner of Income TaxCompany Circle (1) Chennai. TCA.199/11: Appeal filed against the order of theCommissioner of Income Tax Appeals III, 121, Mahatma GandhiRoad, Chennai - 600 034, in ITA Nos.591/07-08/AIII dated17.12.2009 in PAN/AAA CA7483L against the Assessment order dated https://hcservices.ecourts.gov.in/hcservices/ 26.12.2007 in PA (GIR No.AAACA7483L/AX2-041 for the AssessmentYear 2005-2006 on the file of Assistant Commissioner of IncomeTax Company Circle 1(1) Chennai. For Respondent :Mr.R.Sivaraman JUDGMENT These Tax Case Appeals filed under Section 260A of theIncome Tax Act, 1961 against the order of the Income TaxAppellate Tribunal Chennai 'C' Bench, dated 23.07.2010 in ITANos.314 to 319/Mds/2010, for the Assessment years 2000-01 to2005-06 respectively. 2.Heard Mrs.R.Hemalatha, learned Senior Standing Counsel forthe appellants and Mr.R.Saravanan, learned Counsel for therespondent. 3.The Appeal Nos.194 to 198 of 2011 have been admitted on03.08.2011, on the following Substantial Questions of Law: "(i)Whether on the facts and in thecircumstances of the case, the Income TaxAppellate Tribunal was right in holding thatthe initial assessment year referred to inSection 80IA (5) would mean only the first yearof the claim of deduction under Section 80IA bythe assessee and not the commencement ofoperation of the eligible undertaking? (ii)Whether on the facts and in thecircumstances of the case, the Income TaxTribunal was right in holding that theunabsorbed depreciation and carried forwardlosses of the earlier years which had alreadybeen set off against the other income, couldnot be notionally carried forward and takeninto consideration for the purpose ofcomputation of deduction under Section 80IA,inspite of the clear provisions of Section 80IAstipulating that the said undertaking should beconsidered as only the source of income of the assessee for the purpose of determining theeligible profits?” 4. The Appeal No.199 of 2011 has been admitted on03.08.2011, on the following Substantial Question of Law:“Whether on the facts and in thecircumstances of the case, the Income TaxAppellate Tribunal was right in holding thatthe business losses of a unit which was noteligible for deduction under Section 10A of theAct could not be set off against the profits ofthe undertaking eligible for deduction underSection 10A for the purposes of determining theallowable deduction under Section 10A of theAct?” assessee for the purpose of determining theeligible profits?” 4. The Appeal No.199 of 2011 has been admitted on03.08.2011, on the following Substantial Question of Law:“Whether on the facts and in thecircumstances of the case, the Income TaxAppellate Tribunal was right in holding thatthe business losses of a unit which was noteligible for deduction under Section 10A of theAct could not be set off against the profits ofthe undertaking eligible for deduction underSection 10A for the purposes of determining theallowable deduction under Section 10A of theAct?” 5.We have perused the order of Assessment as well as theOrder passed by the Commissioner of Income Tax and we find thatthe tax effect in this appeal is lesser than the threshold limitmentioned in Circular No.3 of 2018, dated 11.07.2018, issued bythe Central Board of Direct Taxes, which fixes the monetarylimit as Rs.50,00,000/- for the Department to pursue the matter.Furthermore, the Revenue has not been able to point out anydistinguishing features, by which the Circular No.3 of 2018,dated 11.07.2018, cannot be applied. 6.Thus, for the above reasons, the Revenue cannot pursuethis Appeal in view of the low tax effect. Hence, the Appeal isdismissed and the Substantial Questions of Law, framed forconsideration, are left open. No costs. The Revenue is atliberty to seek for restoration of appeal, if at a later pointof time, it is found that the tax effect is above the thresholdlimit. mrm Sd/- Assistant Registrar To 1.The Income Tax Appellate Tribunal, Chennai 'C' Bench. Chennai 'C' Bench. 2.The Commissioner of Income Tax Appeals III, 121, Mahatma Gandhi Road, Chennai - 34. 121, Mahatma Gandhi Road, Chennai - 34. https://hcservices.ecourts.gov.in/hcservices/ 3.The Assistant Commissioner of Income Tax, Company Circle 1(1), Chennai. Company Circle 1(1), Chennai. 4.The Deputy Commissioner of Income Tax, Company Circle 1 (1), Chennai. Company Circle 1 (1), Chennai. 5.The Assistant Registrar, Income Tax Appellate Tribunal, III floor, Rajaji Bhavan, Besant Nagar, Chennai - 90. +6cc to Mr.T.Ravi Kumar, Advocate, SR.No.81287+1cc to Mr.P.SivaRaman, Advocate, SR.No.81551 T.C.A.Nos.194 to 199 of 2011ks(CO)kak(28/01/2019)